Bitcoin and the cryptographic explosion that followed have made an experimental reality out of the best (and worst) aspects of monetary theory, which previously could only be dreamed about in academic circles. While there continues to be debate over the nature and best structure of money, with cryptocurrencies it is possible to build and test these live, without permission, and see if they thrive (or fail) on a global scale.
Three reasons why we are IN LOVE with Bitcoin and the crypto landscape:
The immense possibilities of innovation at the edges of a global, permissionless network of value transfer
The creation of peer-to-peer, fungible, digital units of bearer value—in other words: Electronic Cash—to replace physical cash which is diminishing in importance across the globe
To supplement, protect from, and ultimately replace fiat money issued by governments that suffer from inevitable, ruinous devaluation and cause systemic economic boom and bust cycles
On that second point, please see the new Coin Center paper on the necessity of electronic cash in a free society. To better understand the last point, please read the Understanding Bitcoin booklet written by Silas Barta and Robert P. Murphy (especially chapters II, V, & VI). Those interested may also pursue the more advanced How is Fiat Money Possible? essay from Hans-Hermann Hoppe, published in 1994. While the latter was written well before Bitcoin or crypto, the overall presentation against fiat money and fractional-reserve banking is very much foundational to understanding Bitcoin’s relevance.
Tagged: Andreas Antonopoulos, Why Bitcoin Matters, sound money, Hans-Hermann Hoppe, Robert Murphy, Silas Barta, fractional reserve banking, Coin Center, electronic cash, fiat money, central banking
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