This Week in Bitcoin 01.28.2020:
Each week, the Coinme Private Client team sends a weekly email, highlighting the top industry news and stories. Included in that email is “This Week in Bitcoin”, your guide to the state of Bitcoin. Here are the top news in This Week in Bitcoin 01.28.2020:
I’ve been reading “The Bitcoin Standard” by Saifedean Ammous, which I highly recommend. The first few chapters provide a refreshing view of what money is and how it came about. As an advisor at Coinme, I am constantly in the weeds, looking at charts and recent news, but rarely think back to the basics of why Bitcoin was created. Let’s take a quick look at the properties of money, the history of it, and why Bitcoin has a leg up on current and past currencies.
What is money? Money has continuously changed over history, but it is the result of humanity trying to solve one problem, how to exchange value over time and space. The simplest way for people to exchange value is through barter which is a direct exchange between two parties. To this day, we still use the barter system but as humanity grew in numbers, we needed to find a more practical way to exchange goods and services.
Throughout human history, many things have served as money: gold, silver, copper, seashells, large stones, salt, cattle, and currently government paper. All of these forms of money are still trying to solve the underlying definition of “perfect” money, which is; their salability across scales (how easily can it be used and how divisible it is), across space, and across time. Gold for example, has proved to be the best form of money over time. An ounce of gold 500 years ago would buy you a fancy tailored suit from London. That same ounce of gold can buy you the same fancy suit today.
In 1792 America took a significant step forward and created paper money. At that time, it met all of the general requirements of what money should be. It was salable and could exchange value over time and space. Now don’t get this confused with the money we use today. Back then, we had the wits about us to back every dollar with gold meaning that government money was hard and had intrinsic value connected to a commodity. Unfortunately, our government and eventually the rest of the world went off the gold standard “every dollar backed by gold,” and that is what we use today. I say unfortunately, because the current currency we use today has one disheartening characteristic, depreciation. As mentioned before, money must transfer value over time. Since 1913, the US dollar has lost 98% of its value! Is that sustainable over the next 100 years?
History shows that at some point, there is a high probability government money will be replaced by another form of currency. I believe that we are part of a unique time in history where we quite possibly will see the beginning of “new” money for the world to use. We’re not sure if it’s Bitcoin but I’m excited to see what unfolds in the coming years.
Are you ready to #StackSats ?
Here’s the infographic for This Week in Bitcoin 01.28.2020:
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