The bitcoin standard: A rising economy.

After years of expectation, Bitcoin spot ETFs are now a thing. Top tier investment firms can now offer Bitcoin to millions of customers as a financially relevant asset. The first ETF trading day has delivered an impressive $4.5 Billion in trading volume. We could be primed for an interesting year!
In case you ever make it to El Salvador, your bitcoin is all you need to get a coffee at the restaurant. The barista will thank you, no, seriously. As if they are living in the pre-fiat times, your coffee might be priced in bitcoin. Not just the central American nation, there’s been a wave of positive news about cryptocurrencies coming from government press releases. Bitcoin is currently legalized in war-torn Ukraine. When the heat settles and life returns to normal; you can have a meal in Kyiv and tip the lady some Satoshis.

Being handed millions of dollars in cryptocurrencies via donations, Ukraine nets a tangible advantage in its conflict with Russia. In addition to the financial reinforcement this could bring, cryptocurrencies offer a more efficient financial system relative to the traditional system. For a government thrown into war, an ‘unblockable’ means to exchange value comes in handy. Cryptocurrencies’ underlying technology makes for the most flexible exchange. Devoid of third parties and powering universally acceptable stores of value, it’s actually meant for turbulence.

In 2021, the USA announced its “First ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology”. These policies principally recognize the position of digital assets in the global economy and the risks accompanying this space for both individuals and (national) institutions. This policy is thus an attempt on a national level to protect both institutional and individual role players in this space.

In the same vein United Arad Emirates’ Flamboyant emirate – Dubai, also announced the creation of a regulatory and licensing authority. An independent authority to oversee the development of the best business environment in the world for virtual assets in terms of regulation, licensing, governance, and in line with local and global financial systems.

These waves of adoption create thoughts of a world where bitcoin doubles as a currency and a competent store of value. Unlike the current fiat system, bitcoin has shown a long-term value rise.

Bitcoin’s fixed supply is regarded as a fix for inflation. And that works excellently. The global economy is riddled with unregulated inflation. Millions are printed regularly, just like the tether machines. Seriously, the tether system depicts the global economic system to a large extent. Bitcoin cannot grow in total supply; circulating supply may vary as a couple of million bitcoins remain unmined and thousands of bitcoins are being lost to mismanagement and accidents. Instead of growing in total supply; bitcoin can only grow in the value we have seen this play out very well.

Bitcoin’s technology flaunts generality and portability. If you’re not running a bitcoin core node, you just need a lightweight application to manage your financial activities. While this is convenient in the normal sense, it is not without certain shortcomings. Regardless, this shifts the power to the users in contrast to the current system where the ‘managers’ in the custody of your assets hold the upper hand, decentralization and ‘personalization’ put you in charge, a concept growing in acceptance in our contemporary world. In this case, bitcoin offers what the current generation longs for. Superior? Yes; bitcoin wins over traditional systems here.

Bitcoin’s generalized value creates a global value system and a uniform currency. But how healthy is this? It is hard to say what a currency backed by a globalized financial system will look like, but if bitcoin succeeds at becoming one, then it will be an exciting experience.

Personally, I don’t buy the idea, a financial system of this nature is largely unsustainable. The segregation of national economies serves a good purpose itself. Placing different countries in charge of their own financial success isn’t bad, at all. Bitcoin’s generality contests this.

A rising economy, one guided by an inflation-resistant medium of exchange. Not necessarily bitcoin. A decentralized financial system owned by the people and furnished by consensus. The rest of the world is slowly accepting the mainstay of digital assets and centralized giving way for decentralized financial solutions to play a role in their government. One after the other, the new world standard continues to emerge. Even if bitcoin doesn’t completely replace the fiat system, existing together is a huge achievement for a once-obscure concept.

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