What does that really mean? Let me explain, but first take a look at the below chart:
Notice anything?
Scenario #1 - The bitcoin ownership pie chart isn't subject to change. The fact that bitcoin is a finite asset with a fixed supply makes it unique. With Bitcoin you know the size of the pie, it is capped at 21M. For illustrative purposes, in the example above, if you were to buy 10.5M BTC you would own 50% of the network. You will always own 50% of the network. You don't have to worry about inflation and your relative purchasing power decreasing over time. In fact, as some people lose access to their coins (lost private keys) it is likely your share of the pie would actually increase.
Now let's look at Scenario #2 - an individual participating in the fiat monetary system. This individual is subject to losing their share of the overall pie as the money supply increases. Why is the money supply increasing? Governments and central banks are able to print money without limit in order to support their debts and deficits. The above graph is a simplistic way to visually show how you lose your purchasing power. Again for illustrative purposes, If a government decides to increase the monetary supply by over 150%, you can expect to have your share of the pie decrease from 50% to 20% (assuming in the base case scenario you already own 50% of the fiat wealth). This is why you feel poorer during periods of high inflation.
Take a look around: Who is getting wealthier and who is getting poorer in this inflationary environment?
Those who invested in hard assets (like bitcoin, equities or real estate) are seeing their net worth grow in fiat terms; however, those who have debts with no assets lose because their “savings” get wiped out. Their purchasing power deteriorates as assets and overall prices increase. This is the vicious debt cycle that so many individuals have no chance of ever escaping.
The government’s control over our money is causing the wealth gap to grow wider each year. With Bitcoin, no one entity is in control. It’s decentralized.
Bitcoin is the greatest store of value created for many reasons The 21M supply cap is one of them. No other financial instrument can claim to be so completely immune to inflation, devaluation or manipulation by governments. The 21M cap is in the code. To change the code in an attempt to increase the supply would require everyone to agree on a new higher amount. The problem is no one in their right mind would do this because by increasing the supply you would decrease the value of your bitcoin holdings. Talk about properly aligned incentives!
As a reminder, each bitcoin can be subdivided into 100M individual units called a “Satoshi” . There will be 2.1 quadrillion satoshis in total.
To summarize via a simple formula:
$1 USD = ($1 USD / infinite money supply) - $30 USD Trillion of debt
Vs.
1 BTC = 1 BTC / 21M
The choice is yours, choose wisely!
HODL
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