Bitcoin as Pristine Collateral?
Many things can be used as collateral, like gold, houses, cars, jewelry, cash, future paychecks, US Treasuries, etc...
Pristine Collateral was reserved for gold & US Treasuries but that was before Bitcoin. Gold, we called pristine because we “believe” we know how much gold is on the planet. But do we really?
You could be digging in your backyard and find 10 pounds of gold. Yes, it won’t move the market but it’s 10 pounds that the investing community didn’t know existed.
Plus astronomers tell us there’s asteroids made of gold. I don’t know if that’s true but who am I to doubt today’s astronomers. How pristine is gold at that point?
Cash & Treasuries were considered pristine before the financial crisis of 2008 & the virus of 2020.
But with the Federal Reserve Chairman saying that money can be printed at will, that it’s endless and with an interest rate policy of near zero percent how pristine does Cash & Treasuries seem now?
Did you know that the US Treasury has printed 21% of all cash in existence in 2020? The US is 244 years old and we printed 21% of all dollars in just 1 year. Pristine? I don’t think so!
Now let’s take a look at Bitcoin. Only 21 million will ever be created, nobody can order to create more, it’s set in stone through a math, through an algorithm.
It has a very secure network, one that is decentralized by thousands of nodes and miners. It’s network has grown to a point that an attack to control the network is now nearly impossible. The network continues to grow every 10 minutes.
Its currency, Bitcoin, can be used as collateral in an unlimited number of scenarios.
Bitcoin is truly scarce, can be sent over numerous networks like Ethereum and Tron allowing for faster and cheaper transactions than its own blockchain. It can be stored on its blockchain for ultimate safety until its owner decides to spend it or use it as collateral. Loans can be given or taken out in Bitcoin through smart contracts. You literally become your own bank, benefiting from both sides of a loan with no third party counter risk.
Bitcoin is Pristine Collateral, NOTHING, not gold, not cash, not Treasuries, not jewelry, not houses, not cars, etc...comes close.
It’s the ultimate collateral, the ultimate form of money!
Nice