Our money is broken

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What is Money?

Anything can be money, and some things are better at being money than others. Put simply, money has three functions: 
- Unit of account - which allows us to measure the value and make comparisons between goods and services. 

- Medium of exchange - It allows us to trade with one another because everyone accepts it as final payment. 

- Store of value - money should lower our time preference and allow us to save it so that we can spend it in the future and obtain more. With the best money, instead of buying a $1 can of pop today, we should be able to save that $1 to get 2 cans of pop in the future. 

 

What's the problem with our money today?
Although there are many problems with today's money, we're going to highlight two of the biggest problems.

1. Control - On the traditional path of the past, people would go to school and get a job. These people, just like you and I, work hard for their money. All that hard work results in regular people depositing money in banks...but when they ask to withdraw more than $10,000…they're interrogated and made to feel like a criminal. Have you experienced this? Has someone you know experienced this? Is this your money? No. When you agree to open a bank account, you sign an agreement with the bank that lends your money to them. They owe your deposits back, but it's legally no longer your money. It becomes a loan.

2. Scarcity - Scarcity is a very important characteristic of money, and we need money that is reasonably scarce in order for it to hold its value over time. The problem with today’s money is that it is not scarce. 22% of all Canadian dollars in circulation were printed between the years of 2020 and 2023. 1 in 5 Canadian dollars did not exist before 2020. If you think that's bad...the US printed 40% of all dollars in existence in 2020 ALONE. The money supply has nearly doubled in the past 3 years. Government money is not scarce, and consumers keep feeling the pain through inflation. 

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How does Bitcoin solve this?

15 years ago, someone saw the problems we’re talking about today, highlighted during the great financial crisis in 2008. This person, or group of people, had the initiative to come up with a solution. 

 

Bitcoin, on the surface level, is an asset, working on top of a network, secured by thousands of computers around the globe. It’s completely decentralized, meaning that no one person has the power to change the network or stop transactions. You no longer need to ask permission to own your money.

 

Here are two points that are extremely important to mention, which also explain why Bitcoin is the best money:

- Bitcoin is durable. As long as the internet exists, Bitcoin will exist. No one has the power to shut it down. It’s not stored on a phone, which can be lost or damaged. It’s stored on the most secure network in the world.

- Bitcoin is scarce. There will only ever be 21 million. This number was set in stone at Bitcoin's inception. Within the code, immune to any one person being able to change it, Bitcoin’s supply follows a definite production schedule until the last bitcoin is mined. Gold, in comparison, is scarce, but we don’t know exactly how scarce it is. We can only estimate how much gold has been mined, and how much is left. No one knows for sure.