It is important to understand the deep-seated problem that is being addressed before we can fully benefit from a paradigm-changing technology. The only way to determine what may be a suitable solution is if we understand the problem at a granular level. People have seemed obtuse to Bitcoin, as most simply don’t understand the problem of money; if you’re one of these people, do not be hard on yourself — very few do understand. This paper will provide the beginner with information about the current problem of money. The solution to the problem becomes obvious once it is understood. With regard to radical disruption, humans have a hard time adjusting to a new reality. It is not only that people fear change, but more so, we have grown accustomed to our environment, and can’t see what is broken when it has been all we have ever known.
“If I had asked people what they wanted, they would have said faster horses.” — Henry Ford
Moreover, Bitcoin has a vast technology stack on top of its base protocol — drastically expanding use cases — when these open-source, worldwide computers work, they are able to transfer and store value. There are a lot of possible applications for Bitcoin with different people with different motivations, and there is a huge number of potential use cases. With this worldview, Bitcoin is unbeatable on three essential applications: finite and programmatic money supply issuance with no risk of debasement (inflation) — the wealth you own will never devalue over time. Awe-inspiring wealth. In my opinion, 4.2 billion people worldwide live under oppressive regimes and dictatorships that segregate wealth from citizens through force or capital controls — by having bank accounts frozen, citizens have no option to leave.
- In return you pay for uncensorable speech.
- Banks and money are often used as the primary tool of authoritarian regimes to silence opposition by freezing accounts and preventing funding. Those who must fund opposition can perpetrate atrocities that fall on their citizenry at a drastic imbalance of power, resulting in drastic imbalances of power.
- Bitcoin’s success is contingent upon these three applications, as is the expanding universe of application alternatives. A majority of Bitcoin newcomers think these three use cases of Bitcoin are irrelevant or a “solution in search of a problem.” This is understandable, since Western democracy is common for people to view things as they relate to western democracy.
Economics, central banking, and money are very boring subjects for most people. Often, people are overwhelmed by raising families, making ends meet, and advancing careers; therefore they rely on “experts” to handle these tasks. You do not need to spend hours on quantitative easing, interest rate policy, the reverse mortgage market, the currency game theory among competing nations, or the rationale for negative yielding bonds. Bitcoin has and is a solution to many of these challenges; however, we will never comprehend why Bitcoin does what it does until we comprehend the underlying problem it solves. The famous quote by Abraham Lincoln states, “If there are six hours to chop down a tree, I will spend the first four sharpening the axe.” It is important to sharpen your axe for chopping down the tree, and understanding the problem well is crucial to Bitcoin enlightenment. Bitcoin can and is a solution to many of these topics; however, we will never understand why Bitcoin until we understand the underlying problem it solves. Over half of every transaction in a society occurs because of it. Our everyday use of money and how it touches us in many ways allows us to have an incredibly poor understanding of what money is about. Therefore, money should simply be an abstraction of value that frees us from the inconvenience of barter — or easier said, a LEDGER of who owns what.
Fig. 2: What defining characteristics make up a dependable monetary good:These disparities led to a lack of fungibility and therefore the buyer and seller had to resort to negotiating the price for the particular seashell — making pricing difficult.I will not laboriously review these characteristics in great detail; but instead instead focus on the key shortcomings in our current monetary system and what the Bitcoin protocol offers to do about them.
We need an elementary understanding of monetary history in order to understand how we came to the precarious precipice we find ourselves in today.Culture has a common resounding artifact that defines what type of money each culture used. Beads, feathers and other ancient artifacts were used as currency as a child in many cultures. Despite our daily use of money and how it controls our lives in many ways, we collectively have a very poor understanding of what gives money value. Seashells, for example, have been used in many cultures for this reason.
There is no single seashell that is identical in size, shape, aesthetic appeal, or condition.
Among the most important of all currency components is scarcity. As the supply of rocks is near infinite, few rational economic people will trade finite goods and services for infinite amounts of money.
"There are stories in archaeological dig sites that mountain civilizations used seashells as currency, however coastal cities used quartz as currency, since it comes from the mountain tops — as long as this resource is not naturally occurring where you live, we can consider it a source of value." By 600 BC, a major breakthrough had been reached in order to solve the problems of fungibility, scarcity, and, in many instances, portability. These systems of money didn’t work well primarily due to the fact the monetary good was not fungible. To illustrate this lack of fungibility would be the example of seashells used in many cultures. In the past, gold and silver served as good money. Their track record is undeniable. One Roman denarius coin carried the equal value of every other Roman denarius, thereby reducing the issue of fungibility. Another key component, and arguably the most important of all currencies, is scarcity. We cannot use rocks as currency evidenced by supply being near infinite; no rational economic person will trade finite goods and services for an infinite amount of money. As Andreas Antonopoulous points out, “One can look at archaeological dig sites, in which mountain civilizations used seashells as currency because it comes from the coast, and coastal communities utilized quartz as currency because it comes from the mountains — as long as this resource is not naturally occurring where you live, it has the potential to be a good money.”
In 600 BC, a major breakthrough was reached to solve this issue of fungibility, scarcity and, in many instances, portability. Being rare by nature, gold continues to hold its value throughout time. Salvability means the ability for a good to retain its value over time.
Gold and silver have served as sound money for millennia and their track record is undeniable. If you had one Roman denarius coin, it was exactly equal in value to any other Roman denarius coin, solving the fungibility issue. Coins were small enough that they were fairly portable (albeit with risk of theft), but it did drastically improve upon the portability of previous barter systems; one didn’t have to bring a flock of chickens or a cow with you wherever you went to settle a transaction. Lastly, precious metal-minted coins solved the fundamental problem of scarcity. If a gold "token" is in your possession, then that gold belongs to you by default. This theft, portability and divisibility, combined with the corrosive nature of gold coins, led to our global societies converting to ledgers. Gold being so scarce by nature gives it outstanding salability through time. As a solution to these two problems, governments created gold certificates (essentially an IOU). There was a plan to store gold in a central vault and distribute a certificate to the depositor that was directly redeemable for gold in proportion to the certificate (or dollar).
With an ounce of gold deposited, you would receive a gold certificate “dollar,” in proportion to your gold deposit. In respect to gold,the yellow metal is not easily divisible, if you were to pay for lunch with gold it would be cumbersome to break off a piece of a gold bar that would be commensurate with any low value transaction. Divisibility is a major drawback to any precious metal. We now rely on the banks to keep track of what's owned, so our ledger became centralized. With centralized ledgers, there is one major drawback: You are relying on the party holding the ledger to not devalue the currency (dollars) and to keep gold in direct proportion to the currency. Unfortunately, every single example of central banking has compromised this trust. What changes do you notice from our current $5 bill?What changes do you notice from our current $5 bill?The picture above, on the top, is an early American five dollar bill.
Centralized ledgers (banking) have the benefit of mitigating theft (storing wealth in a bank is more secure than your home), and it helps rectify the divisibility issue of gold coins. Scarcity, the most important characteristic of money, is now totally in the hands of the In some countries, in fact, 4.2 billion people live under oppressive authoritarian governments. Bitcoin is a technological solution that prevents censorship and allows people to exercise their human rights. (which is neither federal nor has any reserves) (a future discussion for another day). The idea was to keep gold in a central vault and issue the depositor a certificate that is directly redeemable for gold in direct proportion to the certificate (or dollar). Regardless of how powerful or influential someone is, they can never create more. To say that the paper money issuers are failing at keeping our money scarce is understatement of the century. By moving towards paper money, we trust one body of bureaucrats to do so. As a result, bitcoin's market capitalization hit $1 trillion, making it the fastest asset in history to reach this figure. It's safe with your banks. “The money supply is sufficient and there is an infinite amount of money in the Federal Reserve.” “Paper money eventually reverts to its intrinsic value: zero.” — Neel Kashkari, Minneapolis Federal Reserve President — Voltaire Inflation and Wealth DestructionIt is increasingly common to hear statements along the following lines: "$24 for lunch?
As a result, what is more likely here: Is it the one denominator in all of these things (money) becoming less valuable or is every good and service being inexplicably getting more expensive? Do you think about this question for a moment? It's not clear to me how almost every good or service has become less affordable. In the past 30 years, there have been huge advances in computing, engineering, automation and manufacturing, so shouldn’t things decrease in price, instead of becoming more expensive? It’s my contention that the wealth you've accrued in state-issued currency is losing value. We may not be able to agree on a common problem for the same reason as we cannot find common ground in our political sphere. For the baseline definition of inflation to be used, it might be a phenomenon in which the overall price level increases and a unit of currency buys fewer goods and services. It is a monetary phenomenon, not a price phenomenon. Prices go up when inflation occurs, not the other way around. Let $1,000 sit in a checking account and you may only be able to purchases $950 of goods and services the next year, and this loss will continue to compound every year.
“Your ATM is safe. Your banks are safe. There’s enough cash in the financial system and there’s an infinite amount of cash in the Federal Reserve.” — Neel Kashkari, Minneapolis Federal Reserve President
“Paper money eventually returns to its intrinsic value: zero.” — Voltaire
Inflation and Wealth Destruction
In a year or two, wheat unintentionally grows everywhere because of some inexplicable reason. People's yards are becoming engulfed in wheat and which soon becomes a noxious weed. Due to the considerable supply of wheat, the market becomes saturated. Due to the rising supply, your wheat is now worth naught. The same phenomenon is occurring with our money, which is paper — in an infinite quantity.A simple glance at this graph can see where accelerating inflation began. In 1999, we had to abolish the scarce component in the dollar, which enabled the printing of “infinite paper” that led to massive inflation. These policies offer perpetual bailouts to governments, as they now have the ability to print money to meet expenditures, and they never have to collect any revenue by raising people's taxes. Savings are being taxed, just in a different way.
The chart below shows that this money printing trend is rapidly increasing: In some countries, in fact, 4.2 billion people live under oppressive authoritarian governments. Bitcoin is a technological solution that prevents censorship and allows people to exercise their human rights. (FRED)FREDAs you can see from the chart on the left, if you are holding your wealth in dollars or any other paper currency, your lifelong investment is getting diluted away very quickly. As the velocity of money slows down, bigger problems begin to arise. A baseline definition of inflation may be a phenomena in which general price levels rise, and each unit of currency buys fewer goods and services. People have been prudently protecting themselves by investing their dollars in dwindling assets to retain purchasing power. For example, the above items, such as fine art, equities, real estate, precious metals and bitcoin, have become favorites. If you have $1,000 today and let it sit in a checking account, next year you may only be able to purchase $950 worth of goods and services, and this loss is compounding every single year. The even more unfortunate news is that this devaluation is rapidly accelerating (losing value faster and faster). A monthly CPI is calculated by the U.S. Department of Labor by taking a weighted average of purchase prices of various items purchased by consumers and inferring which proportion of various items are used for a typical household budget. Essentially, they get to decide what goes into this basket of market goods. Some critics say this basket includes goods that are weighted based on their average. It is argued that assets are undervalued. The most relevant factors include home prices, education, equities, health care, cars and services. In many ways, this resembles a teacher telling the student to study, take the test every month and just report back his or her results. How do you expect that report to turn out? May they be able to report 2% inflation yearly?
If you have to look at home prices in your area, how much you will need to spend on education, and the amount of hours you’ll have to work to buy one share of the S This fallacy is easy to understand without knowing anything about economics. The advancements in manufacturing, automation, software, machine learning, and efficiencies in supply chains make that a reality. Moreover, digital goods (Netflix subscriptions, software, etc.) are inherently deflationary as their production is essentially zero. As you can see below, this money printing trend is accelerating:
Digital, technological, and e-goods have a high marginal cost due to their inherent deflationary characteristics. I very much agree that data such as these is overpriced when calculating CPI, creating an entirely distorted view of the real world. The broader problem of inflation is one that is a global issue, as according to the On the right, the graph illustrates the gains the top 1% achieved in the U.S. economy since the implementation of limitless paper money.. Seven billion people live under inflation that is as pernicious as the United States, with hundreds of millions of global citizens suffering from hyperinflation. Venezuela, for instance, experienced a rate of inflation of 130,060% in 2018 — this is a population of 28 million people that lost everything. Venezuelans need seven bolivars to buy just one chicken.— Michael Saylor, CEO of MicrostrategyPublicly traded companies like Tesla, Microstrategy and Square, to name a few, have been converting cash off their corporate balance sheets to bitcoin in an attempt to increase their “economic battery.” In other words, we need a monetary good that is salable through time and that requires scarcity.
A lot of companies have received a warning that cash is no longer a corporate asset. It is a liability that's melting ice cubes.
A Critique Of CPI
The Bureau of Labor reports inflation statistics to the public using a metric called CPI — or the consumer price index. An international, voluntary system of money that no one is in control of — that no one can ever control. It is mathematically imposed that there will only be 21 million bitcoins ever — no one can alter it. In this system, currency units are created programmatically, making the supply easily auditable by everyone around the world. What is arguably underrepresented are assets. As in the French Revolution, where the bourgeoisie encountered guillotines in the street, it is not surprising that this occurred. As we look at our current distribution of wealth, it is at best demoralizing, along with modern U.S. politics. It seems that politicians and their constituents talk past each other, providing common ground is a calamitous exception. It may be argued that the reason we are unable to find common ground in our political sphere is that we cannot agree on a common problem. The prevailing ideology tends to blame immigration and the state when it comes to national financial problems, while the opposing ideology blames anyone currently able to make money and is seen by many as demonizing productive citizens. We might discover that we have a lot in common if we saw that one of our most destabilizing issues(money) as an opportunity to understand each other better.
Common consumer goods are, for the most part, inherently deflationary (the price naturally comes down over time); the advancements in manufacturing, automation, software, machine learning and efficiencies in supply chains make this a reality. While the Titanic is sinking, Team Red and Team Blue disagree about the best arrangement of chairs on the deck. There is a strong argument that wealth inequality is more of a phenomena related to an inefficient economic system than any policy issue. Inequality contributes to the problem at hand; however, this writing will go on to show that it is one of the many factors causing it.
There is a common ethos in Bitcoin, "Don't trust, Verify." Money As A Tool For Controls: Censorship“In a world where billions of people can potentially lose their bank accounts because of their ideas and opinions.” Alex GladsteinCash has been used as a primary means of peer-to-peer economic exchange for decades.As you can see from the above graph (top), between productivity growth and hourly wage earners' share of productivity growth since 1971.
A germane topic to address is that inflation is a global problem. It is simple: wages fall behind inflation. A different way of looking at it is that as a wage earner, you have not had extra money to put in the stock market, and as a result, you haven’t taken advantage of all the growth that has occurred in the stock market. You have to pay for other inflated assets as well: housing, cars, health care and the like, and your wages have remained deficient at keeping up with the rising prices.
Publicly traded companies like Tesla, Microstrategy and Square, to name but a few, have been converting cash on their corporate balance sheets to bitcoin in an effort to preserve their “economic battery.” The ownership of assets increases the wealth of those who can afford to invest, while those who are not able to invest fall behind.
“Cash is no longer an asset for any company, it’s a liability — it is a melting ice cube.” — Michael Saylor, CEO of Microstrategy
“In retrospect, it was inevitable.” — Elon Musk, after moving a portion of the Tesla balance sheet to bitcoin
Statistics from the U.S. Census BureauSource: Bureau of Economic Analysis, BLS Median and lower-class income has grown significantly faster than the upper-class since its transition to paper money. This graph on the right reflects the impressive real GDP growth per resident of the United States, but also illustrates the overwhelmingly large inequality in those gains. The graph below illustrates the decline in wages share of the economy’s total income, further supporting the argument that this is a phenomenon caused by paper money. For that, we need to understand how the government provides liquidity into the financial system. Quantitative easing, rehypothecation, rate targeting, and other complicated economic terms and concepts are used by economists. These concepts have made the everyday consumer spend countless hours reading about (I don’t blame them).
It is the use of money as a political tool that poses a problem. In The Fiat System
Wealth inequality is one of the most destabilizing factors in any society. We all know that the performance of the stock market is the most commonly used indicator of the sales of the U.S. economy in a given year, no matter how naive it may appear. There is no other variable that has a greater impact on the American stock market than the Central Bank policy, and this is undisputed. In 2020, when there was the greatest public health crisis and the highest unemployment rate in the history of the United States, how was the stock market still raising? Think about that for a few moments, and avoid relying too much on the stock market. The estimated amount of US capital expenditures in 2020 are 22% of the total. During that period, from 1776 to 2020, 22% of the total U.S. currency was printed.
Those stocks go up, not down. — Dave Portnoy, Barstool SportsThe skinny: Our markets are not free, and they haven’t been for quite some time. By printing money using artificial means, the government stabilizes stock and other assets. The market frees them from this artificial practice. Those with excess capital become wealthier since stocks only go up; however, this means that the poor and middle class are being subsidized through rising asset prices. They now cannot afford a home again. It would be naive to contend that a broken system of money is the only factor contributing to inequality; however, this writing will go on to show it does contribute enormously to the problem. Our outlook is positive: Bitcoin is the roundabout way. Money As A Tool For Controls: Censorship“In a world where billions of people can potentially lose their bank accounts because of their ideas and opinions.”
There are advantages and disadvantages to being a cash payment, depending on your motivations. In many areas of the world, cash acts as a lifeline, since it is a nonsurveillance system, and transactions can be conducted privately. With cash, you can feel secure and express yourself freely. Cash is popular for illegal activities as well, and it is considered a universal favorite for criminal activity. Another way to look at it is, because you are a wage earner, you haven’t had excess capital to keep in the stock market and because of this you’ve missed out on all the inflation gains that have occurred in the stock market. Being able to control money by monitoring and censoring it has given authoritarian governments the ability to surveil and censor money they do not agree with. The government in every country is striving to remove cash from circulation and are moving to a purely digital concept. There are a number of headlines that have been published about the allegations — this is no secret.Bitcoin has a huge number of applications; smart contracts, escrow, streaming money, and immutable messages can all be built on top of this technology stack.If you are a dissident in Russia who is opposed to President Putin, you may choose to support the opposition party anonymously out of fear of reprisal. The Putin regime used several coercive techniques including wealth confiscation to silence the opposition to its power. In a cozy echo chamber, Putin enjoys his nearly 17-year reign over Russia while the opposition parties are barely able to compete.
Income gains for the median and lower percentile have clearly been outpaced by the upper class since moving to strictly paper money. With the approaching impending tyrannical communism taking place, many will try to leave or at the very least support the pro-democracy movement. Under this scenario, "government-controlled bank" becomes a dream and democracy an idle prayer.Bitcoin has a huge number of applications; smart contracts, escrow, streaming money, and immutable messages can all be built on top of this technology stack.The list of countries where money has been used to oppress people is endless: Burma, Myanmar, Venezuela, North Korea, and various areas throughout the Middle East.
Bitcoin is used by anyone with a high-speed internet connection. Bitcoin does not judge your race, religion, political beliefs, sexual orientation, or value to society; it merely recognizes human value. Bitcoin is uniquely capable of facilitating the exchange of value between humans, without regard to any other variables or factors. Monopolies every type destroy societal value. I subscribe to the belief that neither central bankers nor politicians have a nefarious agenda when it comes to economic management, they simply want to appear successful during their time in office. Monopolies in government ruin innovation and oppress citizens. Bitcoin is a way for citizens to leave a state that is no longer serving them. As a Bitcoin user, you become a global citizen, able to bank your wealth anywhere you have an internet connection. With Bitcoin, governments are beginning to treat their citizens like valued customers, so they will have to monopolize monopolized money. Bitcoin Conceives Thisin Bitcoin circles, a common phrase used to describe a multitude of issues is "Bitcoin Conceive."
Bitcoin solves this problem, was it? Wealth nearly unconfiscatable. In the entire history of the United States, it is estimated that 22% of the circulating US dollar was printed in 2020 — from 1776 to 2020, 22% of the money was printed in a single year.
“Stocks only go up.” — Dave Portnoy, Barstool Sports
The skinny: Our markets are not free or even close to it, and they haven’t been for some time. Using Bitcoin, we verify the financial system, which ensures its regulations are enforced. Bitcoin is inherently divisible. Sats, or sats, are the units on one bitcoin by which users pay.
“I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop.”— F.A. Hayek
We have reason to remain optimistic: Bitcoin is the sly roundabout way.
Money As A Tool Of Control: Censorship
“This is a world where you have billions of people whose bank accounts can potentially be frozen based on their opinions or ideas.” - Alex Gladstein
Cash has served as a primary means of peer-to-peer economic exchange for decades. You boomers will find it easier to run this software with time, so don’t worry. All I can say for my boomers is love. Bitcoin is yours to take wherever you go. With Bitcoin, you can transfer your wealth anywhere in the world by carrying a thumb drive or a memorized phrase of words. Bitcoin is censorship- and confiscation-resistant.
It has become very evident that the vast majority of transactions taking place are now digital, either through cards or web-based applications, with all of these digital applications of money being controlled by a central authority. If you use Bitcoin to send money to someone, no one can stop that from happening. By using this solution, cross-border commerce can be carried out with little friction and low latency. Bitcoin's a programmable currency.
Unlike other databases, Due to this lack of fungibility, the buyer and seller had to resort to negotiations regarding the price of the seashell in question, which made pricing difficult. After the latest election, shouldn't everybody support an immutable database no one can either manipulate or be accused of manipulating? No more accusation with no more defense.
Neither is Bitcoin data susceptible to theft. Many databases are digital “etch a sketch”, Bitcoin is digital amber. Bitcoin will be voted on someday. Bitcoin is a global currency.
Bitcoin is trying to solve some of humanity’s big challenges (whether we know it or not), so join the cause. Those who access the internet know that this is uncontrollable.
Bitcoin is a censorship-resistant technology that enables human rights globally. Anyone with an internet connection can use Bitcoin. If you would like more information about Bitcoin, I may suggest you visit this website.I wish to thank Andreas Antonopoulous, Dan Held, and the United States Federal Reserve for making it easy to dunk. The post created by John Paul Klaboe.
Opinions expressed on this website do not necessarily reflect the views of BTC, Inc. or Bitcoin Magazine. Monopolies in industry stifle innovation and crush consumers. Understanding the implications of a paradigm changing technology requires intimate understanding of the problem it attempts to solve. In order to determine whether a solution is suitable, it is always important to understand the problem at a granular level. For many, Bitcoin has been obtuse for lack of understanding; if you consider yourself one of those people, don't be hard on yourself — very few really do. Here we intend to teach the novice learner how money works in our society today.
Understanding the problem leads to a solution that's obvious. This
A common phrase in Bitcoin circles you’ll often hear is “Understanding the problem leads to a solution that's obvious. this,” which is applied to a myriad of issues. It is not only that people fear change, but more so, we have grown accustomed to our environment, and can’t see what is broken when it has been all we have ever known.
A person's motivations and purpose may change the meaning of Bitcoin incredibly greatly, and there are almost infinite possibilities for use. From a worldview like this, Bitcoin excels in three key economic applications: finite and programmatic issuance of the money supply — with no risk of devaluation (inflation) — your wealth is safe and secure.
Wealth nearly unconfiscatable. Globally, more than 4.2 billion people live under oppressive regimes and dictatorships that strip citizens of wealth, either through coercion or through force — these citizens only have the option to leave if their bank accounts are frozen. Cash on the side of free speech. Autoritarians utilize banking and money around the world as a main means of silencing opposition through freezing accounts and prohibiting funds. Those who must fund opposition can perpetrate atrocities that fall on their citizenry at a drastic imbalance of power, resulting in drastic imbalances of power. I see these three applications as crucial to Bitcoin’s success. The subsequent applications I see coming are icing on the proverbial cake.
The use cases presented by these three use cases are often seen as unimportant or “solution in search of a problem” by newcomers to Bitcoin. Because Western democracy can often be interpreted through the lens of Western culture. Most people find economics, central banking and money very boring. The majority of people are occupied raising families, advancing their careers, and making ends meet — we trust the experts who have these things figured out. There’s no time in our busy lives to dive into quantifiable easing, interest rate policy, Repo markets, the rationale behind negative yielding bonds, why economic inequality is so staggering, and why everything is “so damn expensive?”
The Bitcoin is an ideal solution to many of these issues; however, we can never fully appreciate its value until we understand the underlying problem it solves. Lincoln admonished, “If you give me six hours to cut a tree down, the first four hours I will spend sharpening the axe.” It is just as important to sharpen the axe to cut down the tree as understanding the problem to reach Bitcoin enlightenment is crucial to this practice. Time to sharpen our axes, let’s work to understand the problem.Given the massive improvements in computing, engineering, automation, and manufacturing in the last 30 years, shouldn't everything become less expensive, rather than more expensive? The truth is that the wealth you accumulate in state-issued currency is losing its value every year.?There is no doubt that money is the most important tool in any society. This service essentially represents half of the transactions that take place in a society.
Even though we are constantly using money and how it affects our lives in many ways, we collectively do not have a clear understanding of why money is valuable. In other words, money should simply be a symbol of value that frees us from the rigors of bartering — or as a ledger of ownership.
The following are the characteristics of a stable and dependable monetary good:The worse news is that this devaluation is rapidly accelerating (losing value faster and faster).I will spare the reader the laborious burden of going through each of these characteristics in great detail; but rather, I will concentrate on the key deficiencies in our present monetary system and how Bitcoin addresses them. If you take possession of your private Bitcoin keys, no one can access that wealth unless you give them permission. Historically, money existed in various forms like beads, feathers, and other rare artifacts. The main reason these systems of money didn’t work well was because the monetary good was not fungible.
As an example of the lack of fungibility, seashells are commonly used in many cultures. Various seashells have very different sizes, shapes, and aesthetic appeals due to size, shape, and state. Due to this lack of fungibility, the buyer and seller had to resort to negotiations regarding the price of the seashell in question, which made pricing difficult. Also key, and perhaps the most critical, are scarcity and liquidity. The supply of rocks in the world is near unlimited, proving that no rational person would trade finite goods and services for infinite money. “One may refer to archaeological dig sites, in which mountain civilizations used seashells as currency because they are found near the coast, and coastal nations utilized quartz since it originates from the mountains.” Most databases are a computational “etch a sketch, Bitcoin is computational amber” (Szabo). An item's portability is how readily a monetary good is purchased throughout space.
Coins made of rare metal were instrumental in resolving many of the early financial problems. Silver and gold have provided reliable money for centuries and their track record is undeniable. Bitcoin is fighting to solve some of humanity’s biggest problems (whether everyone knows it or not) — join the fight.
“The internet is uncontrollable. And if the internet is uncontrollable, freedom will win. It’s as simple as that.” — Ai Weiwei, Chinese Dissident
For more resources on Bitcoin, I would urge you to visit this website.
I would like to thank Andreas Antonopoulous, Dan Held, WTF Happened in 1971, and the In some countries, in fact, 4.2 billion people live under oppressive authoritarian governments. Bitcoin is a technological solution that prevents censorship and allows people to exercise their human rights. for making it easy to dunk.
Today, bronze coins and silver coins in this series have a higher value than when gold and silver coins were first minted — gold and silver provide unmatched salability through time. Gold and silver transformed early economic systems, but they did not necessarily lead to their limitations. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.