Table 1.

Desired currency features and bitcoin

FeaturesDescription
AcceptabilityA bitcoin does not carry any inherent value and is also not guaranteed/issued by any legal jurisdiction, hence there is no legal tendering
Storability and durabilityDepending upon acceptability, bitcoin may work as a measure and store of value. However, both features of acceptability – inherent value and legal tendering – are missing. Bitcoin is durable – preserved in computer disks at a very low cost, given the multiple uses of computers, for a longer duration without perishing
DivisibilityBitcoin is divisible to a minimal value. There are 1,000,000 bits in one bitcoin (bitcoin.org)
StabilityStability comes through the quantity. More than the required currency in circulation creates inflation and vice versa. The quantity of bitcoins is fixed by design; hence, the danger of deflation is more than inflation
TransferabilityBitcoins can be transferred very easily to any geographical location through online computer networks. It cannot work at places, which are not connected with online networks. It does not exist physically
FlexibilityThe quantity of bitcoins is fixed at 21 million by design. At this point, we can say it is less flexible than fiat money
SecurityBitcoins do not exist physically, hence are protected from theft. However, network security and hacking threats are present
Source: Author’s own

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