Bitcoin as Money: Functions, Properties, and Supply

Bitcoin is digital money that lives on a public network instead of inside a bank database. It is not printed by any government. New bitcoin are created according to rules that are public and predictable. The three classic functions applied to Bitcoin: Store of value means people can hold Bitcoin over many years, hoping it will protect or grow purchasing power over time. Medium of exchange means people can use Bitcoin to pay for goods and services, especially online and in places that support it. Unit of account means prices can be measured in Bitcoin, but most of the world still uses dollars or other national currencies as the main unit. Today, Bitcoin is used most strongly as a store of value and sometimes as a medium of exchange. Its role as a unit of account is still limited. Properties applied to Bitcoin: Scarcity (only 21 million, hard to change), Divisibility (1 bitcoin = 100,000,000 satoshis), Portability (send across the world via internet), Durability (does not wear out, but you must protect your keys), Fungibility (one bitcoin equals another), Acceptability (some accept it, some do not), and Verifiability (public rules anyone can check).