The real value of Bitcoin and the Dollar

Greetings UCommunity, Bitcoin today is not what is was ten years ago. Back then it was worth a few cents, today it is worth a few thousand dollars. So it’s the same in quality but not the same in quantity or value. That’s obvious, yet is still a subtle difference. Similarly the dollar today is not the same as a dollar 100 years ago. And that makes all the difference.

We value Bitcoin in dollars, and the value is increasing. However, the value of the dollar is decreasing, thanks to inflation based on a corrupted monetary system operated by the Federal Reserve Bank of America. So how much is a Bitcoin really worth? It’s hard to place a value in real terms because the entire value system is based on a fraudulent foundation of the dollar.

Nevertheless, Bitcoin is growing at a much faster rate than the dollar is sinking, at least in Bitcoin’s ten year lifespan so far. To think that the dollar has lost 95% of its value, or purchasing power in its lifetime, or around the past 100 years roughly, is often overlooked by many. For example, in the 1900 you could buy the best pair of new shoes on the market for $1, and the US money supply stood at $7 billion. https://www.visualcapitalist.com/buying-power-us-dollar-century/ Today you can probably buy the lace for the shoe for $1, and the US money supply is $13,291 billion. In other words there are 1900x more dollar in circulation today compared to 120 years ago. That is not a healthy economic system.

When Nixon took the dollar off the gold standard in the 1970’s inflation really spiralled badly, and in that decade the dollar lost 1/3 of its value. Bitcoin is the same space of just ten years now, has gained 100 000% in value. So to think that fiat money is a better and safer long term store of value is just uninformed. The math does not lie.

You may say that the dollar has an entire country backing it, with a large military force to ensure it, but that didn’t help in the seventies, did it? And after all, it’s the Fed who runs the show when it comes to the dollar, and the Fed are a private company run by some elite modern day aristocracy who are beyond the law. They make up the rules as they go along and the USA with all its military might, has to bow down and follow their dictates.

So the world is beholden to the US dollar and the US is beholden to the Fed, a private bank run by a few people. I won’t go into who those people are, this is not a political or “conspiracy” discussion, merely an economic and mathematical one. Although you can find out easily enough if you’re interested to know who is really running the planet today in the guise of America.

Since the massive inflation of the dollar in the seventies, it just kept snowballing each decade, as the money supply tripled in the eighties, just less than doubled in the nineties, but then almost tripled again in the naughties, the first decade of the 21st century. Bitcoin on the other hand can never fall into this trap because it is limited to 21 million. Already almost 18 million are mined and in circulation. So, like gold, it is limited in quantity and therefore on the road to becoming more deflationary by the day, the very opposite of the dollar.

One day when the dollar crashes we may have to find another way to value a Bitcoin. The dollar value may become meaningless, like valuing it in Venezuelan Bolivar, for example. We would do well to value it against other valuables instead, like an ounce of gold, or by the purchasing power it has. Just like we did the dollar at the intro. You could buy a top quality pair of shoes once for that same dollar. Similarly you could buy two pizzas a decade ago for 10 000 Bitcoin. Today you can buy a car, for example.

So value is all relative. It is based on what someone is willing to pay for it on the day. That is what makes Bitcoin admittedly so volatile still. It is still finding its true value. Buyers and sellers are still negotiating, and this will go on through the Hard Fork in Mat 2020, where the mining reward gets halved and the dynamics and the math shift, as designed by Satoshi Nakamoto.

In years to come, as we approach the 21 million Bitcoin mined, price will stabilize, though that is in many decades to come theoretically. By then there is no reason – best case scenario – that Bitcoin can’t be worth $1 million. Gold is certainly undervalued, along with silver. Also their prices are being deliberately manipulated or suppressed by insiders in the financial world. So if you traded all your dollars for Bitcoin today, regardless of current price, you will undoubtedly make massive gains, particularly since the trajectory of the two are going in diametrically opposing directions. That’s why experts say the best time to buy Bitcoin is ...now.

#bitcoin #economics