Published on August 14th, 2015 | by bitcoin0
Bitcoin muddles definition of money
The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value.
Say that our person knows about n different products, numbered from 1 to n. Our person can trade in these products.
The proportional roundtrip trade losses prtl for product x, when traded for product y, are: prtl(x,i,j) = (x – tr(tr(x,i,j),j,i)) / x.
You can verify that what we conventionally consider to be currencies have indeed very low proportional roundtrip losses, especially when traded against another currency.
According to the metrics established by the definition proposal in this article, bitcoin is unambiguously a currency.