The bitcoin dilemma

Cyrptocurrencies in general, and bitcoin in particular, have captured the imagination of an increasingly curious global population, especially over the last year or so. But more importantly, the reason why bitcoin and other cryptocurrencies have been giving economists, users and policymakers sleepless nights is the difficulty it poses in classifying and characterising it. And to understand why it is so, one needs to step back and take a look at what we consider as the defining characteristics of a currency in the modern world. 

There are broadly two types of currencies in this world; fiat currencies and alternative currencies. The former