4 Advantages That Make Bitcoin A Credible Alternative To The Current Monetary System
The future will tell us if these advantages of Bitcoin will be sufficient.
Bitcoin has come a long way since its creation by Satoshi Nakamoto in early 2009. Indeed, who could have imagined at the time that Bitcoin would be the most successful asset of the next decade. Probably no one and not even Satoshi Nakamoto himself. Despite the recent price of Bitcoin at around $7,000, Bitcoin is still the best performing asset of the last 11 years.
The success is such that more and more Bitcoin supporters come to believe that their cryptocurrency will actually replace the current monetary system in the future. Given the success of Bitcoin so far, the people who call them sweet dreamers are taking big risks in my opinion.
Only time will tell whether Bitcoin’s supporters are right or wrong. In the meantime, I propose that you revisit the 4 fundamental advantages of Bitcoin compared to the current monetary system. It is these 4 advantages that make Bitcoin a credible alternative to this system.
1. Bitcoin Has No Leader Or Owner
Satoshi Nakamoto created the Bitcoin but he chose to erase himself by remaining anonymous. Bitcoin is simply his gift to humanity. Thus, the leader has no leader or owner.
Bitcoin belongs to all the inhabitants of the Earth.
All this makes Bitcoin clearly universal. The absence of a leader makes Bitcoin clearly unstoppable. Indeed, politicians and regulators in the major developed countries have no one to pursue to slow the growth of Bitcoin.
This lack of a single leader for Bitcoin forces the community to find consensus to evolve the underlying technology.
Bitcoin is therefore a democracy where all users have the same weight. We are here a few light years away from our current democracies in which most citizens have lost confidence.
It must be said that the annoying habit of central bankers to create more and more money by turning the banknote printing plate is enough to leave you perplexed and to make you lose complete confidence in the current monetary system.
For many, central bankers are responsible for the great disparities in wealth in today’s world. The current monetary system is broken and does not seem to be repairable as it stands.
2. Bitcoin Is A Permissionless System
Money creation is the preserve of central bankers in every major developed country. The decision to create more and more fiat currencies is theirs and the people have no say in the matter.
The people no longer want to be left out of decisions that further devalue their money.
Unfortunately, the current monetary system is not designed to give the people the opportunity to express their opinions on major decisions taken by central bankers.
On the other hand, Bitcoin is a permissionless system open to all.
Anyone can choose to participate in the Bitcoin Blockchain. There is no need for special permission. To do this, you must simply download the Bitcoin Blockchain whose source code is open source.
Once the Bitcoin Blockchain is installed on your computer, you can become a network node and participate in the validation of Bitcoin transactions. You become a miner of the Bitcoin Blockchain and you can try to get part of the famous reward given to miners validating a block of transactions.
Of course, with a simple computer, your chances are more than reduced given the computing power you now need. Nevertheless, nothing prevents you from setting up your own mining farm, for example, because Bitcoin is open to everyone.
3. Bitcoin Is Decentralized
Before I talk about the advantages of Bitcoin decentralization, I will ask you a question about the money you have in your bank account:
Can you dispose of the money stored in your bank account as you really want without any control from your bank?
Although many tend to believe that the answer to this question is yes, the truth is that banks have a right to control the money they keep for you.
Indeed, a bank can block some of your transactions or close your account at any time if it decides in a totally arbitrary way. The bank will also provide the tax authorities with information on all your banking transactions.
Of course, you have nothing to hide. However, why couldn’t you be entitled to confidentiality and dispose of your money as you wish?
With Bitcoin, this problem does not arise. When you buy Bitcoins, they are really yours. You can use it as you wish because no one will be able to prevent you from making transactions on the Bitcoin Blockchain.
Bitcoin decentralization allows you to enjoy your Bitcoins the way you want.
Bitcoin thus gives back the power to its users. A mass adoption of Bitcoin by the general public as an online payment system would thus enable the people to regain control over the monetary system and regain confidence in it.
This gives you a better understanding of why politicians in the major developed countries have a deep aversion to Bitcoin: they are simply afraid of losing their power, which they abuse all the time.
4. Bitcoin Is Transparent And Fully Verifiable By All
The Bitcoin is based on a Blockchain whose operation has been detailed by Satoshi Nakamoto in his white paper “Bitcoin: A Peer-to-Peer Electronic Cash System”. In addition, the Bitcoin source code is open, which means that any developer can retrieve it and study it to check how the Bitcoin works inside.
The Bitcoin Blockchain is transparent which makes it totally verifiable by anyone.
All Bitcoin transactions are freely accessible within the Bitcoin Blockchain whose account book is a real open book. All this allows Bitcoin users to have complete confidence in the system they are using.
The power of Bitcoin therefore lies above all in the confidence that users have in the power of its technology.
On the other hand, the current monetary system is built on a trust acquired by the government. This power given to politicians through democratic elections is then widely abused and there is no longer any safeguards to allow the people to keep control.
A mass adoption of Bitcoin would constitute the takeover of a new type of monetary system based on genuine trust.
As we arrive in 2020, no one can say with certainty whether Bitcoin will be able to replace the current failing monetary system in the future. In 2009, no one was also able to predict that Bitcoin would be the best performing asset of the next decade. And yet the facts have spoken.
Created by a single man, Bitcoin today has a market capitalization of more than 130 billion dollars, which would already make it a member of the Top 60 richest countries in the world. Everything is therefore possible with Bitcoin and the future could hold surprises for its detractors.
The current monetary system, built on an outdated hierarchical and permissioned system, is clearly flawed and unsustainable. With its decentralized, transparent and permissionless technology, Bitcoin could very well be a response to the failure of this system by putting the notion of trust back at the heart of a new system that would benefit the greatest number of people.