Is Bitcoin Money? (And What that Means)

19 Pages Posted: 15 Jun 2019

See all articles by Peter K. Hazlett

Peter K. Hazlett

George Mason University, College of Humanities and Social Sciences, Department of Economics, Students

William J. Luther

Florida Atlantic University; American Institute for Economic Research

Date Written: May 24, 2019

Abstract

In a recent article, Yermack (2015) argues that bitcoin is not money because it functions poorly as a medium of exchange, unit of account, and store of value. We offer a more conventional view. We maintain that the standard approach classifies an item as money if and only if it functions as a commonly-accepted medium of exchange. Then, we show that the demand for bitcoin is comparable to the demand for many government-issued monies. Finally, we argue that bitcoin is money — though perhaps only over a relatively small domain at present.

Keywords: Bitcoin, Medium of Exchange, Money, Store of Value, Unit of Account

JEL Classification: E40, E41, E42

Suggested Citation

Hazlett, Peter and Luther, William J., Is Bitcoin Money? (And What that Means) (May 24, 2019). Available at SSRN: https://ssrn.com/abstract=3387886 or http://dx.doi.org/10.2139/ssrn.3387886

Peter Hazlett

George Mason University, College of Humanities and Social Sciences, Department of Economics, Students ( email )

Fairfax, VA
United States

William J. Luther (Contact Author)

Florida Atlantic University ( email )

777 Glades Road
Boca Raton, FL 33431
United States

HOME PAGE: http://www.wluther.com

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

HOME PAGE: http://www.aier.org/staff/william-j-luther

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