It is important to understand what characteristics make money good money so that we can realize the value of Bitcoin. It was in late 2008, a few months after the start of the last major economic crisis, that a cybernaut, under the pseudonym of Satoshi Nakamoto, published an article online describing the operation of an innovative system for issuing and transferring virtual currencies. That day the world got to know Bitcoin, the first of the cryptocurrencies.
When a major innovation comes along, it is in its nature to break with the status quo, imposing a change on the beliefs and customs of the people and organizations involved, as well as an adaptation to new ends and means. Any change tends to be fought with resistance, even when carrying something better, especially with interests at stake.
In Bitcoin’s case, innovation is a new form of money where the status quo that is intended to be broken down is the entire existing financial system worldwide. The interests at stake are immense. Only something with Bitcoin-like characteristics would be able to stand up to such a Goliath, using ingenuity and skill to counter a much larger opponent.
We believe in the future of Bitcoin and we want to present you its advantages to the vital essence of modern financial systems, fiduciary money. It is understood that I use the term Bitcoin in a broad way, referring to any blockchain technology that has equivalent features to it.
Over time, various forms of money were created, some replacing others. However, there were certain forms of money that had characteristics that made them better than others. Gold has special features that make it a good form of money, which is why it has remained a form of money for millennia. It is important to understand what characteristics make money good money so that we can realize the value of Bitcoin.
Bitcoin isn’t limited in nature. It is predictable, we know how many Bitcoins there will be tomorrow, next year, the next decades and within a century. The last fraction will be issued in 2140.
In contrast, fiduciary money, using the euro as an example, is issued to the hundreds of billions every year, an activity known as inflation or currency devaluation. Its issuance is planned by the European Central Bank, varying according to the political and economic context, and it is not possible to predict its issuance accurately or limit its quantity. For every new euro issued, all existing euros lose value.
Bitcoin is unfalsifiable. Each Bitcoin is unique and can’t be changed. The same cannot be said of fiduciary money, or even gold, which can be diluted with tungsten. This is the biggest invention at Bitcoin and the least well understood.
Like fiduciary money, Bitcoin is divisible, but each unit can be divided into one hundred million shares and there are plans to increase this number. This is virtually impossible with gold and diamonds. Unlike fiduciary money, it is extremely durable. Each is digitally stored by thousands of computers around the world.
Finally, Bitcoin is transferable anywhere in the world, almost instantly, with no one to stop it. This is completely different from any other form of money. International transfers may take several days, and in certain extreme cases may even be prevented and money confiscated. A Bitcoin is incorporeal and unstoppable and as fast as the internet.
All these features make Bitcoin the phoenix of the money. These are characteristics of supreme money, which we are only now beginning to understand. It is an invention that promises prosperity for humanity in the future and cryptocurrencies are growing faster than a horse racing in the Kentucky Derby races. There are ways that it can be used which are still beyond our imagination.
Written by: João Santos and published by Alison Jones Authors info is ours.