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Understanding Bitcoin Benefits

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Now that you understand how Bitcoin can have value — and clearly it does right now, as millions of people are willing to pay for it — let’s take a look at some of the benefits of Bitcoin, characteristics that set it apart as a form of money.

First, consider the roles that money plays:

 Money can act as a medium of exchange. That is, you can use it to buy things. Bitcoin currently doesn’t do well on this account, because it’s not widely accepted, transactions are generally slow and expensive, and most people are still buying and accumulating Bitcoin for speculative purposes, to see if the value will go up.

 Money can also be a measure of value or a unit of account. We use it to assign a value to things, from sugar to motor cars. Bitcoin also doesn’t do well in this area at the moment because its price is so volatile.

 Money can also act as a store of value, a way to take value you have saved and store it away safely. You should be able to buy Bitcoin and let it store your wealth for you, then retrieve it when you need it. Bitcoin has actually done very well in this way over the long term. Certainly, there are short-term fluctuations, but over the long term, due to significant appreciation in value, it’s acted very well as a store of value.

Here then, are various characteristics and benefits that set Bitcoin apart.

Bitcoin For Dummies

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