Key takeaways from Chapter 3 “Evolution of Money” from the book “The Bullish Case for #Bitcoin”

Modern monetary economics is obsessed with the medium-of-exchange role of money. But there’s more to it than that! States have monopolized the issuance of money and undermined its use as a store of value.

Money evolves in stages: collectible, store of value, medium of exchange, and unit of account. The store-of-value role precedes the medium-of-exchange role in the evolution of money. The purchasing power of a store of value will plateau when it is widely held. #Bitcoin

In America, the dollar serves the three functions of money: medium of exchange, unit of measure, and (somewhat) store of value. In Argentina, the peso is used as a medium of exchange but not as a store of value. People exchange pesos for dollars to save value. Prices in Argentina are often remembered in dollars due to the peso’s volatility.

#Bitcoin is transitioning from a collectible to a store of value. It will likely be several years before it becomes a true medium of exchange. The path to Bitcoin becoming a medium of exchange is uncertain and risky. The same transition took centuries for gold.

In conclusion, money is more than just a medium of exchange. It evolves in stages and serves multiple functions in modern economics. Thanks for reading!