Why will Bitcoin win?
This article is a thought-experiment and by no means fact.
For a long time, human beings have told themselves that if we can control something and bend its workings’ rules to our advantage, we would exploit it ethically (or not). By exploitation, we often enriched ourselves and never really thought about the consequences of doing it. This is a repeating pattern of mistakes done over and over again, and even history books tell the same story.
The human life cycle is relatively short.
The problem with that is that new generations have not experienced the hardships of their elderly relatives; therefore, we are keen on making the same mistakes as our relatives because the system has been left to make these mistakes again. Monetary decisions have the same pattern. Keynesian decisions were made decades ago, their ideology was tailored to that time. However, we are still using this system in a time that needs different solutions. We are starting to realize that we should not mess with inflation since it is one of the most significant problems. Funny enough, we had to endure the Weimar Republic, Venezuela, and nearly all other currencies that do not exist anymore to still not realizing that human control over monetary systems cannot work. But here we are, still inflating our money as if we had not learned a single thing. Humans nowadays do not know how money based on commodities works, nor do they understand why human beings always chose the scarcest materials to use as their preferred payment method. Fiat currencies were used to avoid a recession and solve the problem of the divisibility of gold. They were left in place because monetary policies tend to stimulate economic growth in the short term, which seduced us into thinking that this kind of growth should be expected. But since money produced more by a button press does not match the picture of scarcity, I would argue that fiat currencies are about to share the same destiny as all the other inflationary currencies before them. Knowing all that, why should Bitcoin win in this case?
Bitcoin cannot be controlled by humans.
We value everything infinitely more that we can control than things that we cannot control. This makes sense. Who does not love their pet? We learned that we have more options to react to a situation that gets out of hand if we are in control. That is why you bring the leash while taking our dog outside. But this might be true for the dog, but certainly not with money. Once the need for inflation is stimulated, it will be hard to go back. New generations will not understand the normality of a monetary cycle because they are brought up under a flawed system designed to centralize value control. Moreover, can we not go back because once this psychology of “ah, we can print more if there is a problem” sets in, it is irreversible to think differently again. There will always be the more comfortable option of printing as demanded.
I am trying to suggest that Bitcoin is desirable and better than the fiat currency system because it cuts out one crucial and flawed error: us. Humans cannot change physics; therefore, we will never change how our car rolls or how planet earth pulls us toward it. Why should our monetary system be any different from that? Human control is only useful if we control metrics that have no chance of taking the upper hand on us. Money has controlled us since it exists. It is ridiculous to think that we can control money if money outlives humans. Everything humans’ control does not outlive humans. The dog does not get older than humans, gold, however, does, and we have no control over the metrics set by gold. Fiat currencies fit into the picture of not outliving a generation of human beings. With this logic, it does not sound desirable to know that some of the fiats currently available will disappear someday. Really makes me think if fiat currencies are a good store of value. Why should we choose to take a fiat currency as a payment even though gold has been around forever?
Now luckily, we do not have to use gold anymore. Gold is out to date because it is materialistic, hard to transport and divide. Ergo, we need a better solution. We need a currency that has the durability to outlive humans with metrics set to preserve or even increase its value in the long-term. Bitcoin brings all properties gold has (and even gets scarcer than gold with every Bitcoin halving to come) and replaces the human variable with mathematics. The human mistake will be cut out of the market, ending a streak of inability to handle money. Moreover, generations to come will be prevented from making all of our mistakes again. Bitcoin offers a currency free of entities to control your purchasing power and gives back naturalism to a market artificially kept on steroids for decades.
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Originally published at http://yvestalksbitcoin.com on January 22, 2021.