The Problem: Fiat Money
Fiat money, which means money that is not backed by a tangible asset (like gold), is prevalent in our lives, serving primarily as a medium of exchange, unit of account, and store of value. Fiat currencies, such as the US Dollar and the Euro, generally do not preserve purchasing power over time. They perform better in countries like Switzerland, Germany, or the USA than they do in Nigeria, Iran, or Turkey, but even in more stable economies, purchasing power decreases over time, albeit more slowly. The expansion of the money supply results in the devaluation of all fiat currencies, making them inefficient stores of value. Due to inflation, saving in fiat money is impractical. Consequently, people invest in real estate, stocks, or gold, hoping to preserve their purchasing power. A genuine 'savings' vehicle is essential to maintain our purchasing power (or working energy) over time. Fiat money has several problems, but its inability to serve as a reliable store of value is among the most significant. As illustrated by the following chart, over 24 years, you would have lost 13.74% of your purchasing power in Switzerland (CHF), while in Turkey (TRY), the loss would have been nearly complete (99.84%).
Purchasing power in different countries/regions over 24 years (2000 - 2023)
Data source: World Bank Group
The Solution: Bitcoin
Bitcoin is the only form of sound/hard money that offers a significantly better way to save. It enables us to transfer our purchasing power across distance and time. The supply of Bitcoin is fully transparent and capped at 21 million coins. After this limit is reached, no more coins will be issued, ensuring that there will be no monetary inflation. While Bitcoin's price can be very volatile in the short term, it is advisable to hold onto it for a minimum period of about 5 years. In the long term, Bitcoin represents a superior savings mechanism for everyone. The following chart, which uses a logarithmic scale, illustrates this point: if you had invested 100 USD in Bitcoin at the beginning of 2015, your investment would have a purchasing power equivalent to 18'838 USD. Conversely, if you had 'invested' the same amount in the Iranian Rial (IRR), your purchasing power would have dwindled to merely 7 USD. Thus, the choice of currency for your savings really does make a significant difference.
Purchasing power of Bitcoin and different countries/regions against the USD (2015 - 2023)
Data sources: World Bank Group / Yahoo! Finance
Characteristics of Bitcoin
Fixed supply
Bitcoin has a capped supply of 21 million coins, making it a deflationary asset by design. In contrast, fiat currencies can be printed endlessly by governments, leading to inflation and devaluation over time.
Secure
The Bitcoin network is the most secure and decentralized computer network available. It's security is guaranteed by the hashing power/energy of thousands of worldwide distributed computers. It is nearly impossible to counterfeit or hack Bitcoin.
Private
While Bitcoin transactions are recorded on a public ledger, personal identity information is not directly tied to these transactions, offering a degree of privacy called pseudonymity.
Decentral
Bitcoin operates on a decentralized network using blockchain technology, making it free from control by any single entity, government, or central bank. This decentralization reduces the risk of manipulation, censorship, and corruption. There is no central point of failure because the ledger which stores all transactions is stored and verified by thousands of computers, called nodes, all over the world.
Borderless
Bitcoin can be sent and received anywhere in the world with an internet connection, bypassing traditional banking and governmental restrictions. This makes it incredibly useful for cross-border transactions, remittances, and for those in countries with unstable currencies or financial systems.
Trustless
There is no trust in banks, payment providers or other middlemen needed to transfer money via the Bitcoin network. This can reduce the cost of money transfers significantly and without being dependent on our traditional financial systems.
24/7/365
The Bitcoin network never sleeps. Transfers can be made at any hour, and any day, the whole year. There are no weekends or banking holidays where everything is closed.
Inclusive
Bitcoin can provide financial services to people who are unbanked or underbanked, giving them access to a global economy that they are otherwise excluded from due to lack of access to traditional banking.
Transparent
Every Bitcoin transaction is recorded on a blockchain, which is a publicly accessible ledger. This transparency can reduce fraud and corruption, especially in scenarios where trust is a concern.
Divisibile
Bitcoin is divisible to eight decimal places, allowing for microtransactions that are not possible with traditional fiat currencies due to their physical limitations or fee structures. 1 Bitcoin is equal to 100 million of Satoshis.
Portable
Unlike physical money, Bitcoin can be easily moved and stored in various digital wallets, providing users with a high level of portability and control over their assets.
Community
Bitcoin has a growing community of people from different nations, religions and interests. Together they use, develop and maintain the Bitcoin ecosystem.
Next Steps
On this website we provide information about Bitcoin. We will explain the use cases of Bitcoin, why you should study Bitcoin, how to buy, store and use Bitcoin, a Bitcoin FAQ and a separate page to explain the Bitcoin FUD (fear, uncertainty and doubts) which is heavily propagated by the media. That's why you should think for yourself, not trust anyone and investigate if Bitcoin can also add great value to your life!
"Fix the money, fix the world!"