Why is Bitcoin So Important?

Why is Bitcoin So Important?

Every human creates value in work and gets paid in dollars for the value that she or he is generating. Once we get our income, in fiat, we either spend it or have to invest it because saving the money becomes losing value over the long-term due to inflation. Each dollar that an individual is holding today will not have the same worth after 10 years.

If you don't have sufficient knowledge in investing or don't want to risk the dollars you own, you have no option but to simply lose the purchasing power you have now. This creates a situation where an individual can't store their hard work or value for the future.

The fundamental reason the situation exists in this way is that the supply of the dollar is monopolized by the Federal Reserve of the United State. When the Federal Reserve has control over dollars and issuance, the benefit of the system goes to the people that are always the ones that are closer to the government, such as the people who can lobby. This is the reason there is an active need for the "Denationalization of Money" as Friedrich Hayek put it in the 1970s after Richard Nixon took the dollar from the gold standard to complete the free-floating fiat currency.

In 2008, after a massive bailout by the United States government to the banks which acted recklessly in order to increase profits, everybody started talking about the role of banks and debt. At the same time, A white paper is released with the title "Bitcoin: A Peer-to-Peer Electronic Cash System." It was revolutionary in its time. It planned the method and design for a digital currency free of control from any centralized organization or government. The author, Satoshi Nakamoto, wrote in the white paper "the root problem with conventional currencies is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

Bitcoin creates a system where nobody can control the circulation of money or assets, and nobody needs to trust anyone for bitcoin to function. Bitcoin is a peer-to-peer trustless decentralized asset and is strongly resistant to corruption or censorship due to the nature it was created in. Bitcoin runs on an open source and verifiable network. If you trust in the logic of programming and computers, that is all the trust you need to facilitate the use of bitcoin.

Bitcoin went on to get massive adoption across the world while the world recognized its value and importance. Now, we are in a time when countries and institutions are using bitcoin. With Bitcoin, you can store your value and pass it on to the generations in a pseudonymous way.

Bitcoin is parallel to digital gold, in fact, it is more valuable than gold. Bitcoin is not easily seized the way gold can be. The transfer of gold between people in different countries is very costly. The security of gold is even costlier. Bitcoin transfer is much cheaper and security is even cheaper. Bitcoin solves the problems that Gold has in its very nature.  

The excessive need for an immutable store-of-value clearly opens the door for bitcoin use worldwide. The need for uncontrolled currency opens the door for bitcoin adoption across the world. As of now, Bitcoin adoption is far lower than its potential adoption and the opportunity with Bitcoin is enormous.