Gold doesn't have much utility other than decoration...but central banks don't hold gold because of its use in jewelry. The use in jewelry is not the main factor in determining gold's value either. Gold is money because it is not easy to manipulate, easily divisible, and difficult to counterfeit. Nothing in principle would prevent bitcoin from have a similar role as money. Just because bitcoin isn't widely used as money doesn't mean it couldn't be widely used as money.
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