Money and property ownership are basic human rights. Bitcoin is the best version of money, the hardest asset, and the most widely available monetary network. For these reasons, bitcoin and human rights go hand in hand.
To learn all the basics about bitcoin, check out my article: What is Bitcoin? It goes over the fundamentals, and answers questions like: Why Was Bitcoin Created? and What Purpose Does It Serve?
An Escape From Financial Tyranny
In many countries throughout the world, Bitcoin is a safe haven from unreliable currencies that go through high inflation, and hyperinflation.
Being subjected to an unreliable currency makes it nearly impossible to escape poverty. This is a serious problem that effects a large percentage of the world’s population.
Further worsening the problem, many impoverished nations with unreliable currencies are largely unbanked, meaning their citizens do not have access to financial institutions and banking services.
The good news is that anyone in the world with a cell phone or computer and internet access can utilize bitcoin to escape financial tyranny. It’s a way to opt-out of your local currency.
In its current state, bitcoin highly volatile. This is a con to using it as a currency in 2021, but that’s not the whole story. While bitcoin can lose value in the short term, history has proven that it ALWAYS goes up in value over longer timeframes.
To learn more about bitcoin volatility, check out my article: Why is Bitcoin So Volatile? It gets into the economics and game theory that drive wild swings in the bitcoin price.
Let’s compare bitcoin to a national currency that is experiencing high inflation. One is guaranteed to go down only (inflating currency), while the other almost always goes up (bitcoin).
Which would you rather choose? I’ll take bitcoin every time.
Bitcoin and Remittences
Utilizing the Bitcoin Network is by far the best way for people to send remittences home to other countries. It’s drastically cheaper than commonly used fiat transfer companies like Western Union.
In addition to being cheaper, it’s faster, more secure, and orders of magnitude more widely available (can be used anywhere in the world, any time of day).
Inflation In First World Countries
In the United States and other first world countries, currencies are stable and people have access to banking services. These currencies and banks are highly functional, and inflation is low (in the short term).
The functional nature of modern fiat currencies and banks make it harder for citizens of first world countries to realize the need for bitcoin, and identify the problem that it solves.
Just because something is functional, doesn’t mean that it’s optimal, or sustainable. This is the key to seeing through the smoke screen, and realizing that the monetary system is broken. It’s held together with duct tape, glue and steroids.
In recent years, the United States has been printing money at an alarming rate (as have every other country that controls their own currency).
This money printing has lead to increased inflation, extremely low (or negative) interest rates, negative real yielding bonds and savings accounts, and a national debt crisis.
Inflation Steals From The Working Class
America doesn’t realize it, but the middle class has all but disappeared in the past century thanks to inflation, and the growing wealth gap.
How is this possible? The middle class had a standard of living that remained constant, but over time, but they’ve started working drastically more.
The average middle class family went from flourishing on one income, to swimming in debt, and barely getting by on two incomes.
In 1920, the average income in the United States was about $3,270. At this time, a Ford truck cost $260 – or about 4 weeks of wages.
Compare this to present day.
In 2020, average income in the US was about $53,000. At this time, a Ford truck cost about $53,000 – or about 52 weeks of wages.
An average wage earner must work 13 times as many hours to buy a new truck in 2020 vs 1920!
Yes, you could argue that there are other factors at play here, such as a 2021 truck being drastically better and more functional than a 1920 truck – but that is missing the bigger picture.
To understand what’s really going on here, let’s look at technological deflation.
Technological Deflation vs Monetary Inflation
In free-market capitalism, technological deflation drives the price of goods and services down over time as specialization, trade, and productivity are optimized.
The Ford truck is an excellent example of this. In 1908, a Ford model-T cost $850. In the 12 years following, technological deflation dove the price down by 69% to only $260!
OK, but prices are always going up now days, so where’s all the technological deflation?
That’s a great question. Believe it or not, technological deflation is alive and well, stronger than ever today. However, its efforts are thwarted (on purpose) by inflationary monetary policy.
Central banks, in conjunction with federal governments try their absolute hardest to fend off deflation by printing money, and flushing the economies of the world with as much capital and liquidity as they can possibly handle.
In my opinion, the goal of the federal reserve is to make the world believe that they are targeting and accomplishing 2% CPI inflation, while actually they are actually targeting and accomplishing 5-10% real inflation.
But why?
Inflation Erases Debt Over Time
The wealth transfer from this monetary system flows uphill, meaning it lines the pockets of the wealthy and those in power. Simultaneously, it steals purchasing power from the working class.
Inflation decreases the debt burden of borrows over time.
Inflation minimizes the debt burden – and guess who holds the most debt? Yup, the government, the wealthy, and those in power.
You might have a $400,000 mortgage, student loans, an auto loan, and maybe even some credit card debt, but that’s hardly a drop in the bucket compared to a $26 trillion national debt, commercial loans by the 100’s of millions, and billions in corporate debts.
When a country (that controls their own currency) becomes highly indebted, spending MORE money is actually the solution to the problem of having spent too much money in the past! Yes, this is kind of insane.
History has shown that this problem gets continually worse over time. Inflation will continue to steal more and more of your purchasing power. So what’s the solution? You guessed it – bitcoin.
Bitcoin As An Inflation Hedge
As central banks continue to print more and more money, it only adds fuel to the fire that is bitcoin. Historically, gold has been the inflation hedge of choice, but it might not be that way forever. In today’s digital economy, gold is falling out of favor.
During times of economic uncertainty – especially when inflation fears are high – investors de-risk by fleeing from higher risk assets (like growth & technology stocks), and into cash, gold, and treasury bonds.
However, in the past 10 years, gold has experienced a negative nominal return (before inflation). After factoring in inflation, gold lost a ton of purchasing power in the past 10 years.
If you believe CPI inflation numbers, than gold lost a little over 20% of its purchasing power. In the real world, I believe it lost significantly more than twenty precent.
It’s looking like gold is a poor inflation hedge in the 21st century – how much better has bitcoin done than gold?
The numbers don’t lie. In the same decade that gold remained flat, and even lost purchasing power, bitcoin gained a staggering 650,000% from 2011 to 2021. That’s a hedge, and then some.
While these parabolic gains cannot continue forever, I believe there’s a strong possibility that bitcoin could reach $1 Million per coin by 2025 (and it still has room to grow from there). A strong and steady price appreciation is sustainable forever.
Bitcoiners have a strong conviction that bitcoin will continue to be a safe haven asset that will provide a hedge against inflation, as well as access to sound money for anyone that chooses to use it.
These are some of the primary reasons why I personally hold bitcoin, and encourage anyone who will listen to me to do the same.
How To Get Started With Bitcoin
The best way to continue learning, and expand your understanding is to ‘dip your toes in the water’. I recommend purchasing a small amount of bitcoin to learn how it works through personal experience.
If you want to learn more, read: Should I Buy Bitcoin? This article will walk you through everything you need to know before making your first purchase, plus, my favorite place to buy bitcoin.
Check out all my other articles here.
Thanks for reading! Please leave any questions or comments below.
