We Never See Nothing

Bitcoin is not replicating gold, it is replicating fiat.

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A lot of people bash fiat and claim it is a horrible form of money. Yet we all use it in our day to day life and measure the value of Bitcoin/gold in it. If fiat was so horrible, why do we use it? And if gold is so great, why don’t we use it?

Fiat has great propeties, it has a massive infrastructure backing it, it is relatively easy to send, carry and accept it. These propeties are great in a world based on globalisation and efficiency. Fiat currencies are also a very liquid asset, making it easy to exchange large amounts of value in it.

However, fiat has one critical flaw, it is owned by centralised governments. Non of the money you hold in your bank is owned by you, the goverment can take it at any moment. Governments also use their power to devalue the currency, that way slowly stealing away your wealth.

Money should be democratic and fair, in a civlised society the government shouldn’t steal from its citizens.

Fiat is a great medium of exchange, but the money isn’t fair and democratic. Yet we are forced to use it as our society is build on it. We rely on its infrastructure to furfill our way of life.

Gold on the other hand is fair and scarce, however, it does not have any infrastructure baking it, nor does is it easy to accept and pay with it. This is why the gold standard got introduced, however, the gold standard failed due the exact same reason our current monitary system is failing, greedy centralised power.

Gold itself is a great store of value, but not a great medium of exchange. For this reason nobody uses gold as a medium of exchange.

Bitcoin on the other hand is far superior to both fiat and gold as a form of money. It has all the great propeties of fiat while taking away the government and centralised institutions. Bitcoin is also faster and saver as a medium of exchange. Blockchain techonolgy is already on the verge of becoming our main payment infrastructure.

I watched the debate today with Erik Voorhees and Peter Schiff today. Erik Voorhees called fiat bad money, peter schiff called Gold “Good” money. I believe both statements are false. Fiat is great money with a critical flaw, gold is bad money as it cannot be utalized as a form of payment in our current society, even with a gold standard was reintroduced, it would still have the same critical flaw as unbacked fiat. This does not fix the root of the problem.

Bitcoin replicates the good propeties of fiat, while fixing the critical flaw of centralisation. Bitcoin is also quicker and saver as fiat. And because its world wide it will soon be the most liquid asset making it ideal for a medium of exchange. Bitcoin will transfer our society into a more democratic and fair society.