Bitcoin has been cited as the ‘all-conquering economic juggernaut’. As it’s the hardest money ever created, Bitcoin is said to be the triumph over existing currencies, simply because it has a finite supply. This means that over the long term, it will always be a better “store of value” over time. Bitcoin economist Dr Saifedean Ammous supports and suggests this view, stating that “in ten years, Bitcoin’s value will have appreciated by 700 million percent.”
Currently, Bitcoin has a supply that is limited to a total of 21 million individual coins. Once they’ve all been uncovered, the supply on this planet will be exhausted. Dr Saifedean Ammous has dealt with this subject thoroughly in his new book, The Bitcoin Standard: The Decentralised Alternative to Central Banking. His book has plotted Bitcoin’s history, from its creation by a programmer to a group of programmers, to “ten years later, and against all odds, this upstart autonomous decentralised software offers an unstoppable and globally-accessible hard money alternative to modern central banks”.
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Dr Ammous has also stated that: “Bitcoin is not the toy you want, it’s the medicine you need. Bitcoin is not optional, it’s here to stay.” As a currency, it’s set to be more solid than any other out there. Currently, there are 17,374,775 total number of Bitcoins in circulation, which is according to blockchain.com. The more the coin numbers increase, the more Bitcoin becomes a “harder” asset, which makes it a better store of value – according to Dr Ammous. The value of Bitcoin is completely determined by the public buying and selling it, which makes it a ‘monetary good’.
As we move forward in technology, it’s become apparent that the physical properties of objects are not the most important things in them gaining a monetary value. Dr Ammous is firm in his opinion that Bitcoin is the “all-conquering juggernaut of economic incentives”, and it’s because the supply increases year-on-year. The value of it soars and this isn’t the same way that traditional fiat currencies work. The growth rate is so low, that Bitcoin’s price is rising rapidly.
Previously, the growth rate of Bitcoin was at roughly one percent, and more fiat currencies tend to sit at about five percent. The price of Bitcoin hasn’t been stable over the past year, despite the positive predictions laid down by Dr Ammous. The asset has experienced massive swings in value over very short periods of time. Nicky Morgan, member of the Treasury Committee, has talked about the industry associated with Bitcoin is the “wild west” and that “Bitcoin exists in the wild west of crypto-assets”. As the industry is not regulated, investors could face large risks, and the Treasury Committee believes that a regulation should be introduced.
The economic reality of Bitcoin’s monetary incentives means that one day, this virtual asset will define global systems. Institutions are always crying out for a dynamic overhaul that suits the modern age we now live in. As Bitcoin can offer a decentralised banking system, hard money could thrive.
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