I regret selling my Bitcoin earlier. At that time, it was a few hundred U.S. Dollars per coin, whereas it currently values more than sixty thousand. However, without that genuine regret, I would not have researched it as deeply as I have done for these two years. Bitcoin is something more than what most people think what it is. If future investors buy it now and keep holding it towards the future, it will give them a certain level of financial security because its price will continuously increase. The process leading to my conclusion was not deductive; my head was full of negative questions about Bitcoin. This article is not derived from my current investment position either; it is converse. Nobody can be an insider of it. I want to know, so I can close my position, if there exists a compelling discussion about how Bitcoin will fail down the road. Nevertheless, I am convinced that everyone who needs to optimize their financial situation should invest their time to learn about it and invest their spare money in it because history suggests groups with technological advantages become prosperous, and ongoing events show that the time has ripened.
It is significantly important for future investors to be curious and learn about Bitcoin now even though there is no impact will be added to its existence whether they realize it or not. It resembles how people adopted other technologies. Regardless of the lack of interests from most societies in their early stages, or in some cases receiving harsh rejection, some innovations still exist and expand their influences. It is easy to see the internet getting chaotic and worse (Allyn), but it is difficult to ignore it from today’s life. Also, considering that fax was once illegal because it is understood as evasion for use of USPS First Class Mail service (Davidson and Rees-Mogg 212), how to see technologies currently emerging like Bitcoin and cryptocurrencies should be carefully pondered. The only difference between the abovementioned technologies and Bitcoin, in terms of adoption, is that the latter is still in its early stages. That means the readers of this article can still have an opportunity to adopt it earlier than others and benefit from it.
When people started accepting the internet, some also started considering what can be done with it in their fields, such as libraries and trading commercial goods. Chances to recognize the potential of new technology roots in every day lives. Looking to devastating economic situations in some countries hints at what Bitcoin can and is doing. In March 2024, the Nigerian government detained two of the executive officers of the local legal entity of the world biggest cryptocurrency exchange, Binance. The country's internal revenue authority alleged the company for tax evasion. However, the real issue is the inflation in the country and the national currency naira (NGN) ’s depreciation. According to news on CNBC, the inflation rate marked 30% a couple of months ago, and the currency lost 70% of its value relative to the US Dollar (Smith). That is to say, five years ago, in March 2019, you needed only a quarter of NGN to purchase a USD compared to the current exchange rate. In terms of bitcoin, the ratio is as much as one to fifty-five because of the amplification caused by the dollar-bitcoin exchange rate. I did the same calculation for Lebanese pounds and Argentine pesos. The value of the Lebanese pounds decreased to astonishing one-sixtieth compared to the USD, and one-eightieth compared to bitcoin in the same period. About the Argentine pesos, the figures are one-twentieth and one-two hundred-sixtieth. The allegations of countries that issue such currencies should not simply be thought as just for their incunbent authority and the cryptocurrency be wrong for it is new. From the standpoint of citizens suffering from the massive devaluation of currencies, there should be alternative options to keep their spare money in other forms.
Traditionally, goods whose volume produced is limited has functioned as money. If that limitation to the production of the money is not held, human activities in the affected area has suffered (Fergusson 21), especially exchanging goods through the use of it. In the book Bitcoin Standard, Ph.D. in Sustainable Development from Columbia University, Saifedean Ammous, presents a thought-provoking historical fact about aggry beads. Aggry beads were colorful beads that were used as a means of trade in West African countries. They were valuable in the region because glassmaking technology was less prevalent than in Europe. As time elapsed, its role as the medium of exchange became a wealth transfer functionality from the region to the hands of people bringing more beads (Ammous 16). The Europeans arrived in West Africa in the 16th century and realized how the locals treated the beads, then they began bringing their glass-made beads from Europe to trade goods with them. As a result, the valuables that could be exchanged with beads were gradually and constantly drained from the region.
How to avoid bad implications such as one taken place in West Africa? That is where technology adoption comes in. A technology has let those who adopted it go through immensely different stages than the scenes those who did not adopt saw. In the Pulitzer Prize-winning bestseller Guns, Germs, and Steel an American Scientist, Jared Diamond tells of an intriguing fact about the invention of wheel. According to the book, the wheel was invented in twice. Each was independently in Eurasia and America (Diamond 255). In Eurasia the technology got spread fast hand in hand with its application with use of domesticated animals. Without that combination, animal powered cultivation of land, chariots, and wagons do not exist. On the other hand, it stayed as a toy in America because, due to the lack of livestock the wheel is attached to, people cannot imagine the more profitable use cases exploitable from it. Not all species of animals are born to be domesticated as cows and horses. Zebras, for example, cannot be tamed in any ways, whereas similar-looking horses are human’s companion for a long time. So, the application of wheel as a toy instead of other pragmatic ones was not the people's fault. However, knowing what is happening economically in other countries and linking a new technology to a potential solution in a certain scenario is not as difficult as in the past. Capital flow into Bitcoin due to inflation and currency depreciation is seeable thanks to the information distributed by various communication media established on the internet.
While the internet is understood as the network of networks and the fax is instant transfer of hand-writing messages, what is the core value of Bitcoin? That is store of value due to its scarcity, and it has two meanings. First, it is the seminal and purest form of digital scarcity. Before Bitcoin, no digital information can render scarcity. We use the word ‘send’ customary when users email or share files with others, but in fact it means that the recipient is given a copy of the file (Ammous 177; Shin 17). Thinking about a case where we send apples or books to someone as a present represents the fact that we do not have those apples or books left with us after giving, what Bitcoin established is easier to perceive. Due to the limitation of time and pages, I cannot dig into the technologies enabling it, but one of them, frequently referred to as blockchain technology has been seen as an innovation that will change how the world works (Voshmgir 62).
Second, the scarcity that bitcoin embodies is absolute. The number of bitcoins produced is capped at almost twenty-one million and is said to reach it around 2137 (Antonopoulos and Harding). On the contrary, gold, the icon of the scarcity for many centuries, has been mined, made into ingots, and minted as coins constantly even though the rate of those newly created gold products has been historically the lowest level in almost all goods human produce (Holmes). Scarcity is the qualification that most money seemingly fails to fulfill to become a sound means to store value. (Other easily satisfiable qualifications are divisibility and transportability (Ammous)). Bitcoin has achieved this scarcity programmatically and showed us that it holds it by test of time. Ammous says its code has not changed ‘in any meaningful ways’ and has continuously demonstrated its stubborn adherence to its original ethos. Those include the capped number of production and other characteristics such as its block size (Caffyn).
Almost all scams and frauds boasts their scarecity and essentiality. Seeking the source of legitimacy in authority does not always present right, but it is not undoutedly true to help the skeptical to initiate their first look at new technologies. Bitcoin Exchange-Traded Funds (ETF) got approved on market in January 2024. In an article published on International Moneytary Fund’s website, Randall Dodd, Ph.D. in Economics, who taught at Columbia and Johns Hopkins University, explains that using exchanges is far better option to trade financial products than transacting over the counter (Dodd, Randall). Buyinng and keeping companies’ stocks by ourselves is cumbersome and complicated. As a result, many contemporary investors buy and keep funds’ shares traded on exchanges. Those funds, then, buy and sell their selections of financial products such as stocks and rare metals instead of the investors. Because exchanges are deemed a safer place to buy investment products, U.S. Securities and Exchange Commission (SEC) conducts processes to approve what types of products can be sold and bought, and this year funds holding bitcoins have just been approved to be traded on them (Masters et al.). It is a go-sign for passive and conservative investors to start investing bitcoins.
I have not contained some of the essential questions regarding Bitcoin such as its price volatility, the consequences and meaning of its mining activities, the anonymity of its white paper’s author and the significant difference it brought to Bitcoin and other cryptocurrencies, and so on. However, the fact that Bitcoin materialized the digital scarcity and what technology adoptions historically means are mentioned. Ramifications of inferior monetary policies and how people affected by them is also shown. Takable attitudes in the face of repellent phenomenon is also hinted. All of them points to a fact that younger generations need to learn about the technology and make their decisions to convert this time to the turning points of their lives. A Bitcoin advocate Michael Saylor, who also founded a software company on NASDAQ, says, “We’re just waiting for the rest of the world realize how good it is.” (Sorkin)
Allyn, Bobby. “Everyday Users Are Complaining That the Internet Is More Chaotic than Ever.” NPR, 16 Jan. 2024. NPR, https://www.npr.org/2024/01/16/1224878097/everyday-users-are-complaining-that-the-internet-is-more-chaotic-than-ever.
Ammous, Saifedean. The Bitcoin Standard: The Decentralized Alternative to Central Banking. Wiley, 2021.
Antonopoulos, Andreas M., and David Harding. Mastering Bitcoin: Programming the Open Blockchain. Third edition, O’Reilly, 2023.
Caffyn, Grace. What Is the Bitcoin Block Size Debate and Why Does It Matter? 8 Oct. 2021, https://www.coindesk.com/learn/what-is-the-bitcoin-block-size-debate-and-why-does-it-matter/.
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Diamond, Jared M. Guns, Germs, and Steel: The Fates of Human Societies. 20th Anniversary edition, Norton, 2017.
Dodd, Randall. Financial Markets: Exchange or Over the Counter. https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Financial-Markets. Accessed 11 Apr. 2024.
Fergusson, Adam. When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany. 1st ed, PublicAffairs, 2010.
Holmes, Frank. “Top 10 Gold-Producing Countries.” Forbes, https://www.forbes.com/sites/greatspeculations/2018/06/13/top-10-gold-producing-countries/. Accessed 11 Apr. 2024.
Masters, Brooke, et al. “SEC Approves First Spot Bitcoin ETFs in Boost to Crypto Advocates.” Financial Times, 11 Jan. 2024, https://www.ft.com/content/443b2589-0a4a-48ef-872e-3cd52b1b297d.
Shin, Laura. The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze. First edition, PublicAffairs, 2022.
Smith, MacKenzie Sigalos, Elliot. “Binance Executive Escapes Nigerian Custody as Authorities File New Tax Charges.” CNBC, 25 Mar. 2024, https://www.cnbc.com/2024/03/25/binance-executive-escapes-nigerian-custody-as-authorities-file-new-tax-charges.html.
Sorkin, Andrew Ross. “Bitcoin Has ‘all the Great Attributes & None of the Defects’ of Gold: MicroStrategy’s Michael Saylor.” CNBC, https://www.cnbc.com/video/2024/03/11/bitcoin-has-all-the-great-attributes-none-of-the-defects-of-gold-microstrategys-michael-saylor.html. Accessed 6 Apr. 2024.
Voshmgir, Shermin. Token Economy: How the Web3 Reinvents the Internet. Second edition, BlockchainHub, 2020.