Bitcoin's Taxonomy

Bitcoin, the first and best known decentralized digital coin, has sparked a global debate regarding its fundamental nature and appropriate categorization. Since its inception in 2009, bitcoin has defied easy classification, exhibiting characteristics that blur the lines between traditional asset classes. This lack of a clear, universally accepted categorization has significant implications for regulation, taxation, accounting practices, and the broader understanding of bitcoin's role in the evolving financial landscape. This article delves into the multifaceted nature of bitcoin, focusing on the comparative analyses of bitcoin vs fiat money and stocks - traditional financial assets. Analyzing, systematizing and generalizing the scientific works of modern scholars and financial engineers, the authors of this article aspire to compare theory with practice of bitcoin use. Comparative analyses of bitcoin vs stock demonstrate their feeble semblance from the point of view of beneficiaries of a new emission, acceptance, functioning as a store of value and high transaction costs of trading, while such features as volatility, value growth potential and regulatory oversite were proven to be common only partially. At the same time, contrary to conventional wisdom, there was likeness discovered in their use as a unit of account and medium of exchange, which they both lacked. Any semblance between bitcoin and stocks was not found in their impact on the environment, riskiness, backing, and emission’s entity. When comparing fiat currency with bitcoin, the authors counterposed them focusing on their essence, contrasting contemporary money that can’t exist without the debt relations of bank bookkeeping, to a mere book entry on a virtual ledger. Partial semblance was detected in their functioning as a medium of exchange, though absence of status of a legal tender makes acceptance of bitcoin optional – in contrast to mandatory in case of cash. Against the background of accelerated growth of bitcoin market capitalization the issues raised in the article seem topical and highly debatable, necessitating future research.