Bitcoin is complex. Anyone who has already dipped a little deeper into the rabbit hole knows how many areas of daily life BTC questions.
From scarcity to the power of ideas: Here are five things Bitcoin has taught us.
1. real scarcity can only exist in the digital realm
The scarcity of goods is the most fundamental premise in economics. If there were enough of everything, we would not have to worry about a fair and efficient distribution of resources.
This applies in particular to funds. Who would be prepared to exchange valuable life time for a commodity that exists "like sand on the sea"?
Historical funds could only maintain their function as value stores and means of exchange as long as their users believed in their rarity. Gold has been an established store of value for thousands of years simply because there has hardly been a single period during which the circulating quantity has been significantly watered down - this creates confidence. But even the most established store of value of all time can change quickly. Nobody knows how many tons of gold actually lie dormant beneath the earth's surface. And what if one day asteroid mining becomes reality?
The nice thing about Bitcoin is that all rules in the open source code are transparent. Anyone can verify that the restriction to 21 million units is one of the fundamental rules of the network.
2. money is a collective illusion
"Bitcoin is not covered by anything and will therefore fail." This or something similar is a frequently reproduced accusation against the crypto currency No. 1. Mario Draghi, Chief Economist of the European Central Bank (ECB), summarised the central bank's attitude towards Bitcoin & Co. as follows:
The quote reveals an almost cynical confidence in government currencies. For currencies are simply collective belief systems. One only accepts money if one assumes that everyone else will accept the same money.
Although state laws generally provide for a certain advantage for national - or in the case of the euro pan-European - currencies, the fact is that they are not a guarantee of the same money. But insurance against hyperinflation or the failure of currencies does not offer any law of the world. That is why the average life of fiat currencies is just 27 years.
The euro can also fail. Ultimately, the market will decide which currency system more people trust.
3. money can be anything
Since childhood we have associated paper notes and metal coins with money. But when it came to the choice of money, humanity has been quite creative so far: shells, precious metals, even huge, completely immovable circular stones have served as money throughout history.
- The Rai stones also served as money on the Yap Islands of the Ulithi Atoll. The inhabitants transferred the value by entering the ownership into a cash book - very similar to Bitcoin.
- Most of the time, it was just as long until someone found out how to water down the circulation and enrich themselves with an exorbitant production of money at the expense of everyone else.
- Bitcoin is the attempt to best simulate all the properties that are necessary for good money: The scarcity, divisibility, inflation resistance, censorship resistance, to name just a few of the advantages Bitcoin has over traditional fiat currencies.
As we currently see, money can be anything - including computer code on a global network.
4 Bitcoin is a peaceful revolution
As Bitcoin Researcher @dergigi points out in a post on his own blog, Bitcoin is an attempt to question the status quo in a peaceful way. The crypto currency no. 1 is optimized to question the state monopoly on money creation - and all associated negative externalities - in a completely non-violent way.
Or to put it another way: Bitcoin was created for the purpose of separating state and money.
5. ideas are powerful
Bitcoin's an idea, that's all. The idea of setting up a decentralized system in which all network participants can check all rules that apply in this system at any time. Everyone is free to contribute their own ideas; the code is open source and all participants have the same rights.
As a result, progress is slower than with centralized systems. On the other hand, it can be assumed that updates are supported by a large majority of the participants.
Furthermore, BTC will hardly be banned in democratic states. Because ideas are subject to freedom of expression guaranteed by fundamental rights. The Bitcoin ecosystem moves exclusively on the basis of text: the white paper is written in English and is therefore almost impossible to read.