Escape Inflation's Grip: Bitcoin, the Unbreakable Money System
Ditch the leaky bucket of traditional government-controlled finance. Discover Bitcoin, a secure & empowering alternative built on sound technology.
Inflation is like sucking the energy out of the economy. Inflation, caused by a reckless government, steals your buying power year after year. So let’s look beyond the surface of Bitcoin, this emerging technology, recognizing Bitcoin’s unique capacity to reshape the future of finance. Bitcoin is unlike any other cryptocurrency, unlike any fiat currency. Bitcoin is unique and secure, unlike anything we have seen before.
What is Bitcoin? Bitcoin is the first engineered monetary system in the history of the human race. Backing up a bit, we must first ask what is money. Well, an economy consists of goods, services, and property. For example, I want a product that I want you to manufacture for me, or I want to buy a house, or I want to buy some land. That's half the economy. Let’s say we settle on a price of 37 horses or $37,000 in exchange for the product, the house, or the land. Now the question is, how do I send 37 horses or $37,000 to you? And then how do we keep the books balanced so we have a legal record of the transaction.
Money is social and economic energy, it's the energy, the energy that we'll use to trade with. If I can send you 10 bushels of corn and you can send me money equal to 10 bushels of corn, then we can trade with each other. Throughout the history of the world, humans have used a variety of items as money from cowry seashells to livestock to gold coins. Humans have used copper points, silver coins, and stone coins. These are all types of money. Eventually, we settled on gold and gold coins as money. But gold was never fast enough. It's money.
How do you move 10 tons of gold from here to there? So ultimately, people used ledgers, and those ledgers were issued by a merchant or they're issued by governments; ledgers have been used by emperors going back 5000 years, and you can find Sumerian tablets in clay where they've etched in like 37 bushels of outset return for something. These were ledgers of transactions and ledgers of tabulating one’s wealth and debts. So money is that shared ledger of who owes what to whom. And, at all times, the money is a token or a glass bead or a bushel of corn. But the problem with the glass beads is the Europeans showed up and manufactured a million glass beads, the Europeans dumped glass beads on the Africans, the Africans lost their homes and their livestock and all their wealth and they became impoverished.
So the problem with money is how do we keep track and maintain a fair distribution of who owns a claim to whom, and what if there was $100 million worth of capital in an economy of products and property? You'd have to have $100 million dollars of money. If I issue $100 million of currency, it equals all the stuff in that economy. Now if I started to inflate the currency and I issued another $10 million, I'd take 10% of the economy and give it to my friend. That's the inflation rate. If I keep inflating the currency, if I double the amount of currency, but the amount of stuff in the economy remains constant, then the price of everything that's scarce and desirable doubles. If it's not scarce and desirable, it won't go up. But if there are 100 things and there's 10 times as much money it stands to reason things cost 10 times as much. So the problem is inflation because, in the history of the world, we have had inflation. After all, governments always inflate the currency -- always.
The Romans created gold coins, they started with a certain amount of gold, but to finance their growing empire, they inflated the amount of gold and inflated the amount of silver until they cut it to a small enough level that no one would take the coin anymore, so the mercenaries didn't want the coin, and when they could not pay the mercenaries, the Empire toppled. So, the problem is inflation.
Inflation is a phenomenon whereby a government authority prints more currency. They want to print more currency because if I want to spend a trillion dollars on government services, I either have to tax you a trillion dollars or I have to print a trillion dollars in money. Turns out that it's a lot easier to print money than it is to tax people and so it's either inflation or taxation throughout the history of the world. Every single coinage system, every monetary system ever established, collapsed because of inflation. Look at every king of England. If you just look back, you'll find every one of their currencies started by issuing a coin with X much gold in it, and then over time, that coin will contain less and less gold, and then they go to less valuable silver and then they go to copper, and then the coin is coated with some brass or some nickel, meanwhile, they are debasing their currency, right under the noses of their subjects. So the problem is inflation.
Money is energy. The problem is inflation. Someone much smarter than me made this metaphor about inflation: say you've got 10 pints of blood in your body. When you go to donate blood they take a pint out. When they take a pint of blood out of your body, you lose the red blood platelets, anybody with any common sense knows, that if you run the Boston Marathon the next day you have a problem you can't perform as an athlete. It takes about four to six weeks to replace the red blood cells. So when I take a pint of blood out of my body then I am not going to be able to perform well for a month or two, probably two months later. Now, imagine if I donated a pint of my blood every month, forever. That's inflation.
So let’s say, I'm running an economy. I'm the king. You have a dojo and I send someone from the government and we just take a pint of blood from every one of your fighters. And then next month we do it again. And next month we do it again. And next month we do it again. Not another metaphor, but the currency is to the economy. What your blood is to your body, and economic energy or money is to the currency. Eventually, your fighters will not be able to fight and the currency has lost its ability to buy what is once could.
The US Dollar is currently the world's reserve currency. The US Dollar is expanding. It was expanding 10% a decade, and now it has been expanding 14% to 34% over the past 24 months. The dollar is weakening. The point of Bitcoin is to fix the money. And money is energy and energy is life. And if we keep sucking the energy out of the economy, we’re sucking the oxygen out of our system, either. In the best case scenario, we perform poorly and under the worst case, you suffocate to death or freeze to death. That's the problem. That's why empires collapse. That's why economies collapse. And the problem is not just a problem for an individual. It's not just a problem for a family. It's a problem for every institution and every company. It's a problem for every city, every municipality, every government, every civilization, they all have this problem. And you can generally trace the problem to the fact that we could not afford to fight to defend ourselves as a nation because we could no longer afford to pay our people for our defense. You can only print so much money before it becomes worthless. If you declare war on COVID or declare war on Iran or whoever/whatever, these wars cost money. History is full of wars. If we fight them with taxes, then eventually the population will say no more. We don't pay the tax. If we fight them by inflating the currency by printing more out of thin air, then we go a few years before people realize that eventually, the currency will collapse.
So money is essential to civilization. The problem is inflation and why does it happen? It's a natural human condition because as you have an authority (government) that controls the money, the temptation and pressure to inflate the money supply is omnipresent and inescapable. And every civilization has suffered from it at one point in time.
So, now back to what is Bitcoin? In 2008, what happened is, that a set of engineers, nameless engineers (Satoshi Nakamoto), recoiled in horror after the great financial crisis with all the bank bailouts, and they looked and said, this just isn't fair. It isn't right. They wanted to create a better form of money and they used two technologies, they use the internet and cryptography. The idea is to decentralize the money via thousands and eventually millions of computers around the world. The idea is to cryptographically sign something so that it cannot be tampered with, by anyone, friend or foe. And using those two technologies, they conceptualized the idea of an immutable ledger. If you will, a bank in cyberspace. What if 100 people got together? 100 people with money got together and they said we're going to create a bank in cyberspace. And we want to put our money there and we don't trust each other. We don't trust the government. We don't trust any corporation. We don't trust any one computer. So they created a program that keeps track of a ledger of 21 million coins, or shares in the “bank” divided divisible by 100 million called us down to one Satoshi. So 2.1 quadrillion Satoshis you can't make any more. They could store it for 1000 years. 10,000 years. A million years. So they created the idea of Bitcoin. It's an asset that's protected by cryptography and it's stored on a public ledger, the software administrators the ledger. The twist is we distribute the software on 1000s and 1000s of separate computers. Every Bitcoin node is running a copy of the ledger. So everybody in the world that has their money in the bank, has a copy of all of the money in the bank and all the transactions since the beginning of Bitcoin. So it's an immutable truth. Every 10 minutes the system takes a batch of a set of transactions and then distributes the money based upon the instructions of the owners; so if I want to send you my Bitcoin, I send it and it goes to you, and every single computer on the network updates that transaction, and they all check it cryptographically using modern encryption.
Now, how do we defend the network? Three nodes of interest make Bitcoin compelling. The first node is that Bitcoin keeps track of that ledger, it's the most secure database in the world. And it's a database of immutable truth due to its vast decentralization. It's the ledger of money. The second node is a miner. Its job is to encrypt the generating hash functions. To protect the network there are millions of them. And they're all competing with each other to build the next block. With only one out of 2 million involved in this network. It's like every miner gives you a lottery ticket. One of the 2 million will get to build the next block and will get paid for helping compute the transactions, and you don't know which one block at any given time. So the miners are a wall of encrypted energy. They're converting electricity into hashes and then inside that wall of electricity or a wall of energy is the Bitcoin public ledger. Which is distributed in a decentralized fashion. And there's one other transaction node, called lightning. This is a multi-layer decentralized monetary system. Lightning is decentralized payments, it moves small amounts of Bitcoin at the speed of light programmatically, almost for free.
So Bitcoin is decentralized. It's a decentralized uncorruptable software. The brilliance of Bitcoin is it's a “bank” in cyberspace that nobody controls. Nobody and no government can corrupt it. It’s a bank run by incorruptible software offering a global, affordable, simple, secure “savings account” for everybody on Earth who has neither the means nor the inclination to run their own hedge fund. You have some money, you have life savings, and you don't want to lose it. Why put it in a traditional bank? Bitcoin is a much better “bank” in cyberspace. Bitcoin is gradually de-monetizing other assets. The idea is to return rationality, to make things more rational.
If people started buying Bitcoin, instead of buying investment property, people would realize Bitcoin is much safer than gambling on the next product release of Apple versus Google whether Amazon will get unionized, and whether this pipeline or that pipeline is going to get approved. With Bitcoin, all you're buying is your going 1:21 millionth of the monetary energy in the network forever. And that's the product and it's a very simple product that should last for 10,000 years. We didn't have it for 1000 years, right? We've never had it before. Is this thought that we finally found something true and beautiful with integrity that gives us control of our lives back in a world where we feel like we've lost control? The politicians have lost control of the circumstances, continually printing more money to keep up with their spending, and everyone's looking for some way, something they can believe in. Money that's truly theirs.
More people need to learn and have a deep understanding of Bitcoin’s potential to reshape our financial landscape since much of its commitment to driving change through technology is both inspiring and secure.
