Is crypto money?

Are cryptocurrencies really money?


A cryptocurrency is a digital or virtual currency that is secured by cryptography (unique computer coding), which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology (a distributed ledger enforced by a disparate network of computers). There is a chapter on the blockchain later.


A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. Experts believe that blockchain and related technology will disrupt many industries, including finance and law.


The money that we use today was designed before the internet. It does not serve the digital world in the manner it needs to. Example…If I hire a graphic designer in India and she does a great job for me. When it’s time for payment, I first need to contact my bank and order dollars. A process that takes 2 days. As India’s currency is in rupees, those dollars must be converted. I do not have a rupee bank account, so that’s another 3 days for the banks to negotiate. By the time the designer gets her money, easily 7-10 days have passed. In addition, we both would have paid excessive fees to the banks for these transactions. My own money is basically locked up in a cage and I need to ask permission to pay someone else.


Along comes Bitcoin and other cryptocurrencies. The graphic designer drops me her wallet address via email or social media, and I pay her. She has her money in less than 3 minutes. Internet money for an internet era.


  1. Means of Payment

Cryptocurrencies are not regulated by any governments, however, let’s look at some interesting statistics why I think that Bitcoin passes the Means of Payment test.

  • More than 76 million people as of August 2021 created unique Bitcoin wallets on, a site that makes buying Bitcoin possible. That’s about 43% more than a year earlier and a 171% increase since 2018.
  • There are more than 270,000 confirmed transactions of Bitcoin daily, a staggering amount.
  • Research from July 2021 shows that 89% of American adults have heard of Bitcoin.
  • As of 2021, about 106 million people around the world use cryptocurrencies.
  • About 46 million Americans (roughly 22% of the adult population) own a share of Bitcoin.
  • By 2025, financial analysts say, the global blockchain market will grow by $25.1 billion U.S. dollars.
  • 29% of all millennial American parents own cryptocurrency.
  • 51% of Americans in May 2021 had bought cryptocurrency for the first time within the last 12 months.


Cryptocurrency adoption is happening fast and 2021 was the year of institutional adoption. If you are still unsure, you cannot deny these three facts:

  • Coinbase was listed on the NASDAQ in April 2021. The very first cryptocurrency exchange to list on a stock exchange.
  • The SEC (Securities Exchange Commission) allowed the first five Bitcoin ETFs to list on the stock exchange, meaning institutions can now buy Bitcoin for their members and clients.
  • El Salvador (a country) made Bitcoin legal tender alongside the US Dollar.


  1. Unit of Account

Divisible – The smallest unit of a Bitcoin is called a Satoshi (sats). Think of Rands and Cents. You will often hear the crypto community say they are “stacking sats”. That means that they are accumulating pieces of cryptocurrencies. All crypto is divisible and the sats add up to a whole coin.


Fungible – Are cryptocurrencies interchangeable? They most certainly are. One Bitcoin is the same as another Bitcoin. You can also trade currency pairs. This means you can change one Bitcoin for its equivalent number of Ethereum.


Countable – A unit of account is also countable and subject to mathematical operations. You can easily add, subtract, divide, and multiply units. This allows people to account for profits, losses, income, expenses, debt, and wealth. Cryptocurrencies also pass this test.


  1. Store of Value

The biggest disagreement between the believers in traditional finance and the crypto community is on the store of value requirement. Does Bitcoin act as a hedge against inflation if it is so volatile? It can be reliably saved, stored, and retrieved, but we cannot ignore that Bitcoin is volatile. A 30% drop or 40% increase is deemed normal. That is not normal with any fiat currency.


What we however need to consider is that Bitcoin is only 13 years old. Most other currencies are still in their infancy. Currencies take decades to stabilize. So when people think they are late to crypto, I just smile because I know they are so early.


Printing of Money (Fiat)

New investors often do not understand why the printing of money is bad for economies. It is a fact that 40% of the total dollars ever printed in history was printed in the past 12 months. When you print more money you devalue other assets in your economy and the dollar, especially against other first-world stable currencies. The more there is of something, the less valuable it is. It is simple economics. Imagine the Reserve Bank prints R5 trillion tomorrow and just hands it out to anyone willing to take it. The value of your Rands in your bank account will drop significantly. The printing of money creates inflation.