MONEY

1. Medium of Exchange

Money must be a reliable means of payment in the eyes of everyone.
Additionally, money must possess important characteristics as a medium of exchange:

2. Unit of Account

 This allows for the establishment of the price of a good or a service.

3. Store of Value
 
This means that money enables the preservation of wealth over time. Instead of immediately consuming all their wealth, an individual can save in the form of money for future use.

These functions largely rely on the notion of trust, which often depends on institutional factors. People trust national currencies because they are backed by states and robust financial institutions.

And what about cryptocurrency?

 Today, cryptocurrencies (even Bitcoin!) do not completely fulfill the three classic functions of money (medium of exchange, unit of account, and store of value) in an effective and reliable manner in the economy.

Although Bitcoin can be used as a medium of exchange in certain transactions, it is not yet widely accepted for everyday exchanges. Its recognition as a means of payment is limited and heavily depends on the merchants who choose to accept it. In many countries, the majority of commercial transactions are still conducted with fiat currencies (such as the euro or the dollar).
 Additionally, the volatility of Bitcoin makes its use as a medium of exchange risky. For example, if the value of Bitcoin fluctuates significantly from one day to the next, it makes it difficult to use for purchasing goods or services at a stable price. A seller might receive an amount in Bitcoin, but the value of that amount could decrease significantly before they even have the chance to convert or spend it.

Bitcoin and other crypto-assets are not used as units of account to set prices in a generalized manner. Goods and services are almost always expressed in national currencies such as the euro, dollar, or yen. This is mainly due to the high volatility of Bitcoin's price.
 For example, the price of a good in Bitcoin can change significantly within a few hours due to market fluctuations. This instability makes Bitcoin impractical as a unit of account, as it does not provide a stable and reliable measure of the value of goods and services.

The store of value function is where Bitcoin fails the most compared to traditional currencies. The value of money needs to be relatively stable to serve as a store of value, which is not the case with Bitcoin. Its value has shown extreme fluctuations over time. For instance, the price of Bitcoin can drop from $60,000 to $30,000 within a few months, representing a considerable loss of purchasing power for anyone holding Bitcoin as a store of value.

For something to be a good store of value, it must preserve its purchasing power over the long term, which is not the case with crypto-assets due to their volatility and lack of regulation.