It can and de facto serves as money.
The only problem imho is what happens at the limit as the last bitcoin will be mined?
Bitcoin is deflationary in nature and as a result there is an incentive to hold it, unlike fiat currencies, which are mildly inflationary.
If everybody holds there will be no exchange of value.
The beautiful solution that works for now is PoW - everybody has a chance to get a newly created Bitcoin for Watt-Hour.
This drives the network.
But ones we are at the limit, what will be the incentive to run such network?
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Everyone has a price.
I don't envision many people holding onto their bitcoin when their initial $1,000 investment can comfortably pay for a 50 year retirement with a nice house or two, paid for "in cash", ta boot! But perhaps those that do will get the 2,000 year retirement plan and several islands paid for in cash...lol.
However, I do tend to agree with the camp that says bitcoin is not ideal as a currency. When I first got word of bitcoin back around early 2012, IIRC, it was sold by most of the sources that I researched it at as "gold 2.0", not "dollar 2.0", to which I agree.
It's everything that gold is (besides not being something physical), but, assuming the network stays at least at its current size, it's also the safer option as a store of value in terms of keeping it out of thieves hands and much cheaper, safer and quicker to send where you want it.
Gold has the advantage when it comes to guarantees as to whether it will exist at x date in the future, but bitcoin has both the aforementioned advantages on top of the fact that it requires literally no space to store, besides perhaps the area taken up by the number of neurons required to remember a favorite quote with a change to one or two of the words (in the case of a "brain wallet").
As the main bitcoin chain stands today, I believe it has a good chance of eating into 10's of percent of gold's market cap in the coming decade, as more and more people start to discover some of these advantages and the test of time on the network raises assurance levels among the once skeptical crowd.
Hi @jamesbrown,
Sorry for not being clear on the meaning I put in the definition.
i was just following @steemrollin economic assumption that Bitcoin can serve as a store of value, medium of exchange and as a unit of account. I absolutely agree with you that Bitcoin at the limit will likely be turned into gold, i.e become the store of value.
What I meant by exchange of value should be considered in the vein of medium of exchange.
At the limit (one the last coin will be mined) I think this function will disappear as there will be no apparent incentive to mine and therefore maintain the network to fascinate exchange (as in I send you 1 Bitcoin out of my wallet to yours, but there could be none to validate the transfer).
And the solution to this problem (of preserving the network) would be an interesting experiment in itself.
Yeah, I read somewhere that miners will be paid in transaction fees alone at that point, but that's a major problem if bitcoin isn't spent at a high velocity and no one is going to want to use it if the fees get too high to offset the lack of minting rewards.