The strengths of Bitcoin vs. old currencies

So, people say Bitcoin (and Blockchain) is difficult to understand? Well, not if you compare it to our traditional monetary system.

The growth of the number of Bitcoins is foreseeable and limited. At the same time the Fed, the ECB, Bank of England and other central banks can print as much money as they want. And they do, on an unsound scale.

There is a well established procedure for mining Bitcoins. When it comes to the USD, EUR, GBP and other common currencies — they are created out of thin air by central and local banks in an endless debt loop.

The “value” of Bitcoins might be a bit volatile. At the same time old currencies are constantly sliding downhill, with inflation making peoples money and wages worth less. (Thus imposing a stealth tax on the people.) With the limited influx of new Bitcoins (and while being adopted by more and more people and business) their value should steadily increase.

Some argue that there is no underlying value of Bitcoin, but trust. The same can be said about all old currencies. For example, the USD left (what was left of) the coupling to gold in 1973. (Since then inflation has made things ten times more expensive, in absolute terms. During the same time the total money supply has increased 80 times.) And trust is much better upheld in the Blockchain than in banks computers and spreadsheets.

Talking about trust: Bitcoins cannot be controlled or manipulated by banks, central banks or governments. Given that traditional currencies in turmoil obviously results in banks being closed, caps on withdrawals and confiscation of bank deposits (like in Cyprus) — Bitcoins may in some situations be the only usable currency.

More and more people are realising that the old monetary system is questionable and possibly unsustainable. So, I would not be surprised if the Bitcoin Moment will arrive shortly.


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