What Is Money? From Commodities to Virtual Currencies/Bitcoin
12 Pages Posted: 19 Mar 2014
Date Written: March 14, 2014
Some forms of money have been used since 2,200 BC. What constitutes money evolved from commodities with intrinsic value, such as gold, to commodity- backed paper money. In the United States, this was replaced by “fiat” money issued by the Federal government that is “legal tender” for all debts public and private. Eventually, payments evolved to credit cards, debit cards, and various forms of electronic payments. Virtual currencies, such as Bitcoin, are the latest innovation. They act like money but have no intrinsic value and are not legal tender. This article examines the pros and cons of Bitcoins.
Keywords: Money, currency, virtual currency, cryptocurrency, Bitcoin
JEL Classification: E42
Suggested Citation: Suggested Citation