Bachelor Thesis from the year 2018 in the subject Economics - Monetary theory and policy, grade: 1,7, Friedrich-Alexander University Erlangen-Nuremberg, language: English, abstract: This thesis aims to examine processes and determinants in the process of competition between two kinds of money. The first part of the thesis introduces the reader to Bitcoin and fiat money. In the second part those two concepts are compared to each other. Here differences between them with regards to the kind of money they are, the topic of centralization in both systems, the levels of privacy they offer and contemporary acceptance and volatility are examined. Afterwards the third part of the thesis discusses the process of competition between Bitcoin and fiat money. This part specifically deals with the the role and possible reasons for preferences of private and government agents, the role of network-effects as well as switching costs and finally with the possibility of government interventions.