Is Growth and Accumulating Wealth Possible with a Limited Money Supply?

Can I rightfully even call this one an article? Because it is going to be more of a posing of a question. Or, perhaps sharing a curiosity is the better way to frame it? What I want to do is toss out a thought and pick some smarter brains than I.

Because I like to know stuff, you know.

Obviously as I dive more and more into the world of crypto, I want to be able to understand it frontwards and backwards, and know all of the ins and outs, advantages and disadvantages, and all of the plusses and minuses.

How can I be invested in something unless I am fully versed in what it is, what it does, what it aims to accomplish, and how it will ultimately make me money and serve a higher purpose in my financial life?

As well, I have my opinions on matters of crypto. And from time to time I want to write about them. From time to time I do share them here and in other forums.

How can I express my opinions fully, and with validity if I don't fully grasp the basics? Without the proper formulation of a basis for my opinion, it's just me talking out of my ass of course.

As I talk about crypto, not knowing enough makes me sound potentially foolish. Worse, it sends the wrong information to someone who knows less about it than I do.

My perceived reality becomes the reader's defined reality. That's not fair to crypto, and it is certainly not fair to the one reading my opinions and thoughts on the subject.

I realize this is a lot of lead-in to get to the meat of the matter. But I also feel that it is important to air these thoughts first so that you have a better understanding of where I am coming from when I present my thoughts, and ultimately my question.

Often times when people try to "sell" the idea of crypto, a common attribution that gets tossed out there is that fiat is an unlimited supply, and crypto (at least for certain coins) is not, and that somehow this makes the value of crypto greater than fiat.

Less supply equals higher value.

The basic idea of this is something that I am all too familiar with. In other words, it makes sense. Except when we are necessarily talking about matters of money.

One thing to keep in mind is that even when most currency was based on gold, it did not rely on a finite amount of it. We could obtain more of it in order to maintain the money supply, and allow it to grow, and still allow the currency to hold value.

The way I see it, and I could be entirely wrongheaded in my thinking, is that eventually at some point, with a limited supply of money, we could ultimately run out of it—or its distribution would be such that as population growth occurs, people simply become poorer and poorer because there is simply less of it to go around.

The current world population is right around 8 billion, and the limit for Bitcoin is set at 21 million. Even if the entire world owned Bitcoin at an equal share, that would mean everyone would have 0.002625 BTC.

Granted, just like how money in the "real" economy works, some would have more and some would have less depending on a variety of factors.

But what happens to the shares as the population grows to 10 billion, 15 billion, and 20 billion respectively? Sure, the value of each slice of the pie may be worth more. But still, with more and more people sharing the limited supply, people would have less ultimately.

And as well, inflation will still occur even if we no longer have fiat or economic or monetary policy, since many factors outside of these influences also determine what things will ultimately cost, or what you will be paid for labor.

On top of that, how does one grow what they earn? If the supply is limited, where does the money come from to allow one to invest and save? Where does the opportunity come in to infuse more wealth into the entire system so that each individual is able to enjoy the fruits of his or her labor?

At the end of the day, I will fully acknowledge the challenges of our current system where the idea is simply, "Need more? Just print more." Unfettered, this is rife with problems. And some of those problems are rearing their ugly heads as we speak.

But it also seems to me that without the current system, the opportunities would be less to actually be able to get ahead and join in on our tranche of riches and, at the very least, some level of prosperity.

Granted, there is no denying that when we used the gold standard, we still had opportunity. And, of course, we know gold is ultimately limited in its supply as well. At some point there would be no more gold to mine, and that would have been it. Whoever had the most wealth at the end of the game would have it—and ultimately would also control it.

Let's say that throughout the history of the United States it just acquired more and more gold, until when the supply was at its pinnacle, the largest holder was the United States. How would other countries prosper when the bulk majority of all the gold in supply would be held in the hands of one sovereign power?

It seems to me that the limited supply idea of crypto would suffer the same obstacle. And it seems to me that it is a big one. At some point there will only be a handful of people who hold the most crypto. And if you want any of it, the rules you have to play by are theirs.

How does this remove power from the big and wealthy and restore it to the people? How does this remove people from the obstacles they face now in creation of their own wealth and prosperity?

Consider that part of the reason we got away from the gold standard was because at some point it simply became necessarily unviable, and hamstrung governments in efforts to expand, and create more wealth, and more opportunities to grow economies and the economic standards of everyone operating within it.

When money became unlimited, so did the opportunity of each individual to obtain more of it become more possible and more attainable.

At some point I simply wonder if all we can rely on are limited money supplies from crypto, does this make everyone operate on equal terms, and if that is the case isn't this something akin to socialism?

And if it is socialism, why would we embrace an idea that has only ever failed? It is a system that leaves almost everyone poor while only a very small few get to enjoy wealth.

In socialism, it's not the top 1%. It's the top 0.01%, and all the rest of the people suffer.

Help me to understand better what I am missing, and perhaps where I might be going wrong. It is, so far, a question I have not been able to find a reasonable answer for.

What happens when the mining is done? Who holds the most wealth? What do they do with it? And how does the average person benefit from it differently than the current world of money we live in? How do we have the power when we don't control it?

Just like it was before.

In the limited supply concept, aren't we just right back where we started? And aren't we actually much worse off than we were before it? Aren't we all just poor and less able to obtain wealth? And does not the limited supply of money actually make the powerful and wealthy even more powerful?

Lead image courtesy of Pixabay, user Stevebidmead. Gold Ingots Treasure - Free photo on Pixabay