Cryptocurrency is awesome but NOT really CURRENCY... yet

Many refer to Steem as well as Bitcoin, Litecoin, Ethereum, etc. as cryptocurrencies however this is a bit of a misnomer. The first part "crypto" comes from cryptography or the art of creating codes, and the second part, currency is another word for money when found in a thesaurus or dictionary. When it comes to economics however, in order for something to be defined as currency it must be a universally accepted medium of exchange, a unit of account, and something that is fungible, durable, and portable. Money is all of this as well as a store of value. In a Macro Economics quiz that I recently took, one of the questions was "Is Bitcoin money?" I chose yes due to the simple thought process that Bitcoin = Cryptocurrency, Cryptocurrency = Currency + Crypto, Currency ≈ Money. Therefore Bitcoin = Money. I was wrong, according to my professor, for two reasons. One is that Cryptocurrencies are not universally accepted. Of course no currency is universally accepted, but the US Dollar fits this requirement much better than Bitcoin or Steem does. This isn't just because more stores accept it, but because it is Legal Tender. It shall be accepted as payment for all debts, public and private. The government must accept the payment of your taxes in US Dollars. They do not have to accept your Steem however.

Next, there is the unit of account requirement and the store of value requirement. Steem Dollars help with this. Unlike Bitcoin, their value is fairly predictable. Not perfect, but close. Bitcoin, Ethereum and other cryptocurrencies however are nearly useless for this purpose as the value, price, or exchange rate of these digital assets changes constantly. With twenty five cents for example you will always be able to buy a gumball. At least in the last few and coming few years. A gumball in Bitcoin however is .000031 BTC. Only a few years ago however it took a few bitcoins to buy a gumball- that is if anyone would accept Bitcoin for gumballs. Because the value of cryptocurrency is so volatile, we generally measure it in other currencies such as US Dollars or Euros.

This can all change however and it can change very quickly. Some countries are looking into accepting cryptocurrency as legal tender, and online market places are beginning to accept it more and more often. It is still relatively unlikely however that your local deli will be asking you for for .0006251 (as of 12:25 am 20 Nov. 2017) Bitcoin for a sandwich. Until the average person starts listing stable prices in Steem, Ethereum and Bitcoin, and until the government accepts them for taxes payment, so called cryptocurrencies are more accurately "Digital Assets".

Be sure to UPVOTE, RESTEEM, and FOLLOW

--Aaron