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Bitcoin and Cryptocurrencies

The basic theory is that a currency has 3 functions: store of value, medium of exchange, medium of account. It’s interesting to look at parts of the world with a weak currency which end up with a two-tier system: the local currency for everyday transactions (medium of exchange) but keep their money in USD (or sometimes gold, or stocks, or farmland – any safe store of value).

The goldbug argument is that gold is a better store of value than the dollar (no-one prints gold) and so in the long run will come to dominate.

Photo Credit: HollandFintech.com

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