To be generally accepted as a medium of exchange, the number of settlement points should be high enough that a market participant would accept the cryptocurrency payment (Levulytė & Šapkauskienė, 2021). This ensures that the market participant can use the received cryptocurrency for payment purposes himself. Levulytė and Šapkauskienė (2021) state that
Next to low costs, Peters et al. (2015) also relate the qualities for online payments of Drehmann et al. (2002), security, and a degree of privacy, to cryptocurrencies.
Cryptocurrencies also partially meet the function of a unit of account as they can be counted and divided (Levulytė & Šapkauskienė, 2021). However, the price fluctuations of cryptocurrencies hinder the other part: comparing costs for goods and services over time.
Ammous (2018) also asserts that price volatility negatively impacts the unit of account function and the storage of value function. Levulytė and Šapkauskienė (2021) share this view though they also add that the fluctuations of
Peters et al. (2015) argue that it might be possible that cryptocurrencies will satisfy all three functions in the future.
© Prof. Dr. Isabell M. Welpe / Florian Knöchel