Join 91,547 users already on read.cash

Bitcoin vs. Fiat - Round 1

0 11
Avatar for the.hifi.crypto
Written by   15
5 months ago

Listen to this article as a podcast.


The history of our world is full of financial crises. A review of various powerful governments from the past, such as the Roman and British empires, reveals that their downfalls had just as much to do with economic and financial chaos as with anything else. But it’s definitely not necessary to look even that far into the past. The 20th and 21st centuries have seen a host of economic downturns, so much so that economists and analysts alike have baked into their financial models the expectation that a major slump will happen around every ten years.

That reality is concerning to say the least. The average life expectancy worldwide is over seventy years, which means that, on average, each of us will see around seven major financial downturns during our lifetimes. The very thought can be enough to make us want to pull our hair out in frustration.

Why is this our reality? What is driving our world economy from one major crisis to another before we’ve even had a chance to recover from the first? While it may be reductive to try and attribute the cause of financial crises to a single source, there certainly is one driver of financial ruin that has more impact than most: Fiat currency.

False Fiat Narratives: Governments and Inflation of the Money Supply

For many years, governments and their economists have been trying to convince their citizens that government spending is the only way for countries and economies to fight their way out of a financial crisis. The thinking goes that if governments increase their spending to fill in the gap in consumption left by businesses and consumers who are running out of money, then those same businesses will have cash to pay their expenses, including wages for their workers who can turn their compensation into additional consumption. The vision of a self-sustaining economy built on the back of the government’s budget can certainly seem like a convincing narrative. There’s just one problem: inflation is the problem, not the solution.

Hold it though. We were talking about government spending, not inflation. During a financial crisis, they are one in the same. History has taught us that governments run deficits in their budgets even during non-crisis times. Governments have no savings with which they could fund extra spending during financial downturns. Nor are they able to fund such spending through additional taxes or the sale of government debt. After all, levying extra taxes on businesses and consumers during a crisis would lead to the very “cash crunch” that governments are trying to avoid. And businesses and consumers who can’t pay their own expenses certainly don’t have money to buy government bonds.

In no uncertain terms, inflation always results when excessive government spending happens during a financial crisis. No extra cash exists for governments to carry out that spending. So what do they do? They print more. Trillions more. And when governments print cash out of thin air, the cash sitting in your wallet, your bank account, or your investment portfolio is worth less. As your ability to buy goods and services that you need for survival and comfort decreases, you are forced to spend more and more of your existing and future net worth just to get by. Your ability to save for the future goes down, and your ability to weather financial crises by living off of your savings goes down with it. It’s a vicious financial cycle and it explains why our world moves from one financial crisis directly into the next: government spending exacerbates the current crisis and creates the next one.

As a result, the idea that government spending through monetary inflation can bail out a nation in crisis is paramount to giving an arsonist a torch and asking him to use it to put out the fire he started. It’s never going to work.

Bitcoin Fixes This

If the issue at hand is the nearly uncontrolled growth in the money supply, then there is no better solution than that offered by Bitcoin. Bitcoin is the hardest monetary asset in history. It’s hard cap of 21 million coins is widely known and firmly set in stone. No amount of government interference can change the Bitcoin supply cap.

People and businesses who save their wealth in Bitcoin can rest assured that the value of their holdings will never decrease as a result of someone counterfeiting Bitcoin (i.e., inflating the supply). As their confidence in the persistent value of their Bitcoin-denominated wealth grows, people’s desire and ability to save will grow in tandem. Hard times will still come. After all, pandemics, revolutions, natural disasters, and the like will continue to take their toll on humanity. But people will be able to weather those financial storms on the strength of their own saved resources, not on the pretended strength of their governments’ ability to spend.

Bitcoin offers the world a better way to live and a better way to save. Many will argue that governments will still have a place in a world in which Bitcoin is the global store of value and global currency. If that is true, then in such a world governments will no longer be judged by their ability to spend, but by their ability to serve their citizens.


Like what you see, but not a subscriber yet?

Subscribe now

Consider subscribing for:

📧Two weekly emails on the topics of cryptocurrency and blockchain

💰Subscriber giveaways for Bitcoin, Crypto Bestseller Books, Non-Fungible Tokens (NFTs), and more

🗣Real-time community discussions on the latest news within Crypto


😱Can’t Get Enough Crypto In Your Life?😱

Consider joining my:

🐥Twitter. Where I share live news and thoughts about the goings on of the crypto-verse.

📸 Instagram. Where I share bytes of crypto knowledge about more topics than we can cover in a twice-weekly newsletter.

📚Facebook. Where I share my latest content and engage the community on the world’s biggest social network.


Support the newsletter:

Recommended service:

Want to grow your crypto while you hodl it? I use BlockFi to earn interest on my Bitcoin and crypto, and they also offer cryptocurrency exchange, custody services, and more. Open a new account and earn $40 in free Bitcoin when you deposit your first $100 of crypto on BlockFi.

Want to earn crypto while you learn about it? I use Publish0x.com to learn about crypto and support crypto bloggers while getting paid for it. The best part? It’s completely free! Sign up and start earning today!


Crypto Roundup 🤠

Bitcoin Nation: The President of El Salvador has indicated that more people in his country are using Bitcoin than are using banks. Read more

Institutional Bitcoin: Bitcoin adoption by major companies may lead to significant long-term growth, not just in price, but also in ease of use. Read more

Bitcoinlandia: Volunteers in the Democratic Republic of the Congo are teaching families how to use Bitcoin to improve their way of life and their standard of living. Read more


If you enjoyed the above article, please consider supporting me by providing a small tip and by subscribing to my free newsletter.

You can also take this 3-question survey to tell me how I can improve the newsletter for you. Click here.


This is not financial advice. This newsletter and related content are for informational purposes only. Cryptocurrencies, stocks, and similar assets can be risky. Always do your own research before making any sort of investment.

2
$ 0.49
$ 0.25 from @ewyr
$ 0.24 from @TheRandomRewarder
Avatar for the.hifi.crypto
Written by   15
5 months ago
Enjoyed this article?  Earn Bitcoin Cash by sharing it! Explain
...and you will also help the author collect more tips.

Comments