Cryptocurrency bitcoin, which has come under rising scrutiny since the recent collapse of Mt.Gox, has a much better shot as a payment mechanism than a currency, says Goldman Sachs. "The most commonly identified properties of a successful currency are that it is: widely (if not universally) accepted as a medium of exchange (and) a stable store of value," Dominic Wilson and Jose Ursua economists at Goldman Sachs wrote in a report on Tuesday. "To achieve this, fiat currencies are generally protected by extensive regulation. They are usually recognized as legal tender; the government is generally obliged to accept them for tax payments; and the central bank is almost always the sole issuer," they added. (Read more: Bitcoin's back to the wall as it fights to survive)

Getty Images

In terms of universal acceptance, the legal status of bitcoin differs vastly around the world. Russia, for instance, has declared the virtual currency illegal; while Germany on the other hand, has embraced it. In Germany, bitcoin is recognized as a "unit of account", meaning it can be used for tax and trading purposes. On the stability front bitcoin hasn't scored very high marks. According to Goldman, the volatility of bitcoin prices so far has greatly exceeded the volatility of other currencies and gold. (Read more: Why Mt.Gox collapse could ultimately help bitcoin)

Since hitting a record high of $1,240 in December, it has been on a wild ride, falling below $500 amid the troubles at Mt.Gox in late-February. It last traded around $637, according to Coindesk, which tracks the price on a selection of major exchanges.