Is Bitcoin really scarce? A good currency should be scarce, but Bitcoin can be forked off as many times as one desires. Can Bitcoin really be a good currency if it can be reproduced to create more of it? Doesn't this make it just as bad as fiat?
Welcome to our topic for Day 4 of Project [#]WOKE! We are presenting the case for "Why is Bitcoin, or a cryptocurrency similar to Bitcoin, better than the US dollar?" through a series of topics in this group. If you haven't read our previous days' topics, just click below and catch up to our mini series for bitcoin education. Perfect for your friends, family, and people you have been trying to help understandthe market.
Day 3: https://steemit.com/crypto/@cryptoautonomy/bitcoin-is-better-than-gold-day-3-prokect-woke
Day 2: https://steemit.com/crypto/@cryptoautonomy/bitcoin-vs-gold-day-2-of-project-woke
Day 1: https://steemit.com/crypto/@cryptoautonomy/bitcoin-vs-u-s-dollar-project-woke
Day 4 Let's begin!
Scarcity,having a limited supply, is one of the properties of a good currency that can be used as money. This is our focus in today's discussion. To learn more about the other properties of money, click here
Why should money have a limited supply? Because that's what makes it valuable. If a country used a source of currency that does not have a limited supply, then this money loses its value. Currently in Venenzuela, their currency has lost its value due to severe hyperinflation, that Venenzuelans are fleeing to neighboring countries in large numbers. This financial crisis is causing a drastic economic collapse, violence and crime have skyrocketed, and Venenzuelans have resorted to a bartering system. A parking lot attendant accepted bread as a source of payment for his services because of the government's uncontrollabe printing of their money. How bad is this crisis? 1 bolivar (Venenzuela's dollar) is worth less than fake gold in Azeroth. Not familiar with Azeroth? That's because it's a fictional place. It's the mythical setting of the popular game, World of Warcraft. Click here to learn more about the financial crisis in Venenzuela:
"Bitcoin is provenly scarce. There will only ever be 21 million of them, and there can never be more. You can calculate exactly how many there will be tomorrow and 10 years from tomorrow, unlike the US dollar, due to our centralized banking system's overprinting which causes inflation. (Check out our previous Day 1 post where we discussed this issue!) While scarce, Bitcoin is easily divisible. 1 Bitcoin can be cut into 100 million pieces and put back together at will. Bitcoin is more divisible than fiat or gold." -Erik Voorhees, CEO of Shapeshift.
If Bitcoin is scarce, then why are there so many cryptocurrencies that have Bitcoin's name in them?
One of the pics attached to this post shows the top 10 variants of Bitcoin: Bitcoin, (the original created by Satoshi Nakamoto in 2009) Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, Bitcoin Private, Bitcoin Dark, Bitcoin Atom, Bitcoin Green, Bitcoin Plus, BitcoinZ, and many others. To learn more about the ones I mentioned, click here.
Bitcoin can be forked off as many times as one desires. Click here to learn about forks
"There is also another 1,500 cryptocurrencies or so that can also do the same thing that Bitcoin can do, even better, faster, and cheaper. There is no limit to the number of other digital currencies that can be created. But gold, on the other hand, is not 100% like any other metal in existence. There will never be another metal like it. Its properties are unique to itself. Unlike gold, you can make as many cryptocurrencies exactly as Bitcoin and just give them another name." - Peter Schiff, CEO of Euro-Pacific Capital Inc:
So, can we actually say that Bitcoin is scarce, and therefore, would make a good form of money/currency?
When Satoshi Nakamoto created and gave Bitcoin its name, he actually gave both Bitcoin the cryptocurrency AND Bitcoin the blockchain, the same name. Bitcoin was uniquely created to have an open source blockchain. To understand what open source means, here is a very detailed article that does an excellent job explaining this.
The fact that Bitcoin is an open source is why it is so innovative and powerful, and also gives it its decentralized nature.
Now, although developers can copy the code and use it to build upon, you cannot copy the network, the hash power of the miners, the infrastructure of all the wallets, and all the companies that operate on the Bitcoin network, the Bitcoin brand, or the reputation the Bitcoin brand has earned in time. Here is a good metaphor to help you understand this: Imagine you give 2 actors the script to act out one of the scary scenes from the movie, The Shining. One actor, is Jack Nicholson, and the other actor is Kevin Hart. These are 2 very different actors, with different styles, and background experiences. Are they both going to perform that scene in exactly the same way, even though they are reading the same exact words? Of course not! Why? Because they are both unique individuals. (Now I'm wondering what The Shining would be like if Kevin Hart played it instead. Funny? Creepy? Lol. If you have never seen this movie, then put it on the top of your "Must Do's List).
Another noteworthy point is that despite the increasing number of new cryptocurrencies and blockchains that have been created, the market value of Bitcoin has not declined. In fact, it has performed the opposite, by increasing, despite all the downtrends, crashes, and bubble bursting comments and mainstream media FUD.
Here's a quick look at rough estimates of Bitcoin's market value over time:
July 2012: $7.63
July 2013: $75
July 2014: $640
July 2015: $300
July 2016: $658
July 2017: $2,634
July 2018: $6,537
With fiat, as more is printed over time, its value decreases. As you can seen from the above timeline, the overall value of Bitcoin has increased, despite the fact that today, there are way more cryptocurrencies and blockchains since 2012. Bitcoin and its blockchain were created in 2009, and Bitcoin's value back then was less than 1 penny! Over time, even the altcoins have also increased in value (like Etherium and Litecoin), despite the growing number of altcoins that have entered the market.
Is Bitcoin scarce? YES. Although there are other cryptocurrencies and blockchains besides Bitcoin that exist, a clone of the Bitcoin code is NOT a clone of Bitcoin. Bitcoin is in a class all by itself.
Do you think scarcity is a property that can be applied to Bitcoin? Would you also like to see a remake of The Shining with Kevin Hart? Let us know your thoughts in the comments.
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