The Case For Bitcoin

From cattle to precious metals to fiat money, the evolution of money has never stopped. Throughout history, homo sapiens have tried to come up with forms of money that were believed to be superior to previous forms of money. Bitcoin is the latest monetary revolution that our human species is experiencing. To understand the case for Bitcoin, one must understand the history of money.

When humans tried to come up with new forms of money to replace existing forms of money, they generally tried to solve a problem or flaw that existed with the current monetary system. Precious metals tried to solve the problems that existed within the barter system such as double coincidence of wants, lack of standard unit of account, and impossibility of division of goods, etc

While the precious metals currency system solved the double coincidence of wants and lack of standard units of accounts flaws that were found within the barter system, it still lacked some properties that humans wanted in money, as a result, paper money was invented. Paper money was often backed up by precious metals held in reserves of a central agency. While paper money offered more portability, ease of use, unit of account, and divisiveness of value than precious metals, it introduced new flaws to the system. Instead of people being in direct control of the currency, more control was given to central agencies like central banks who issued currency bills backed by precious metal reserves like gold.

Then came the fiat money, which intensified the flaws of paper money by taking more control away from the people and free markets and giving it to central banks. Fiat money removed the need of central banks to keep precious metals in their reserves to back up the currency, which allowed central banks to have greater control over money. In the fiat monetary system, central banks are able to control and manipulate the supply of money more than any previous monetary system.

You might be wondering now “Why is the author mentioning the barter currency system, precious metals, paper money, and fiat money rather than focusing on Bitcoin?”

Well, just like any other currency, Bitcoin was created to minimize flaws, and maximize the virtues of previous monetary systems.

So, what makes Bitcoin better than any other currency?

The following articles answer this question:

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