The Bitcoin Paradox

Bitcoin hit a new all time high just weeks ago, of over $70,000.

And of course, investors and speculators are in a state of euphoria as their assets become more valuable in relation to fiat currency.

But, it’s got me thinking…

Does Bitcoin’s growth in value… defeat the actual point of Bitcoin?

This, is The Bitcoin Paradox.

What is Bitcoin?

Bitcoin is a decentralised payments system, that allows secure peer-to-peer money transfers on the internet.

It’s secured via blockchain technology, and represents a new form of money.

It crucially doesn’t require any centralised entity, like a government or central bank.

The decentralised nature of Bitcoin is why it means so much more to investors than any other asset.

It represents evolution, and innovation in the finance industry, ultimately giving more power back to those who use it.

I’ve been a supporter of Bitcoin ever since I truly understood what it was, and it’s popularity has continued to grow since it’s inception in 2009.

It’s direct rival is fiat currency, which is the centralised money system we all used today.

Cash, however, has one big problem.

Inflation.

It’s supply is unlimited, and central entities have the ability to print new money at will, devaluing the currency, and making everything more expensive.

Bitcoin, however, doesn’t have this problem, and is mathematically programmed to cap at 21,000,000 Bitcoins, with the final Bitcoin set to be mined in the year 2140.

Bitcoin is still a baby, especially when you acknowledge that fiat currency has been around for centuries.

Bitcoin’s Current Measure of Success

Bitcoin investors claim that Bitcoin is so much more than just an asset, or an investment, and I agree with them.

• It’s a movement.

• It represents a new way of exchanging value.

• It represents freedom, and control to the user.

And sure it is.

So, does it’s fiat value really matter as much as investors think it does?

Why are investors who say they’re “holding Bitcoin forever” glad when it reaches a certain milestone in relation to fiat… the thing that it’s designed to go up against?

The celebrations of these milestone suggests that fiat currency is more important than a lot of investors think.

If Bitcoin’s success is measured in fiat currency, can’t central banks just print a load of money and then buy all the remaining Bitcoins?

Maybe we’re still in a stage of adoption awareness/exposure, rather than use case and functionality…

Bitcoin’s True Measure of Success

Bitcoin’s success shouldn’t be measured in fiat currency.

It should be measured in impact, and disruption.

Or, just how much it’s used. Not how much it’s worth.

If you’re going to treat it like any other investment, then that’s all it’ll be.

A vehicle for you to build wealth in. But, Bitcoin is so much more than this.

Maybe it’s a bit too early to make this transition, but I think we’re at least close to declaring Bitcoin as a legitimate monetary system.

The only problem is, people aren’t going to want to use Bitcoin for what it is.

Why? Because it’s an appreciating asset (in relation to fiat, of course).

Why spend your Bitcoin when it can be worth 5x as much in a few years?

This is the problem. This is the Bitcoin paradox.

At what point are investors going to start using their Bitcoin for what it is?

Transactions. Not, an investment.

For now, it’s simply a collectible. A game of accumulation.

Will anyone ever want to spend their Bitcoin? Why would they?

The lack of value in fiat currency means it’s easy to spend. Bitcoin doesn’t have this benefit, and the idea is that it never will.

The simple problem is that Bitcoin is too good of an investment for anyone to ever want to use it for what it’s meant to be used for.

When will this change? Will it ever change?

See the problem? See the paradox?

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