What is a Currency?
Money makes the world go round. Every school, highway, home, etc. needs financing in order to be completed. We use it as a “medium of exchange” so that we are able to acquire goods and services with more efficiency instead of having to barter. It is simple and yet it can get very complex as you dig deeper into the definition of what is technically considered a currency.
The term “cryptocurrency” is inherently incorrect. Crypto only satisfies one of the requirements of being a currency which is being a “medium of exchange”. However, it is not a unit of account nor a store of value. If one were asked the value of five dollars, then you could associate it with around one dozen eggs or one gallon of milk. Asking the same question regarding crypto would result in replying with an answer that would need to be converted to US dollars (or other national currency) first. To be considered a unit of account, the value must be able to be measured by the goods and services that it can directly obtain, and its value should not be solely measured by another currency. Furthermore, crypto does not act as a store of value as we have seen the price of crypto rise and fall drastically over the past few years. A currency must have stable, nominal buying power in order to act as a store of value. The massive price fluctuations would infer that crypto would be better categorized as a speculative asset rather than a currency. This is not to say that crypto is a bad thing, just that crypto is not a currency.