Bitcoin Fixes This
It's a lot more than finances...
Introduction
The phrase "Bitcoin fixes this" has become a mantra within the Bitcoin community, reflecting a broad belief in Bitcoin's potential to address various systemic flaws not just in financial systems, but across a wide array of societal issues. This post explores ten diverse areas where Bitcoin could drive significant change.
1. Fighting Inflation and Monetary Devaluation
One of Bitcoin's fundamental fixes is its protection against inflation and currency devaluation. Unlike fiat currencies, which can be printed at will by governments, Bitcoin has a capped supply of 21 million coins, which advocates argue makes it a hedge against inflation. This intrinsic property mimics the scarcity and value preservation similar to gold - actually better than gold now and even better in the future, as shown in the chart below.
As investor and Bitcoin advocate Wences Casares notes, "Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer."
2. Banking the Unbanked
Bitcoin has the potential to extend financial services to the "unbanked" — people who lack access to traditional banking. By using Bitcoin, individuals in underserved or unstable regions can participate in global economies through just a smartphone and an internet connection. This accessibility could revolutionize economic participation in developing countries. It’s already happening.
3. Reducing Transaction Fees
Traditional cross-border payments and remittances often involve high fees, which can be burdensome for migrants sending money home. Bitcoin and other cryptocurrencies can drastically reduce these transaction costs as they do not rely on intermediaries like banks or payment processors. This efficiency could lead to more money in the pockets of those who need it most.
4. Enhancing Transparency and Reducing Corruption
The transparency of the Bitcoin blockchain could be a game-changer in fighting corruption and increasing transparency in financial transactions. Every transaction is recorded on a public ledger, making it harder for individuals or organizations to misuse funds without detection. This could particularly impact government spending and charitable organizations. Here’s El Salvador’s bitcoin wallet, for example:
5. Peace of Mind Amid Political Instability
In countries where hyperinflation has taken hold, such as Venezuela (where 10% of the population owns crypto as shown in the chart above), Bitcoin provides an alternative store of value. This can offer a stable economic foundation during political upheavals, potentially mitigating the worst effects of economic mismanagement by corrupt politicians.
6. Facilitating International Trade Without Fiat “Globalism”
Bitcoin can simplify and secure international trade by providing a universal, stable currency that avoids the complications of cross-currency exchange rates, slowness and legacy system transaction fees, not to mention the corruption embedded within fiat systems. This could encourage a new kind of global peer to peer economy, with smoother transactions and fewer financial barriers for businesses and individuals.
7. Improving Product and Service Quality
Bitcoin's inherent scarcity could fundamentally transform consumer behavior and business practices. With only 21 million coins ever to be mined, Bitcoin's limited availability might make consumers more cautious about how they spend their money. This heightened discernment is likely to translate into increased demand for higher quality products and services. Consumers, aware that their Bitcoins are precious, would prefer spending them on goods that offer better value and longevity rather than on inferior, disposable items.
On the other side, producers, eager to attract Bitcoin from cautious spenders, may find it essential to enhance the quality of their offerings. The drive to earn Bitcoin could shift the business focus from producing high volumes of low-quality goods to creating lower volumes of high-quality goods. This shift not only promises to improve the standard of products available in the market but also encourages sustainable business practices, as better-quality goods typically require fewer replacements and reduce waste.
This potential shift in economic dynamics from a quantity-focused to a quality-focused marketplace underscores Bitcoin's ability to influence not just financial transactions but also broader economic behaviors and values. An interesting and promising application of this concept in real estate is the Bitcoin Urbanism movement, described here by Tuur Demeester:
8. Impact on Food Quality
In a world where Bitcoin is a dominant currency, the principles of scarcity and value that guide its use could dramatically transform the agricultural sector. Bitcoiners, who often emphasize the importance of knowing where and how their products are sourced, might drive a significant shift towards locally sourced and naturally produced foods. As consumers become more cautious with their Bitcoin spending due to its inherent scarcity, there would be a heightened demand for food products that are not only of higher quality but also ethically produced and minimally processed. One example of this is the Beef Initiative, described here:
This demand would incentivize producers to focus on quality over quantity, encouraging more sustainable agricultural practices and reducing reliance on mass-produced, heavily processed foods. By using Bitcoin, transactions between local farmers and consumers could become more direct and transparent, reinforcing the value of personal connections—such as "shaking your rancher's hand." This directness not only supports local economies but also enhances traceability and accountability, ensuring that the food on the table is exactly what it claims to be, with no compromises in safety or integrity.
Thus, in a Bitcoinized world, the agricultural landscape could shift toward a system where the emphasis is on nutritional value and ethical production, aligning with a broader societal shift towards sustainability and health consciousness.
9. Shifting the Focus from Money to Time
Bitcoin advocates often discuss the importance of valuing time over money. The fixed supply of Bitcoin mirrors the finite nature of time, potentially encouraging people to think more about how they spend their time. This philosophical shift could lead to a society that places greater value on life experiences and personal growth and less emphasis on “chasing money / happiness in the rat race.”
10. Influencing Interpersonal Relationships and Social Constructs
The trustless nature of Bitcoin—whereby transactions do not require trust or even knowledge of the other party—could encourage a societal shift towards relationships and systems built on verifiable trust and transparency. This might lead to more straightforward and honest interactions in both personal and professional contexts.
Conclusion
Bitcoin is not just a digital currency; it's a multifaceted tool that has the potential to address numerous societal issues, from economic inequality to corruption, and from improving the quality of goods to enhancing personal interactions. By fostering a system built on finite supply, transparency, and accessibility, Bitcoin may well incentivize a societal realignment toward honesty and integrity. As noted by renowned Bitcoin advocate Andreas Antonopoulos, "Bitcoin is not just money for the Internet. It's a new Internet of money." In embracing Bitcoin, we may be paving the way for a more equitable, transparent, and efficient world.
Not financial or legal advice, for entertainment only, do your own homework. I hope you find this post useful as you chart your personal financial course and Build a Bitcoin Fortress in 2024.
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