The original Bitcoin Whitepaper describes Bitcoin as a “peer-to-peer electronic cash system”. This of course makes people ask is Bitcoin a medium of exchange? This is because that’s exactly what we use cash for now… but it misses something pretty obvious.
New technologies don’t just magically turn up 100% fully completed and perfect. When Steve Jobs dropped the OG iPhone all those years ago it didn’t even have 3G or an App store! It was nothing like the polished, sleek iPhone you get today but it was still a phone.
Similarly, while Bitcoin functions as a medium of exchange and can be used as electronic cash right now, the answer to this question is a bit more complicated. So let’s simplify it and also peer into what the future holds for this amazing new technology.
Is Bitcoin A Medium Of Exchange?
Yes. While many “experts” like to claim it’s not, Bitcoin is in fact being used by millions of people all around the world as a medium of exchange. One only has to look at the long lists in our What Can You Do With Bitcoin? post to see this.
From bricks and mortar to online stores there are now hundreds of thousands of businesses that accept Bitcoin daily as payment. I’m sure you’ve seen them here and there and maybe even purchased something already with sats. However this buying of goods and services is just one aspect.
Protesters from Belarus to Nigeria use it to protect themselves and carry on the fight, women in developing countries use it to get paid even though it’s illegal for them to have a bank account and many more use it to send billions in remittance each year. To say that it’s not a medium of exchange while millions actively use it every day is gas lighting plain and simple.
Recently the new communications protocol Nostr (Notes and Other Stuff Transmitted by Relays) has also integrated with Bitcoin via its Lightning Network. You can now “zap” sats to anyone, anywhere instantly just like you might “Like” a post. If you want to give it a try you can send us some sats by clicking on the lightning bolt under our profile then give us a follow! These “zaps” are already being used to pay people for doing work, often anonymously.
All of these examples encompass the use of Bitcoin as a Medium of Exchange, however it’s important to note that people in different parts of the world view and use money differently. One can make the case that Bitcoin isn’t used as a Medium of Exchange if they’re only referring to first world countries… while at the same time other countries adopt it as legal tender.
Day to day, your average person in France or the USA isn’t going out and buying their coffee with sats. It absolutely can be done and used that way, but most don’t currently do it. We’ll get to why this is the case later, but perhaps we’re getting a bit ahead of ourselves.
