Is Bitcoin a viable currency option? This question is being debated over for many years now. The basic functions of any currency are for it to be a store of value, a medium of exchange, and a unit of account. Although bitcoin meets the criteria as a store of value, it might have failed as a medium of exchange [on a local level] and a unit of account.
Moreover, for a currency to be a unit of account, it must be able to measure the real economic value of an item. For instance, in everyday life, an item’s value is always seen through the prism of fiat currency. While some retailers use Bitcoin in pricing items, customers face a problem while processing the payment in terms of Bitcoin‘s value. This, in turn, makes people go back to fiat as it is more simple and convenient.
Addressing the question of – ‘How do companies know how much bitcoin to charge for a product’ becomes important. Author and Bitcoin analyst Andreas Antonopoulos addressed this question in one of his recent videos. Antonopoulos declared that Bitcoin should not be used in pricing items.
“Bitcoin is a store of value and not a good unit of account. Due to its small size and limited liquidity, when operated on a global basis, it is subjected to much more volatility. So it is not good for pricing things.”
To the query on how payments can be carried out using Bitcoin, Antonopoulos noted that the retailers should price all their products in a currency that the customers are familiar with, and then on checkout, if customers select Bitcoin, the system should convert the price to relevant bitcoin price at the moment so that the customers can pay a specific bitcoin amount.
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