Bitcoin has the extraordinary ability to securely hold value over time. Its deflationary properties and programmed issuance make it one of the world's most superior stores of value.
To be money, something must be a medium of exchange, a unit of account, and a store of value.
As a medium of exchange, it must be tradable for a multitude of things.
As a unit of account, it must be used as a measure of value for goods or services.
As a store of value, it must retain its purchasing power over time. That means you must be able to spend it or exchange it at a later date without penalty.
With a fixed supply of just under 21 million, bitcoin cannot be inflated. Not only will it retain purchasing power, bitcoin was designed to increase in value over time.
That’s because of bitcoin’s predictable issuance schedule and hard supply limit. No government or central bank can devalue, inflate, or manipulate bitcoin. These characteristics make bitcoin an excellent asset for saving and storing wealth.
When the Federal Reserve creates dollars out of thin air, it damages that currency as a store of value. And the inflation we see today is a result of this unrestricted money printing.
There's a reason why prices for goods and services are increasing. It's simply that the dollar is worth less. The more of them there are, the less they're valued. And it takes more of them to buy the things you need.
Other forms of money, for example gold, is easily confiscatable. On April 5, 1933, US President, Franklin D. Roosevelt, signed Executive Order 6102. It prohibited "the hoarding of gold coin, gold bullion, and gold certificates within the continental United States."
The Order required all persons to surrender their gold to the Federal Reserve in exchange for about $450 in today's dollars, per troy ounce.
Violating the order was punishable by a fine of up to $10,000, or up to ten years in prison, or both. And that $10,000 from 1933... would be the equivalent of $218,243 in 2022. In contrast, Bitcoin’s native security, encryption, and digital nature make it difficult to seize.
Bitcoin has a deflationary limited supply, is not easily confiscated, and is programmed to increase in value over time. And that makes bitcoin one of the best options we have today for saving money and storing wealth.
Death, Taxes, and 21 Million Bitcoin
There is a programmatically enforced hard cap of 21 million bitcoin.
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