Bitcoin — Quality control tool
Have you ever bought a product of such poor quality that it broke or stopped working the same day? And warned your friends and family never to buy it?
When we think about why these bad experiences happen to us, we usually attribute the causes to our “bad luck” in choosing the wrong product; to the fact that we just had a bad day, or that the employee in charge sold us something broken on purpose, but we hardly associate it with a systemic problem.
In this article, we intend to open up that perspective. We decided to investigate the system of incentives to which both consumers and manufacturers are subjected, and what are the consequences of day-to-day consumption and production decisions.
In the First World Countries, the problems described may not be as easy to discern as in the Third World countries. The reality is that there are different quality standards designed for each market; for example, buying the same brand product in Germany and Argentina is totally different since the producer manufactures them with a certain quality for a specific market and a very different one for the other. At first glance, this does not seem to make much sense at the production level since different materials and manufacturing processes require diverse production chains, and this adds costs and frictions of all kinds. However, this still happens.
When comparing, you will soon realize that the quality of the final product is closely related to the quality of the market’s currency towards which that product is directed, more specifically, to the purchasing power of that mentioned currency, even if the product has been manufactured on the other side of the world. This implies that markets with devalued currencies of low purchasing power are forced to consume poor quality or defective products. In contrast, those with comparatively strong and more stable currencies receive the best products.
In the current inflationary context, in which all fiat currencies are losing purchasing power year after year (in some countries, day after day), the consumer’s incentive is to use that money as quickly as possible before it loses value, so they can no longer buy what they wanted, although in many cases they don’t even need to purchase anything! The urgency is to use the money before it loses value. That’s why inflation encourages immediate consumption of whatever, regardless of whether we buy good or bad quality stuff. The point is to get rid of the fiat money as soon as possible!
This is good for manufacturers since it represents more sales. Hence, the incentive is to produce a lot of products as quickly as possible, without paying too much attention to its quality, all in all, as it sells the same! This creates a vicious circle of mass consumption of junk products that unfortunately has a terrible environmental impact.
If we keep up the same consumption, production, and waste for a few more decades, we will end up creating environmental, economic, and social chaos of unimaginable dimensions.
Fortunately, with the invention of Bitcoin, Satoshi Nakamoto has brought up the new global network and monetary asset, which is now, little by little, changing the course of that part of human history.
Few perceive it yet, but having a hard money system, impossible to inflate outside the pre-established parameters, borderless, and censorship-resistant, is disrupting the entire economic and financial system of today’s world and is putting the incentives in the right place, to turn the vicious circle of fiat currencies imposed by national governments into a virtuous circle of global money with limited and scheduled issuance and voluntary use.
This is a massive disruption, and we still can not fully understand it. But this article focuses only on Bitcoin’s positive consequences to the economy by setting the trends towards a healthier and more environmentally friendly consumer society.
Unlike fiat money, Bitcoin does not lose purchasing power year after year, but quite the opposite. Throughout its few years of existence (13), we have seen its price go from zero in 2009 to more than 45 thousand dollars per unit at the time of writing this article. This increase in the price of Bitcoin is closely related to the perception of the value that people assign to their possession, since little by little, they begin to understand that owning the asset, that anyone can move around the world without restrictions; nobody can easily confiscate or steal; people can exchange it for virtually any fiat currency of the world, and you can even make instant payments to any person or company on the planet without anyone stopping you.
All this, plus some other perhaps even more important features, gives Bitcoin more value every day, reflected in its growing price.
Those who hold Bitcoin know very well that their coins may be worth more in the future, so the biggest incentive is to save (HODL). On the other hand, life goes on, and we need to satisfy our personal needs and wishes as usual. Still, having your savings in Bitcoin, does not require buying anything quickly. Rather our purchases have to be well thought out and we only buy products that assure great value, good quality, and durability because, in exchange for those, we will be spending our precious and appreciating Bitcoin!
On the manufacturer’s side, the incentive is now to make products of the highest quality and possible durability since that will attract the consumer of the new Bitcoin age. The industry must carefully select raw materials and production processes that comply with the highest quality standards to satisfy a demanding market unwilling to waste their precious coins on crappy products.
In short, Bitcoin encourages sound, highly competitive, and excellent quality markets that will most likely result in a much healthier and more harmonious environment.
At Hodl Hodl, we are aware of this evolutionary development towards a better and more dynamic monetary, economic and financial system, so we are committed to providing the necessary tools to help build this ecosystem designated to put the world back on the right track!
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