According to Satoshi Nakamoto’s white paper “Bitcoin: A Peer-to-Peer Electronic Cash System,” published in 2008, Bitcoin was designed in reaction to faults in the traditional financial system. The major objective for Nakamoto was to create a decentralised digital currency that runs on a peer-to-peer network, eliminating the need for intermediaries such as banks or governments. Bitcoin seeks to enable secure, transparent, borderless transactions while addressing concerns about the “double-spending problem” (in which the same digital token is spent multiple times).
Regardless of your position on Bitcoin, it’s difficult to deny that it hasn’t been a flaming success and has probably blown up more than Nakamoto ever imagined. For example, the first known exchange of Bitcoin for dollars occurred in late 2009, with one Bitcoin valued at $0.00099. Today, that figure has risen to $35,000 per coin, and if Bitcoin were a company, it would rank among the top ten in terms of market capitalization ($668B USD). Today, we will do our best to present objective arguments and statistics in support of Bitcoin as a money or store of value:
Arguments in Support of Bitcoin as a Currency
Bitcoin supporters emphasise the currency’s ability to disrupt the established banking system. They contend that Bitcoin transactions are faster, cross borders, and have lower transaction fees than traditional banking systems or international money transfers. Citizens in hyperinflationary countries are increasingly utilising Bitcoin as an alternative money, according to evidence. Did you know Bitcoin’s price has reached an all-time high in comparison to three hyperinflationary countries? (Nigeria, Turkey, Argentina) This is impressive given that Bitcoin is still far from its all-time high of $69,000 versus the US dollar.
Arguments for Bitcoin as a Store of Value
Bitcoin supporters say that it functions similarly to gold as a store of value. Bitcoin’s advantages include its limited supply (only 21 million coins will ever exist) in comparison to traditional currencies, which may be manufactured in endless quantities, resulting in inflation. Proponents further say that the scarcity of Bitcoin and the decentralised nature of blockchain technology make it a trustworthy store of value. Despite geopolitical tensions, widespread global inflation, and market volatility, Bitcoin is up more than 100% in 2023. Bitcoin has previously not only survived, but thrived in conditions such as the 2008 Global Financial Crisis and the 2020 Covid-crash. Bitcoin and gold (both widely regarded as the primary store of wealth) have decoupled from equities markets and gained gains in recent months.
The Bitcoin bull run is about much more than the hoopla surrounding a prospective ETF approval. Bitcoin is becoming more than just a trading vehicle; it is also becoming a real-world currency and a store of value.