Is Bitcoin Money? (And What that Means)

21 Pages Posted: 15 Jun 2019 Last revised: 14 Oct 2019

See all articles by Peter K. Hazlett

Peter K. Hazlett

George Mason University, 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). AIER Sound Money Project Working Paper No. 2019-13, Available at SSRN: https://ssrn.com/abstract=3387886 or http://dx.doi.org/10.2139/ssrn.3387886

Peter Hazlett

George Mason University, 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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