Bitcoin – The next Global currency?

Modern money history:

It was the year 1944, known for the Bretton woods agreement. The year when the US dollar was made an official global currency backed by Gold. By the end of WW2, the US had amassed such a staggering amount of net worth. Due to this, all the major countries around the world at that time made a pact to hedge their currency to the US dollar, for the same was hedged against Gold.

Later, In the year 1971, the then US President Mr. Nixon brought an end to the US dollar-based gold. Mr.Nixon made the US dollar free float without gold backing. Thus, instead of printing dollars based on gold reserves, the Fed (The central bank of the USA) started printing dollars without any limit.

Due to this, since the beginning of the 20th century to date, the dollar has lost over 96% of its value (most of it due to excess float of the dollar, which reduces the purchasing power of the dollar bill known as inflation). The more dollars to float, the more of its worth to reduce. The logic is the same be it any currency, especially if the same is not backed by an asset to control.

For thousands of years, we have used Gold & Silver as our currency. There were times when people had used a lot many other commodities such as seashells, live stocks as currency, for the same were governed by some governing agency be it the rulers or the town elders.

There are stories in history where people used seashells as currency and on a later day due to some events, the currency was termed illegal by the governing body. Thus the entire transaction is to be considered a punishable offense if done via seashell. People abide by this rule to stop trading over seashells. Thus, one who controls the monetary system controls the entire economy.

Any transaction made without the centralized currency would be termed illegal and a punishable offense. So, over the years no matter what we consider as currency, it had to be approved by some of the other governing institutions. Think of it, what gives the government the power over us? Why an individual has to abide by the rules and regulations set up by the government for if we don’t we will have to bear the consequence! What gives the government the power to control and rule over us? 

It’s the ability to control the money flow. The US probably has one of the largest printing presses in the history of mankind thus, the power to control the planet. And hence, the title “Superpower”.

Money represents value. The value we use to vouch for various goods and services. Throughout history, we have used a lot of commodities as money. Gold is a prominent one. More people accept an asset to be valuable and will in turn make it as money. Over the years, people have turned over to various types of commodities for money. Each had its fair share of advantages and disadvantages.

The new standard of money is decentralized. 

When we say decentralized. It’s the transfer of authority from the government to the people. An authority to create, manage and destroy the currency was at the whims and wishes of the government. Wherein, the government has exploited this boon to its extreme sense. Eroding the savings worth of millions of working individuals in the name of inflation. 

The millennials and the next generation are always on the lookout for freedom. And, freedom from the centralized currency system is what crypto technology stands for. Today, in the crypto world, Bitcoin & Ethereum has over 65% of the market share and is a leading cryptocurrency literally changing the world’s monetary system. Challenging the old and rigged banking system and competing with the worthless fiat-based US dollar at its core. Read more about the US dollar-based Stock market crash that’s here!

When we had Gold and silver as our transacting currency. There is an intrinsic risk of the same being stolen. Gold is difficult to carry around and couldn’t be used for transactions freely. Everyone knew the wealth you possess and the purchases you make. The money was very much apparent. It was too real and although served the purpose. It lacked the present generation’s need of being concealed and to maintain lowkey.

Then the government came and introduced paper money. We call it Fiat currency. Stating that it’s entirely worth every inch of gold or silver you own. Primarily, the dollar was based on gold reserves. Post elimination of gold standard. The free-floating US dollar and the rest of the currency around the world were only termed as transacting currency for we believed in our central banking system. Although it served the purpose of easy mobility. It failed to preserve the value.

We trust the government-provided money. The value for the same is based on its legal standpoint and is not based on any intrinsic value. In that logic, the entire world fiat-based currency system is literally worthless. It’s more like, we believe it has value and hence it does.

Excess printing of fiat currency has made the already floating currency lose its purchasing power. All that takes for the US Fed is to add a couple of more zeros into their system and we have a couple more trillions of dollars floating around making previously printed currency worth less than they used to.

In that sense, Bitcoin is more transparent than ever. We know exactly how many bitcoins have been mined and how many more to go. We know their price for its actively traded throughout the world. Although it’s at a speculative stage. The real worth of bitcoin can be seen post-mining of all its 21 million coins. Thus, the supply side of bitcoin is limited and when the demand increases. The worth of bitcoin will increase and experts see no visible end for it.

Bitcoin is a transparent currency system without any central authority (Decentralized). The transactions are transparent and are recorded as in block-chain.

Why Bitcoin?

1. Bitcoin has no middlemen, its transaction is way cheaper than any other source. It’s way cheaper to transact at much greater efficiency.
2. With bitcoin, one can get access and full control over his/her wealth. None can tamper with bitcoin as they had done with fiat-based currency. The worth of bitcoin is decided in the open market on the ‘demand and supply principle’.
3. Decentralized monetary system. The one that empowers common men and women. It’s mankind’s first step towards a free society.

To get more info on Bitcoin: Check out the article by the Bitcoin creator Mr. Satoshi Nakamoto – “Bitcoin: A Peer-to-Peer Electronic Cash System”. Satoshi Nakamoto is said to be the creator of Bitcoin. A revolutionized technology that’s gonna entirely change the banking sector. More power to free society!
I believe the gold-backed currency system is long stretched from reality. We will surely have a new currency system. The one that’s not going to erode the worth of an individual’s savings. The one that’s decentralized, transparent, and empowering. Although CryptoGold is still on the table. Only time can tell what the future lies ahead.

I believe one has to invest in an asset only when he/she finds value in it. Understand its true worth and buy at a discount. Valuing a company has been relatively easy for all it takes was to do the number-crunching and find a suitable story behind it.

I was never able to judge the value of Bitcoin. That’s where I went wrong. It’s an asset at such a stage wherein none can quote a price over it. It’s wrong for us to be speculative over its price. Instead one should look for the value of the technology behind crypto. As I always said, Crypto technology is the best we had since the beginning of this century and it took us a sweet amount of time to realize it.

Finally, Before investing in Bitcoin. Ask these three questions to yourself. 

Questions to ask:

Do you actually understand the concept of Crypto? And its impact on our economy. And then, Invest if and only if you are satisfied with your answer.

Are you ready to accept bitcoin? If yes, to what extent of your portfolio to be in crypto. Remember, Diversified asset allocation is the first step to wealth creation.

With COVID-based pandemic recession making all kinds of noise all around the world. One has to think not only of his/her personal health issues. But, also has to safeguard wealth. What kinds of steps have you taken to address the issue?

Which Cryptocurrency is the best to Invest in?

Disclaimer: All the information on this website is published in good faith and for general information purposes only.

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