I dislike that take. Taxes don't really matter, and there are examples of currencies that are worth something and that are not used for taxation. Cigarettes in prison is an example of a currency that is not taxed per se, the early US dollars are another example.
Currency is useful because people have faith in its properties: scarcity and ubiquity as a medium of exchange. Dollar is important because people have faith in the US government to not dilute it (too much), and because everyone in the world accepts it.
Bitcoin _is_ a currency. Its scarcity is limited by its construction, and it's widely accepted. But it's a bad currency, that is mostly backed by illicit transactions, and its "mechanical" usability just sucks due to delays and transaction fees.
>Cigarettes in prison is an example of a currency that is not taxed per se.
Yes, cigarettes, like the dollar have an intrinsic value. You can smoke them and nicotine makes you feel good. It is similar to the way that I can pay my taxes in USD and feel comfort in the fact that I won't have to barter for cigarettes in federal prison.
Bitcoin is not a currency because it no longer meets the primary economic definition of currency - a medium of exchange. It is a speculative asset. A security, if you will. It can be used as a currency in the same way as gold bars and bricks of cocaine can (barter system) but it's not a currency.
Currency is useful because people have faith in its properties: scarcity and ubiquity as a medium of exchange. Dollar is important because people have faith in the US government to not dilute it (too much), and because everyone in the world accepts it.
Bitcoin _is_ a currency. Its scarcity is limited by its construction, and it's widely accepted. But it's a bad currency, that is mostly backed by illicit transactions, and its "mechanical" usability just sucks due to delays and transaction fees.