My take on Bitcoin

I’ve only been here for a year, but here’s my take after running like Forest Gump all over the crypto-sphere:

Bitcoin represents the first implementation of digital scarcity. Originally intended to be a currency, it has evolved into a store of value, which speculation has caused to exponentially increase in value at about a 200% increase year-over-year even through all its volatility. Bitcoin is the concept of hard money. It is referred to as “digital gold”. There will never be more Bitcoin, so as long as enough people agree that it’s value is all encompassing and act accordingly (by buying more), it’s price will literally only go up over time.

It is a perfect vehicle because it is a conceptual one. There will never be a replacement to Bitcoin, because logically why would anyone put faith into a replacement — if the concept of hard money can just be replaced, then the replacement would be even more easily replaced and the concept of the perfect store or value would cease to exist.

Bitcoin continues to succeed because the people who are believing it into existence are doing so by putting their money where their mouths are - they buy it. Bitcoin Maxis buy it with every dollar they can get their hands on and are even motivated to work harder to get more money to buy even more, no matter the price! Built into Bitcoin is the concept of the halving, where the computers that run and secure the network are rewarded half as much for doing so every 4 years. This assures a quickly dwindling supply for the market, and a reinvigoration to the community and increased rarity of the coin.

The beauty of Bitcoin is a perfect synergy between many aspects - its simplicity, its security, its transparency, its immutability. There has yet to be a problem that it hasn’t eventually crushed with the sheer weight of its concept. Bitcoin being the vehicle for the concept of hard money allows one to follow through many logical thought experiments that have interesting outcomes. My favorite:

Bitcoin will eventually optimize everything by absorbing all excess. When priced against Bitcoin, everything will eventually be worth only its utility. The real estate market and gold market are two examples of markets that should eventually be drained of their store of value bloat. There shouldn’t be empty homes with million plus dollar price tags while there are so many people with nothing. Bitcoin can fix that.

Every person that doesn’t believe in Bitcoin or who needs or wants something other than hard money will put their purchasing power elsewhere, and in doing so will be pricing those items for their utility to them. People taking out loans on their Bitcoin to make these purchases will further buy up the price of Bitcoin first. The more attractive Bitcoin gets, the cheaper everything else will become in comparison.

As more people glimpse Bitcoin’s potential and the more Bitcoin Maxis are born, more and more money will flow through Bitcoin, thus increasing the price forever until it eventually eats the whole world economy.

This may sound unfathomable to people, but it is a very real possibility for the future and makes logical sense when you follow through the incentives to society. The efficiency of the concept is what is important, not the amount of transactions it can process in an hour. Layer-2 solutions (the lightning network) solves that FUD anyway.

I should also mention that I do not consider myself to be a Maxi, but I do appreciate the mindset. Other concepts being tokenized are each having their own gold rushes, but we are so early and the value of other utilities is difficult to assess. Eventually people may mostly fund those other concepts with their leveraged wealth with all roads leading through Bitcoin.

TLDR; Bitcoin is the concept of hard money. Bitcoin Maxis ensure a steadily increasing floor price by always buying more. It is a self-fulfilling prophecy. The best strategy should be to horde Bitcoin until several floors are established above your buy-in, then take out and roll over a 25% loan on your assets to fund your life/invest more. Not financial advice.