Bitcoin is the newest technology to serve the function of money. Like gold, Bitcoin is an ideal store of value but has several major advantages over gold.
What makes Bitcoin the new gold? Like gold – and even more so – Bitcoin is a scarce resource, it is extremely difficult to increase the supply of new bitcoin and there is a hard limit to the total supply of bitcoin available for ‘mining’. That limit is 21 Million bitcoin – no more. A mechanism of a steadily decreasing flow of new money means that bitcoin is sound, hard and deflationary money by design. In contrast, other forms of money such as government issued banknotes are inflationary. That’s because national banks can simply increase the supply of banknotes, often referred to as quantitative easing. That makes government issued banknotes ‘Easy Money’.
The long history of money – from the beginnings when seashells, beats and Rai stones were used as mediums of exchange – has taught us that that anything successfully and sustainably used as money has some natural or artificial mechanism that restricts the new flow of the good into the market. History also taught us that gold has been the only medium of exchange surviving and thriving through the centuries. Gold has served its purpose as a store of value very well for several centuries. That is, until now. Bitcoin and other digital currencies are filling the spaces where owning physical gold falls short. Owning Bitcoin has two major advantages over owning physical gold:
Portability: Bitcoin lives everywhere and nowhere because of its decentralized Blockchain. Using a software wallet on a smartphone makes your bitcoin accessible from anywhere in the world.
Divisibility: Bitcoin can be divided into fractions of one unit, which can be as small as a value at the 8th decimal (the so-called Satoshi).
The rich get richer, the poor get poorer. This statement has never been more true than during these times. Bitcoin and digital assets pose a unique opportunity to redistribute the wealth accumulated by a few individuals and the time is now to act.
Stay safe, stay private!
The BKK Sledgehammer Messiah