Georg Simmel in his book Philosophy of Money,described
how money evolves through history and predicted that it
will evolve to the point where it no longer relies on any
substance. He called this stage “perfect money,” which
he described as “money detached from every substantial
value”. Today we are faced with the development of
cryptocurrencies, of which Bitcoin is the best known.
Bitcoin presents a new system of transaction which does
not require governments or middlemen to regulate trade.
Since such currencies are completely beyond substantial
value, the philosophical question emerges whether Bitcoin
is “perfect money.” This essay will argue that Bitcoin can
be understood in connection with Simmel’s idea of “perfect
money.” But will also consider Simmel’s claim that perfect
money is only possible in a stable society and will show the
limitations of cyrptocurrencies and Bitcoin in light of this.