The future has always been unpredictable, but these current times of accelerating change and uncertainty bring a heightened sense of unease about what tomorrow brings..One of the most impactful factors driving change and unease is money. The Bank of Canada announced last week the key overnight rate will remain paused at 4.5% after eight consecutive rate hikes in the past year..This is part of the game of Modern Monetary Theory (MMT) — manipulating monetary policy in an attempt to balance prices and employment with disregard for budgets or paying down the national debt..MMT proponents don’t necessarily agree with Justin Trudeau on the budget balancing itself. Instead they argue the budget doesn’t need to be balanced and deficits aren’t necessarily bad. This is because a government that issues its own currency can spend as much as it wants without the need to borrow or tax in order to finance its spending. They can, after all, just create more money..It’s important to remember this approach to monetary policy and government spending is relatively new compared to the long history of money, and we don’t fully understand the consequences..Money, in one form or another, has been among the most significant and misunderstood catalysts of societal change for thousands of years. The essential role it's played in building prosperity, fueling wars and chronicling the rise and fall of empires is often underappreciated..Most simply, money is the language of value; a technology used to transfer value between people, across space and forward through time. It is relied on by individuals, corporations and nations as a unit of account, means of payment, and a store of value..The Canadian dollar and other fiat currencies around the world have failed to be reliable stores of value over time, a reality spawned by the phase out of the gold-standard, amplified in recent decades by factors like excessive government spending and Modern Monetary Theory..Looking abroad, we can see cases of hyperinflation becoming more common. Argentina, Venezuela, Lebanon, and Nigeria are just a few recent examples. The Canadian dollar is comparably strong, but will that always be the case?.When a government has maximized the value they can extract through taxation — everything from cannabis to carbon — they rely on the covert tax of inflation to finance spending through the creation or printing more money..Whether the dollars are being spent on inconvenient economic realities or ideological initiatives, the value is being extracted from the purchasing power of those holding dollars..This has brought the word 'inflation' into the mainstream as Canadians, many of them struggling to make ends meet and maintain their standard of living, receive a daily reminder via grocery bills and gas prices..Canadians are waking up to just how much of their wellbeing rests on the decisions of a small group of politicians and bureaucrats. This is the disconcerting risk of centralization. This risk that would be significantly compounded by the successful implementation of a Central Bank Digital Currency..Without an alternative to this system, citizens would be stuck on a path to every increasing financial oppression..Thankfully, Bitcoin fixes this..Bitcoin is both a savings and payments technology, but as Canadians we're most immediately interested in the savings technology. As a decentralized and digital currency, Bitcoin operates independently of traditional financial systems and is not subject to the risks caused by trust in central planners..There is no central authority or group of insiders who can change the foundational rules of Bitcoin. No politicians, no CEO and no unelected international organizations. Bitcoin consists of rules without rulers. One of the most important rules of Bitcoin is there will not be more than 21 million bitcoin in circulation. Bitcoin isn’t just scarce, it is the first absolutely scarce asset we’ve ever known..For thousands of years, gold has been reliable, sound money and remains relatively scarce but it falls behind bitcoin in the characteristics of sound money. This is most notably the case for portability: Gold is heavy, difficult to transport safely and impractical for daily use..Managing custody and using gold in transactions is inconvenient at best and often implausible. To address this issue in the past, paper money was relied on as vouchers for gold held with centralized custodians. This started a long and slow transition to the problem we are trying to solve..Bitcoin is designed to succeed where gold has failed. It combines sound money principles with modern technology. It's weightless, borderless, and can be sent around the world at the speed of light. It can be stored in software, hardware, on paper or in a person’s memory. The tools to make bitcoin more accessible and easier to use are improving everyday. Which of them will become as widely used as our favourite apps is yet to be decided..While gold will likely find a new all time high in dollar value in the near future, it is not a viable solution to the problem of centrally planned money and it will not absorb most of the value, leaving the legacy financial system..What about other cryptocurrencies, NFTs, or Web3 projects? Like all world changing inventions, the rapid success of Bitcoin spawned an entire industry of copycats, imitators and innovators. There have been tens of thousands of altcoins, tokens and projects. Many no longer exist..The worst of them are elaborate scams designed to enrich their creators. The best of them are highly speculative and risky places to hold wealth over time..Even the largest altcoins with the most market traction suffer from centralization risks that rival the legacy financial system. Even with a detailed roadmap, endless funding and well-intentioned teams, these projects cannot repeat the organic decentralization that Bitcoin started in 2009 to become trustless money. Some projects may perform well over certain time frames, but none of them are a reliable savings technology or a safe option for future-proofing your money..After 14 years, Bitcoin is still early in its adoption curve and the price is volatile over shorter periods of time. Over longer periods of time bitcoin has proven to be the most reliable savings technology. It is likely that this trend continues as adoption and knowledge continue to scale..Education is after all, the most significant obstacle preventing the average person from participating in and benefiting from Bitcoin. Making the choice to take steps toward learning about Bitcoin could end up being the choice between financial sovereignty or financial slavery..The choice is open to everyone and it is not too late..Disclosure: Bitcoin Well is an advertiser with the Western Standard
The future has always been unpredictable, but these current times of accelerating change and uncertainty bring a heightened sense of unease about what tomorrow brings..One of the most impactful factors driving change and unease is money. The Bank of Canada announced last week the key overnight rate will remain paused at 4.5% after eight consecutive rate hikes in the past year..This is part of the game of Modern Monetary Theory (MMT) — manipulating monetary policy in an attempt to balance prices and employment with disregard for budgets or paying down the national debt..MMT proponents don’t necessarily agree with Justin Trudeau on the budget balancing itself. Instead they argue the budget doesn’t need to be balanced and deficits aren’t necessarily bad. This is because a government that issues its own currency can spend as much as it wants without the need to borrow or tax in order to finance its spending. They can, after all, just create more money..It’s important to remember this approach to monetary policy and government spending is relatively new compared to the long history of money, and we don’t fully understand the consequences..Money, in one form or another, has been among the most significant and misunderstood catalysts of societal change for thousands of years. The essential role it's played in building prosperity, fueling wars and chronicling the rise and fall of empires is often underappreciated..Most simply, money is the language of value; a technology used to transfer value between people, across space and forward through time. It is relied on by individuals, corporations and nations as a unit of account, means of payment, and a store of value..The Canadian dollar and other fiat currencies around the world have failed to be reliable stores of value over time, a reality spawned by the phase out of the gold-standard, amplified in recent decades by factors like excessive government spending and Modern Monetary Theory..Looking abroad, we can see cases of hyperinflation becoming more common. Argentina, Venezuela, Lebanon, and Nigeria are just a few recent examples. The Canadian dollar is comparably strong, but will that always be the case?.When a government has maximized the value they can extract through taxation — everything from cannabis to carbon — they rely on the covert tax of inflation to finance spending through the creation or printing more money..Whether the dollars are being spent on inconvenient economic realities or ideological initiatives, the value is being extracted from the purchasing power of those holding dollars..This has brought the word 'inflation' into the mainstream as Canadians, many of them struggling to make ends meet and maintain their standard of living, receive a daily reminder via grocery bills and gas prices..Canadians are waking up to just how much of their wellbeing rests on the decisions of a small group of politicians and bureaucrats. This is the disconcerting risk of centralization. This risk that would be significantly compounded by the successful implementation of a Central Bank Digital Currency..Without an alternative to this system, citizens would be stuck on a path to every increasing financial oppression..Thankfully, Bitcoin fixes this..Bitcoin is both a savings and payments technology, but as Canadians we're most immediately interested in the savings technology. As a decentralized and digital currency, Bitcoin operates independently of traditional financial systems and is not subject to the risks caused by trust in central planners..There is no central authority or group of insiders who can change the foundational rules of Bitcoin. No politicians, no CEO and no unelected international organizations. Bitcoin consists of rules without rulers. One of the most important rules of Bitcoin is there will not be more than 21 million bitcoin in circulation. Bitcoin isn’t just scarce, it is the first absolutely scarce asset we’ve ever known..For thousands of years, gold has been reliable, sound money and remains relatively scarce but it falls behind bitcoin in the characteristics of sound money. This is most notably the case for portability: Gold is heavy, difficult to transport safely and impractical for daily use..Managing custody and using gold in transactions is inconvenient at best and often implausible. To address this issue in the past, paper money was relied on as vouchers for gold held with centralized custodians. This started a long and slow transition to the problem we are trying to solve..Bitcoin is designed to succeed where gold has failed. It combines sound money principles with modern technology. It's weightless, borderless, and can be sent around the world at the speed of light. It can be stored in software, hardware, on paper or in a person’s memory. The tools to make bitcoin more accessible and easier to use are improving everyday. Which of them will become as widely used as our favourite apps is yet to be decided..While gold will likely find a new all time high in dollar value in the near future, it is not a viable solution to the problem of centrally planned money and it will not absorb most of the value, leaving the legacy financial system..What about other cryptocurrencies, NFTs, or Web3 projects? Like all world changing inventions, the rapid success of Bitcoin spawned an entire industry of copycats, imitators and innovators. There have been tens of thousands of altcoins, tokens and projects. Many no longer exist..The worst of them are elaborate scams designed to enrich their creators. The best of them are highly speculative and risky places to hold wealth over time..Even the largest altcoins with the most market traction suffer from centralization risks that rival the legacy financial system. Even with a detailed roadmap, endless funding and well-intentioned teams, these projects cannot repeat the organic decentralization that Bitcoin started in 2009 to become trustless money. Some projects may perform well over certain time frames, but none of them are a reliable savings technology or a safe option for future-proofing your money..After 14 years, Bitcoin is still early in its adoption curve and the price is volatile over shorter periods of time. Over longer periods of time bitcoin has proven to be the most reliable savings technology. It is likely that this trend continues as adoption and knowledge continue to scale..Education is after all, the most significant obstacle preventing the average person from participating in and benefiting from Bitcoin. Making the choice to take steps toward learning about Bitcoin could end up being the choice between financial sovereignty or financial slavery..The choice is open to everyone and it is not too late..Disclosure: Bitcoin Well is an advertiser with the Western Standard
