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On Bitcoin

Bitcoin has been one of my favorite topics to think about past two years, because Bitcoin is more advanced form of Money what world has known before.

Short history of money goes like this:

We go from barter to commodity money, and from commodity money to Precious Metals and then tie those precious metals into a paper money. Then the tie to precious metals is broken and world has been full fiat currency since 1971 (if we don’t look some minor exceptions).

Fiat currencies are only based on the trust of the governments, so actually they are worse form than gold standard money. Sound money has three qualities 1. It is a medium of exchange 2. It is measure of value 3. It is store of value.

Free market has chosen gold over and over again as the money earlier, because of scarcity. Gold has had through it’s history about 2 % increase in it’s stock (also known as inflation).

Now although most of the world is in fiat-standard, there is a new alternative called Bitcoin. Bitcoin is a superior form of money to gold and to fiat, because it is scarce, digital and unstoppable (peer-to-peer).

What this will create for humanity is exciting. It has been just little over a decade of adoption and majority of people still are convinced that Bitcoin provides no value and that current system is just fine. Current system is dead, it just hasn’t been buried yet. And when that system fails, there are but a few options.

Thank god there is Bitcoin.



This post first appeared on Janne Piiroinen, please read the originial post: here

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