What is money? Money is a unit of measure for exchange purposes. Money is used for the assessment of the goods, the solution of the debts, which represents the work done, and standardize the measurement of production. Money has to be divisible, portable, stable value, easy to obtain and durable over time and should be trusted for all parts that use it. Imagine the money that is too big to divide into pieces, heavy wearing, booty after 2 days, it is easily damaged or can be consumed by animals? If these are the characteristics of the coin, it would not be that the commercial agreements useful and many would not happen.
The most important element of money is trust. If you work for someone and you are not sure if you are going to make money, would you do the job? If you did the job, and who received a payment in something that was not accepted in many places, it is a valid payment? The economy system and money is based on trust, and can be broken by a lack of confidence by most people. A race in a bank is a classic example of people who lose confidence in a bank and break shortly after. Confidence is also the pinnacle of commercial and business agreements. It is that they do not believe that the person who is doing an exchange with is trustworthy, the agreement would not be launched. Privacy is an element of confidence. If every treatment you made was transmitted in the public sphere, a part of the trust would be lost. Someone can rebeam (steal) from your business or steal you from the earnings after the deal is done. The best security is achieved through privacy. If someone knows he has done a lot of money, they will find a way to steal that if that is his intention.
In the case of Bitcoin, it does not work as money either? It is portable, easily divisible, can be used to assess settle assets and debts. Is the stable value? Since the price of Bitcoin moves a lot in front of other currencies, the answer is probably not. If you are trying to buy a basket of apples and you are paying for them in Bitcoin, those apples can duplicate their price in a week, and then go down 30% next week and then twice as much as soon as. If each transaction was of this volatile, you will not be able to buy many goods and know how much you can spend. The same would happen with business. The price of all the components could fluctuate a lot and create a lot of problems in making offers because the costs and income would vary too much.
Bitcoin is trustworthy? Trust can be seen in many ways. In traditional monetary systems, the value of a currency is being eroded by inflation. This makes them unstable in the long term because they are losing purchasing power over time. Who is the control of this inflation? A school of thought attributes it to superior labor, material and general expenses over time – production supplies for business. Another school of thought says that inflation is a monetary phenomenon, which means that the one who issues money is issuing more money than the goods that occur. Inflation is a legitimate feature of money or is it a slow robbery over time?
If you do not trust how the money system works, you can trust Bitcoin as it is decentralized. The problem with decentralized systems is: Who will cover, for fraud, scams or bad behavior? The regulator or central authority acts as a referee to keep the game clean. If the referee was bribed or biased however, soon confidence is lost and the game may also be played without an arbitrator if the players themselves are honest. If your Bitcoin wallet is lost or lost your passwords, you will not be able to access your Bitcoins either.
Other forms of confidence can be questioned include having limited access to money (capital controls or system malfunction if the digital currency), have to give up much of your money to a third party (taxes, organized crime or such Once the miners of coins and operators of change), the falsification money (physical or digital), theft of identity or loss of trust in the issuer (Bankruptc