Our Latest Blog Posts

Bitcoin 1

We have a problem… The US Dollar that we use to store our time and energy to buy the things our families need and want is intentionally designed to lose value. This is not an exaggeration, but a simple truth. Those dollars we work so hard to earn are losing value on purpose. This problem is called "inflation" and it is caused by a complex relationship between the US Treasury, the Federal Reserve Bank (Fed), and the US Federal Government. The result is we experience rising prices. The policies generated through this relationship create bad incentives for everyone. In an attempt to recover the value that was taken by inflation, we are constantly trying to catch up. This cultivates an entitlement mindset with a dependence on the government. In the end, we end up with a system that “favors” those closest to the source of money creation (referred to as the "Cantillon effect") but doesn’t work for anyone in the long run. And all of this is done by the Fed in the pursuit of managing the growth of the economy. And despite what some will tell you, inflation is NOT necessary to manage the economy. Buy now, pay A LOT later… The US Government spends vastly more than the tax revenue it brings in through taxes (called “deficit spending”). It must borrow money by issuing US Treasury bonds which the Federal Reserve Bank purchases along with other individuals, institutions, and foreign governments.  The larger portion purchased by the Federal Reserve Bank increases the money supply due to its special relationship with the US Treasury. US Treasury pays interest on this debt. When the debt comes due (matures), the Treasury rolls the old debt into new debt; increasing the interest expense.  All of the dollars spent by the Government in excess of tax receipts push more dollars into the economy; debasing the currency. This makes the individual dollars already in the hands of all of us purchase less than before due to higher prices thus causing inflation.  I am greatly simplifying this, but it is an accurate distillation of the problem.  This monetary system purposely siphons value away from ALL people GLOBALLY that use the US Dollar.  And everyone, regardless where how close to the source of the money, is incentivized to get as many US Dollars as they can with the least amount of effort.  The incentives of this legacy financial system are fundamentally broken.  A very old problem This isn’t a new problem. The US has been dealing with this ever since the US Dollar was removed from being "backed" by Gold. Without going too deep, once money was no longer limited to the amount of Gold in the possession of the United States Treasury, US Dollars lost its limitation on its supply.  Once that happened, we had to “trust” that the US Treasury and Federal Reserve Bank would not create too much additional money.   Source: https://satoshi.nakamotoinstitute.org/posts/p2pfoundation/1/#selection-15.11-15.23 History is littered with examples of breaches in that trust.  From Emperor Nero’s coin clipping which brought down the Roman Empire to President Nixon’s “temporary” suspension of the convertibility of US Dollars to Gold; those with the power to debase will eventually do so. Source: https://www.forbes.com/sites/briandomitrovic/2011/08/14/august-15-1971-a-date-which-has-lived-in-infamy/?sh=366243f2581a If granted the ability and there is a great enough crisis, the Government will break that trust and debase the currency under the guise of serving the greater good. Call it monetary inflation, currency debasement, or coin clipping; it erodes the value of money we all hold causing not only a loss of purchasing power but also all kinds of other downstream social and economic problems (To learn more go to wtfhappenedin1971.com ).  It is a problem that tends to lead to chaos, civil unrest, and potentially war. What we need is a trust-minimized monetary system based on rules without rulers.  A system that is transparent yet allows for privacy; absent a central authority that can change the rules or gatekeepers restricting access.  A system that is not subject to sudden and arbitrary debasement.  A system that is hard to change providing a solid foundation for the economy to coordinate trade. Good news…there is a solution It all starts with a good store of value. The solution is Bitcoin.  It exhibits the characteristics of a superior store of value better than any other asset in human history; including Gold and certainly government-issued currencies (also called "fiat").  The chart below compares the attributes of Bitcoin, Gold, and Fiat and indicates how each should perform as a store of value over the long term: Credit: Vijay Boyapoti, 2018 https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1 What is Bitcoin? Bitcoin is the soundest money ever created. It is the fastest system of Final Settlement as well as the most secure computer network ever created. This computer network is defended by a wall of encryption and energy. It cannot be forcibly debased nor centrally controlled by any government or institution. It is open source and verifiably transparent but also allows for pseudonymous privacy.  It allows participation to anyone with a minimum of a cheap mobile phone and an internet connection. Bitcoin is also an apolitical, stateless money that is open to anyone willing to play by the rules.  It is digitally scarce with a limited supply of roughly 21 Million Bitcoin with a predetermined release schedule. It is also easily divisible into smaller units called "Satoshis" or "Sats" for short. Bitcoin can and is currently being used globally including by people under authoritative regimes lacking access to traditional banking services. On the Bitcoin Network, ALL participants operate under the same rules regardless of nation of origin, social class, or financial means. Now what? First off, this is NOT investment advice, and do your own research. A suggested strategy is to buy an immaterial amount. Starting with a small amount, you can test wallets and interact with moving around value on the Bitcoin network. As your understanding and convention in Bitcoin grow, consider getting more.   In future posts, I will discuss how to buy as well as take self-custody of your Bitcoin. Self-custody is a CRITICAL step to fully realizing the true value of Bitcoin. Until then, stay humble and stack Sats! Source:https://satoshi.nakamotoinstitute.org/emails/bitcoin-list/23/ One more thing…. I HIGHLY encourage purchasing Vijay Boyapoti’s book “The Bullish Case for Bitcoin”.  It is an exceptional way to begin to understand Bitcoin.  It is more expansive than the original article available here (https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1), but still as approachable as the original long-form article.  His book can be purchased on Amazon and likely other sources. Also, I invite you to follow him on Twitter / X as well: {"url":"https://twitter.com/real_vijay","type":"rich","providerNameSlug":"twitter","responsive":true} --> https://twitter.com/real_vijay Block height when written: Bitcoin Block information is provided using: https://timechaincalendar.com/en Disclaimer This article is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice and do your own research.