Pragmatism is essential if the future is a concern of yours. Since the beginning of the "pandemic" caused by COVID-19, the Fed has printed the equivalent of over €10 trillion. And the ECB and other central banks around the world have also undertaken similar operations. As has always been the case, this enormous monetary inflation will cause economic hardship of unprecedented proportions.
Most people will suffer a lot of damage from the decisions made by that small minority who are currently in power and who don't even represent them. Faced with the current economic situation and enormous monetary inflation, you have to make choices in order to take care of your economic future.
If you don't take care of yourself, no one else will do it for you. Unfortunately, the school system has never taught you about the economic and financial aspects of daily life. Most people don't understand what money is, how it works and how to manage it in order to thrive. If we analyze all the possibilities on how to protect yourself from disproportionate monetary inflation you will see that Bitcoin, and in particular Bitcoin Cash, is the only choice that allows you to shelter your savings.
Fiat money is a bad investment
The main instinct of people is to deposit their money in a bank account, for two reasons: first of all, they will have access to a safety fund for events like the 2020 crisis; moreover, saving money in a deposit account seems the best way to protect one's wealth over time. This innate instinct, however, does not consider a fundamental parameter: inflation. This demonstrates the lack of understanding of how the current monetary and financial system works.
The dollar convertibility into gold was removed in 1971. Since then, fiat currencies have no longer been guaranteed by anything concrete. Central banks have total freedom to create new money and abuse this power. During the current crisis we could see the huge amounts of money printed by the ECB to support the European economy: over €2 trillion. Such a large increase in the availability of money has a consequence on one's savings held in fiat money. Purchasing power in euros is being eroded by this enormous monetary inflation. If you look carefully at the details, the purchasing power of the euro decreased by 42% between 1997 and 2020.
The worst thing is that this phenomenon is considered normal. Between 2010 and 2020, the euro lost 13% of its value. A person who owned €1000 in 2000 should have €1390 today to buy the same things. Not having that extra €390 means not being able to overcome the effects of monetary inflation.
By considering the huge monetary inflation of 2020, it would be a big mistake to keep your wealth in fiat money. It would be advisable to look for another method to safeguard it.
The stock market is artificially inflated
Most of the money produced by central banks is used to buy Treasury Bills and mortgage-based securities. Since the beginning of March 2020, the Federal Reserve's balance sheet has increased by more than $3,000 million. It means it has increased by more than 70% over this period, surpassing the $7 trillion mark for the first time in history.
The Federal Reserve is the largest securities manager today, surpassing even BlackRock. This is something incredible that no one could have even remotely imagined in early 2020.
The Fed's intervention resulted in a fast and impressive rebound in the equity markets. In order to have better returns, investors have moved from the bond market to the equity market.
In August 2020, the Dow Jones and the S&P 500 have reached again the levels before the crisis and many stocks are hitting new records, including Tesla and Apple.
Unfortunately, this rise in the stock market hides a much less happy situation: the real economy is in the midst of a recession.
All economic indicators are at their lowest levels. US GDP is heading towards a loss of between 6% and 10% y/y, the number of unemployed is reaching unprecedented levels and the US public debt will reach $30 trillion by the end of the year.
Many people don't see (or don't want to see) the objective situation. In the coming weeks/months there will be a correction, a return to reality and it could be a very hard blow for the general public. Investing in the hope of earning more than the money is devaluing during this period is a very high risk. It is a choice that should be avoided for a while.
Gold is a good store of value, but...
When it comes to store of value, most people think of gold, the precious metal that for centuries has proven itself up to the task. Gold has undeniable qualities as a store of value. The amount of gold available on earth is considered to have a limit. It is difficult to gauge exactly what it is, but gold scarcity is objective. It is very resistant to deterioration over time and it is impossible to create it from nothing or from other materials. Central banks cannot conjur it up by snapping their fingers as they do with fiat money. It is no coincidence that all governments have suppressed the convertibility of banknotes into gold (in 1914 in Italy under Vittorio Emanuele III, and in 1971 in the United States with Nixon). Since then, the dangers of owning fiat money that is no longer based on anything tangible have become increasingly evident. People were able to verify the dramatic consequences directly on their own wealth.
Despite its qualities as a store of value, gold still has some important disadvantages: first of all, it is difficult to transport and, for example, if you intend to change your country of residence and take your gold with you, customs represent a gravy problem. Furthermore, in almost all countries, in order to buy gold legally, it is necessary to use an intermediary. It is true that gold cannot be created by thin air, but it is very difficult to measure its purity. So many scammers try to fake it and it's impossible for ordinary people to recognize it. The fractionability of gold is another complex obstacle. It is very difficult to pay at the bar or at the supermarket by using gold.
For these reasons, gold is usually deposited in bank safes, exposing the owners to the risk of the choices made by the banks themselves or governments that may decide to confiscate the gold.
Any owner of gold must remember the decision taken by President Roosevelt who confiscated gold from American citizens in 1933. After that the price of gold was artificially forced to $35 per ounce. Preserving your wealth in gold is not without risk. Furthermore, the potential for gold to rise in value remains limited. Gold allows you to protect your wealth, but it cannot increase beyond certain limits.
How to get Bitcoin? A smartphone and a Internet connection are enough
No intermediaries are needed. Furthermore, bitcoins are divisible so you can get as little as €10 or less of Bitcoin if you wish.
The algorithm used for mining (Proof of Work) is what guarantees the value of Bitcoin. In practice, producing Bitcoin has an energy cost equal to the value of the bitcoins produced. The blockchain has been around for more than eleven years now and no one has ever managed to breach its security, and day by day it becomes increasingly difficult to do so. For this reason, when receiving Bitcoin, anyone can be sure that they are authentic.
The Bitcoin network is totally decentralized and has no owner. It is totally resistant to censorship. Nobody can stop anyone else from using Bitcoin. Furthermore, no one can confiscate Bitcoin. To ensure the safety of your Bitcoin, all you need is a good wallet of the non-custodial type, that is, you retain the full control over the private keys associated to your bitcoins. Melis Wallet is a great choice, it's free and one of the most complete and safe. From this moment on, you can be your own bank and have total control of your wealth. Bitcoin also has the advantage of using a "permissionless" and "trustless" blockchain. Anyone can become a node and mine blocks, anyone can explore the contents of the blockchain and view all the transactions that occurred in the past up to the creation of Bitcoin. Furthermore, transactions on the Bitcoin network are immutable and therefore you have an incorruptible system at your disposal.
Unlike gold, whose growth in value is clearly limited, Bitcoin has extremely high growth potential. Just look at the graphs of the evolution of its price over time.
Bitcoin has been the best investment for the past 10 years and most likely will be the best investment for the next 10 years. A rough idea of the growth potential you can expect in the coming months and years: just try to compare its capitalization with that of gold, stocks and other markets.
If Bitcoin Cash would reach the capitalization of gold, the price of a single Bitcoin would exceed €350,000. This should convince you of the benefits that make it the Number 1 Solution for protecting your wealth. With Bitcoin not only you save your assets over time, but you will increase their value.
There are various versions of Bitcoin, then which one to choose?
There are many versions of Bitcoin, and we'll address ourselves to the most relevant: Bitcoin Cash (BCH). For more information on the rest, we refer to a previous article.
When in 2014 Bitcoin began to be successful, the infiltration into the community of characters who initially didn't even believe that the protocol could work, led to the creation of a group that tried to prevent Bitcoin from being able to scale by making permanent the limit on block size (which originally was set up as a temporary precaution). Despite the great advantages of Bitcoin over gold, there is still a problem: the limited availability of the number of transactions makes it a very expensive system to manage. Having arisen the disagreement between the community that wanted a "crippled" Bitcoin and the one that instead intended to stick to the original provisions described by Satoshi Nakamoto in his project (White Paper), a "split of the blockchain" took place, an operation that gave rise to two versions of Bitcoin: Bitcoin Core (BTC) and Bitcoin Cash (BCH). To summarize, they both have the same main characteristics. The differences consist in the amount of manageable transactions: for BTC will never exceed 18 thousand per hour, while for Bitcoin Cash are currently 580 thousand per hour, a limit that will however be raised further when it will be necessary. Bitcoin Cash also integrates support features for Smart Contracts, management of new coins (tokens), improved privacy and much more. But back to the main theme, with BTC to be able to carry out a transaction you have to compete economically in an auction by paying a higher fee than the others. In August 2020, a BTC transaction costs an average of €5, but potentially in the future it could cost €100 or even €1000, while BCH transactions always cost and will always cost less than 1 eurocent. Using BTC for amounts of less than several tens of thousands of euros would not make sense. Bitcoin Core (BTC) shouldn't even be considered for small amounts, because transaction fees would be higher than the purchased value.
This aspect means that the usefulness of BTC will be reduced over time and therefore will limit its growth potential, and consequently make BCH much more suitable both as a currency and as a store of value.
Bitcoin Cash is your only chance now
In 2008, Satoshi Nakamoto created Bitcoin. Today it is regarded as digital gold, but it has the advantage of being even more scarce than gold. The amount of bitcoin is limited to 21 million units. Bitcoin's monetary policy is automated and predictable, it's all written in the code that the protocol is built with. The generation of the 21 million bitcoins takes place through the production (mining) of blocks that make up the blockchain, and it is halved every 210 thousand mined blocks (a period that lasts about 4 years). If you are still in doubt about the potential and how much of a deal it is to buy it today, consider how many people exist in the world and how many you know who already use this tool. To simplify, let's think only of Italy: currently there are over 26 million families, more than the units of Bitcoin available. Many of them will be able to own only a small fraction of Bitcoin.
Protecting your assets requires your commitment to educate yourself on the aspects of money. You need to make an effort to overcome what the school system has always taught, and to understand the dynamics that make BCH superior to BTC. By managing to go further, you will be able to stop following blindly the masses and make the best decisions to protect your savings. Broaden your views when making your assessments. From then on you will understand that Bitcoin Cash is your only chance. Whether you like it or not, you will need to be focused to truly take care of your economic future. If you are, you will end up buying Bitcoin Cash in order to be in complete control, to increase your wealth and to keep it safe for many years.
BCH has faster transfer times. So, you don't have to wait the 10 minutes it takes to verify a Bitcoin transaction! BCH can handle more transactions per second. This means that more people can use BCH at the same time than they can with BTC