The international monetary system is facing one of the worst crises ever seen in the era of legal tender money, hence this might be a good time to invest in Bitcoin, but why?
The world’s fiat currencies are in crisis, crushed by the enormous weight of public debt and the trillions printed as a recovery fund.
Price inflation is an increasingly topical issue and is putting small and medium investors around the world at a crossroads: to continue to fuel a fraudulent system ready to burst or shelter themselves by investing in innovation and decentralization?
The oracle of Satoshi
We increasingly read the statement “invest in Bitcoin to protect against inflation” on various blogs or news portals about cryptocurrencies and blockchain.
If at first it could have been a simple thought of some crazy libertarian, now more than ever it is becoming a topic to be discussed and shared.
The arrival of the Coronavirus has opened the doors and paved the way for further intervention by central banks and institutions, drastically accelerating towards unprecedented organized chaos.
The management of the pandemic and the river of money poured into the United States and other countries are only distorting the prices of many markets, creating a fake recovery that as usual helps those who are closest to the printers. While China, the US and other states are blaming each other in search of a scapegoat, the world economy is preparing to increase its money supply well beyond the subprime mortgage bailout.
Bitcoin and the halving
At a time when the increase in the monetary supply is on the headlines of all the news, worshipped as the only action required to save us from this situation, the Bitcoin protocol cuts the issuance of BTC in half for the third time since its birth, completing the long-awaited halving.
Born in 2009 in conjunction with the economic crisis, Satoshi Nakamoto’s protocol seems to be more than ever an oracle, smoothly executing the instructions written in the code. The 630,000th block was credited to the bitcoin creator, with the message: “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue”.
The title, taken from the New York Times, is a reference to the first mined block of the protocol and the FED’s reaction to the economic crisis that awaits us in the coming years. Fun facts aside, after about 12 years since the birth of Bitcoin there is now the question whether this protocol is actually mature and ready for the general public.
Bitcoin and individual freedom
With the recent halving, the growth of Bitcoin’s monetary supply changes and does so significantly. With the third halving, in fact, the monetary inflation goes from 3.6% per year to 1.8%, making the virtual currency an increasingly rare asset.
Bitcoin therefore keeps its promise, continues to exist and proves to be the first true example of a scarce, non-duplicable and finite digital asset in the history of mankind. The number one cryptocurrency in the world is indirectly proving what are the characteristics of sound money and how we can use it to create a more solid economy focused on human action.
Bitcoin is portable, durable, divisible, fungible: all features that the cryptocurrency has in common with fiat currencies. The real difference that distinguishes the sound digital currency from the corrupt one is that it is a store of value, which is fundamental for the prosperity of populations. The store of value in a currency is the quality that makes it valuable over time, allowing for savings, investments and individual freedom in deciding what is best to do with one’s money.
This freedom translates into lower time preference, curbs human impulses and creates a future-oriented perspective. What we are experiencing with fiat currencies is nothing more than an organized depletion of purchasing power, pushing us to seek momentary gratification rather than the accumulation of capital that in 10 years time will be worth half of the nominal power.
And if you think Bitcoin is just that, well, you are wrong. In recent years an insurgent demand has come from troubled countries like Venezuela, Iran, Nigeria, Ghana and South Africa. These countries are exploiting some of Bitcoin’s characteristics to survive censorship by governments and global financial institutions. The possibility of not having to ask anyone’s permission to exchange money and of being able to do so quickly and easily is creating communities that are increasingly large and convinced of the revolutionary power of this protocol.
Many of the people who adhere to this revolution are the so-called unbanked, i.e. those who do not have the possibility to have a bank account and to be involved in the world economy. Bitcoin is therefore not just a speculative asset, it is not its price and it is not just an experiment.
It is a liberating tool, it is a protocol that has initiated an epochal change: from the individual working for the economy to the economy working for the individual, from centralization to decentralization, from the sale of our data to their possession.
Bitcoin places us at the centre of the system, it makes us responsible for owning our assets, indirectly revealing to us the errors committed and never exposed. It is time for us to open our eyes, to distance ourselves from our prejudices and to understand why this protocol is the natural choice for a more prosperous future.
In conclusion, as the philosopher Nassim Nicholas Taleb says:
“Bitcoin gives us, the crowd, an insurance policy against an Orwellian future”.