The Importance of Bitcoin.
Updated: Jun 29, 2020
We’re very much in a transitional period in time where more and more value is being created online in all sorts of digital forms.
The main issue we have during this transition is the friction caused by the on-ramps and off-ramps with our current legacy financial system. How do we pay for this digital value?
Will all forms of digital value stay online and only ever live & breath online. Without ever exiting out of the internet? Will we be able to hold our digital forms of value in the future with AR/VR component in our palm. Will we go to a retail store and purchase a CryptoKittie in its AR/VR form. That might be a topic for a different day.
But still how do we determine a digital form of value?
Is the stock of Twitter value determined because of its quarterly returns to its shareholders or does the true value stay with the people who run and maintain it and the community that lives there? Could the people who run and maintain it along with the community leave recreate another Twitter and be just as valuable?
People associate Bitcoin scarcity with Gold and from a marketing perspective this works extremely well. If this is true then Bitcoin is the reinvention of Gold native to the internet.
But as more and more digital forms of value start to appreciate and increasingly become scarce online how will the internet determine this value? Is it cash? or more fiat currencies? Do we leave that for the real world?
Is it Ethereum? Well over 75% of all digital assets of value online are appearing to show up on its platform? With more and more real world assets in the near future as well.
No, that is just a technological tool of its time (e.g. paper and pencil in the 1800’s, the personal computer in the 1900's)
Can we leave money to just being the foundational layer for everything else. Is this still true?
Since creation, Bitcoin has precisely a maximum supply of 21 million coins. As of writing, approximately 18 million bitcoins exist and new bitcoins are supplied at a rate of ~3.6% annually. Nearly every ten minutes, when miners process a new block, 6.25 new bitcoins are minted.
I think it requires a something truly organic in nature, frictionless, divisible and truly decentralized as currency. Something that is global and native to the internet.
Something like Bitcoin.