Question

Bitcoin fails to satisfy which two of the three functions of money? Question 3 options: A) medium of exchange and unit of account B) medium of exchange and store of value C) bitcoin satisfies all of the functions of money D) unit of account and store of value

Answer 1

Answer:

The correct answer is letter "D": unit of account and store of value.

Explanation:

Bitcoin is the first decentralized digital currency. It is also referred to as a virtual currency or a crypto-currency. Bitcoins are held in a digital wallet and can be sent over the internet. Bitcoin transactions are authorized using a digital signature. The transactions are verified usually within minutes by a network of miners. Once verified, the transaction is permanently stored on a public ledger known as The BlockChain.

Three are the functions of money: medium of exchange, store of value, and unit of account. In order to boost its use, a few merchants have started to accept Bitcoin as a medium of exchange but it still is not considered a unit of account since most items in the real world are valued in monetary terms. Also, it is not considered a store of value because, unlike money, Bitcoin cannot be saved in bank accounts earning interest. Bitcoins must be sold (at profit) to provide the holder revenues.