Economics of Bitcoins
An Article Analysis

Money is a driving force that makes the world go round. From the purchases of homes, vehicles, and even to the way we make a living, we cannot escape the importance of currency. Without it every economy in this world may just fall apart. In this article analysis we will look at the various functions of money, the Federal Reserve and its role in the United States (U.S.) money supply, as well as the evolution of bitcoins and its future or nonexistent future in the U.S. Economy.
Money serves as three functions: medium of exchange, a store of value, and a unit of account. The most important function of money is a medium of exchange to facilitate transactions. Without money, transactions would have to use the barter system. The Barter System is the act of obtaining a good or service of equal value in exchange for a desired good or service. A store of value is a medium of exchange that must hold its value for a period of time such as land or art for example. Money is more liquid than the average store of value, due to it being accepted everywhere, in various denominations. Lastly, as a unit of account, money provides a common measure of value of goods and services being exchanged. The supplier and the purchaser of goods make decisions on how much to supply and how much to purchase by knowing the value or price of a good. [1] The two objectives of the Federal Reserve in managing the U.S. Money supply are price stability and full employment. Price stability is the situation whereby the price of goods and services offered in the marketplace either change very slowly or do not change at all. Factors affecting this include employment and inflation. Full employment is the state of the economy in which all eligible people who want to work can find employment of prevailing wage rates. However it does not imply 100 percent