What is money?
Money is a standard unit of measurement and common denomination for trade. Being able to quote prices in money allows us to compare the values of different items, which promotes efficient accounting systems and economic prosperity.
Money functions as:
- A medium of exchange
- A unit of account
- A store of value
A medium of exchange is a tool that allows goods and services to be purchased without having to rely on coincidence. For one thing, it’s much easier when everyone accepts the same currency! This makes money an incredibly useful invention because not only can you trade your own products or labor for other things easily, but since everything has its price in terms of money this also opens up opportunities for people who are willing to work hard enough get what they need from others whose needs cannot be fulfilled by their own abilities alone. However there still have been problems with using just any kind of object as a meansof payment like how some “currencies” were made out if cowry shells (which weren’t actually used anymore) which was why we’ve come up with coins
A unit of account is a standard monetary measure that acts as the basis for measuring and recording commercial transactions. Without this, there would be no way to record or document important financial exchanges because it sets standards for what items have relative value.
To be a store of value, money must reliably save and retrieve. It should also remain stable in time to make it predictably useable as a medium of exchange when you get hold of it. Additionally, the value needs to stay consistent over time for transferrable purchasing power from present till future. On contrary some believe inflation (reducing its worth) may affect functioning ability as storage place and worsen conditions with standard payment system too..
Why Bitcoin fails.
Bitcoin is not a medium of exchange.
For a bitcoin transaction to be validated, it can take up to 10 minutes. This is because the network needs time for consensus and verification of certain blocks. However, this isn’t ideal if we want people using cryptocurrency as an actual payment method – there’s no way that customers would appreciate having their Starbucks taking longer just so they could pay with crypto! In order for cryptocurrencies like Bitcoin to survive in the long run, they need security but also speed since many are already being seen as valid forms of exchange regardless of price fluctuations.
Bitcoin is not a unit of account.
The prices of good and services are set in direct relation to the income that regular people receive. The cost of goods and serves can be deemed expensive or affordable relative to one’s income. The average price of an Aston Martin is $200,000 – which is approximately four (4) times the median salary in the United States. The value of the dollar that people would use to buy that Aston Martin stays consistent. In order for a currency to function, its price must be relatively stable.
Bitcoin is not a store of value.
For people to regularly buy goods with a price denominated in bitcoin, they must have an income that is fixed in the currency. This means if their employers are paying them salaries or wages set at one of these prices, then those employers will also need costs and overheads that can be paid for using this same method. However as we’ve already seen it’s difficult to maintain such high levels of scalability because all transactions would require tremendous amounts of computing power making each transaction incredibly slow and expensive relative to traditional fiat currency.
Indeed, Bitcoin is in the throes of a scalability death spiral.
A former professional rugby player, Adam S. Tracy brings over twenty years’ experience as an attorney, consultant and dealmaker with a particular focus on cryptocurrency, digital products, payments and immersive corporate structures. As an accomplished executive and advisor to high risk merchants and stakeholders, Adam has proven himself as a results oriented, decisive leader with proven success advising early market entrants, technology adapters, as well as established participants across a wide range of verticals. Adam Tracy’s attack-first personality allows him to excel in dynamic, demanding environments including complex corporate negotiations, distressed environments and regulatory investigations.
In addition, Adam S. Tracy also has a successful track record co-founding high risk industry ventures, building & leading cross-functional teams, and spearheading diverse corporate transactions. A serial entrepreneur, Adam has successfully started and created exits across a wide swath of markets, including various mobile SaaS ventures, nutraceuticals, peer-to-peer payment systems, and several telemarketing-based ventures. Moreover, as a recognized expert in the payments field, Adam Tracy has been a blockchain and digital currency evangelist and influencer since the early days of Bitcoin.
Utilizing his proprietary “Pre-Event Driven™” strategy for decision making, Adam S. Tracy further leverages his over twenty years’ experience to create cost-effective, value-add solutions for each client. A data-driven acolyte, Adam continually refines his strategies based on field studies and data collection. Moreover, Adam Tracy further augments his range of solutions by actively networking with regulators, liquidity providers, legal and compliance experts, deal-flow brokers, investors and management of leading high risk industry ventures.
Adam S. Tracy earned his Bachelor of Science in Computer Applications and Bachelor of Science in Finance from the University of Notre Dame. He subsequently earned his Masters in Business Administration from the DePaul Kellstadt Graduate School of Business, while concurrently earning his Juris Doctorate from the DePaul College of Law. Adam lives outside Chicago with his with his wife, son, four dogs, and two cats.
On the Web: https://www.adamtracy.io
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