The Bank of England lists three jobs money does:
- Store of value – it keeps purchasing power over time.
- Unit of account – prices are measured in it.
- Medium of exchange – people accept it in payment.
Who makes money today?
Today's euros, dollars and kroner are fiat money. According to the Bank of England, most money is bank deposits, created by commercial banks when they make loans. Central banks steer the total and aim for low, steady inflation, about 2% in the eurozone.
The weak spot
That design deliberately makes money a weaker store of value: prices are meant to rise every year. Holding cash means losing purchasing power slowly.
Where Bitcoin fits
Bitcoin attacks the store-of-value problem first. Its supply is capped below 21 million, new coins arrive on a fixed schedule that halves about every four years (the halving), and anyone can verify the total by running a node.
Honestly: Bitcoin is not yet a good unit of account, because its price moves a lot. Most people still price things in local currency. Supporters see this as a stage of adoption; it is an open question how far it will go.
Takeaway
Money is a tool for storing, measuring and exchanging value. Bitcoin is an attempt to make that tool scarce and rule-based instead of managed.