Money is a matter of functions four: bitcoin's validity as a currency

Bitcoin is currently one of the most hot topics in the technology world, there are both proponents and heavy critics of this technology but the proponents have been steadily gaining the mind-share in last few years despite most of the banking systems and governments of the world highly against it. That I think is a great achievement!

Bitcoin is Money

Its high time the critics realize that bitcoin is not a scam or ponzi scheme as many want you to believe. There has been no ponzi scheme in history which continued for decades. Bitcoin's validity as money or a valid mode of payment can be summed up by this short poem which many kids are taught in their beginning lesson in monetary economics:

Money is a matter of functions four,
A medium, a measure, a standard, a store.

In order to be considered a valid payment mode, a currency has to fulfill the following conditions:

1. Medium of exchange: It can be used to exchange goods or services by paying it to someone. Like USD or INR or CYN, BTC can do that too. So, BTC can be considered a medium of exchange.
   
   
2. Measure of value: As a sort of corollary to above, a currency can be used to measure value of the goods or services it can be exchanged for. BTC can do it just like any other currency.
   
   
3. Standard acceptability: Not necessarily a government defined standard though! This is the area where most of the confusion arises. Standard here means that the buyer and seller should agree on the acceptability of this currency, it doesn't matter if its sovereign or not (as per economic theory). During ancient times, even pebbles were used as a currency to exchange for goods and services. The only difference between a barter and non-barter transaction is that the latter doesn't involve a good which has standard acceptability. The Fed insists that the currency should be sovereign but many other progressive governments like Norway and Sweden don't and allow bitcoin transactions just like any other currency. Most other governments of the world are still debating the standard acceptability of bitcoin and whether to allow it or not.
   
   
4. Store of value: A currency should act as a store of value until it is spent. When you get your salary in USD or INR, you can store it in the bank until you can decide what to purchase with them. You can do the exact same thing with BTC, your balance stays on the blockchain until you decide to spend it by transferring to someone else's account at which point the blockchain gets updated (just like a payer's and payee's accounts get settled on a bank's centralized server when a transaction in sovereign currency happens).