Bitcoin and fiat money represent two different monetary theories. We have compared them twice.
Scarcity
In terms of scarcity, Bitcoin is clearly ahead. The crypto currency NR.1 is the hardest form of money in the history of mankind. Every four years the inflation rate halves. The Bitcoin money supply growth is fixed until the year 2140. Within the first four years of Bitcoin’s existence, 50 BTC per block came into circulation, and now it is just 6.25. Bitcoin money supply growth is thus becoming increasingly scarce, and thus forms a diamond-like difference to fiat money. The money supply growth of the global central banks, on the other hand, is no longer holding up these days. Due to alarming economic figures caused by the Corona Pandemic, central banks are flooding the financial markets with liquidity.
Confidentiality
The trend is clearly towards digital money, because physical money, i.e. cash, is a declining trend all over the world. If we define cash as a medium of value storage and exchange that can be transferred without an intermediary, BTC actually falls into this category, unlike digital central bank money. Already today, the largest part of the global money supply is digital. However, the euro, US dollar and yen cannot do without financial intermediation by (banknote) banks and the like.
This leads to problems at the latest when, for example, political capital is created from the power of reserve currencies. Meanwhile, Bitcoin is certainly not an ideal medium for private matters. However, the digital gold Euro and Co. is far ahead of possible monitoring tendencies of the fiat money system.
Where does money get its value
Looking at the core of Bitcoin and fiat money, the two could not be more different. One derives its value from a non-corruptible construct of mathematics, incentives and cryptography. The other is based on the trust not to use the printing press too much and laws such as an acceptance obligation. This is a clear advantage for fiat money. The tax burden alone brings with it an immense demand for central bank money. This, but also economic indicators such as the external balance of the respective countries determine the value of fiat money. Bitcoin, on the other hand, focuses on the relevance of money as a medium of exchange and optimizes its properties as a store of value. Bitcoin’s value proposition relies primarily on the scarcity of digital currency.
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