BaaMs - Bitcoin-as-a-Measuring-Stick

By Andrey Didovskiy | Aheadofcrypto | 19 Mar 2021


Pricing the World in Bitcoin

A very rudimentary dive into Bitcoin-omic stability.

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Stability is one of humanity's most elusive & desirable attributes. It is the certainty/guarantee that something completely predictable will happen in the future.

As it pertains to finance & economics, stability is sought for in price/value.

When we earn money we expect/hope that it will not lose its value. After all, in obtaining that money we traded our single most valuable asset, time. We can always make more money, but we cannot make more time.

However, as history has shown us when it comes to humans & finances, we just seem to have a difficult time establishing a stable universal unit of value. When we cannot find stability, we create it.

For millennia Gold served as the monetary backdrop for the world; it has acted as an object that people felt, more-or-less, comfortable storing wealth in. It was always known to be scarce While it has served as an excellent store of value previous, as the world transitions into a hyper-connected version of itself, the same properties that made gold a desirable asset are becoming the very same properties that now hinder its propagation as a tool for global trade/commerce. Heavy, bulky, expensive to secure & difficult to fractionalize. Even though gold was able to store value, it was not able to serve as a unit of measurement, we don't price our cars/mortgages/incomes/daily expenses in Gold.

Here comes Fiat. We couldn't find stability in gold so we moved to paper money. The assumption was that if we have an “intelligent” organization in charge of creating money then we will finally have stability. Most notably perhaps is the U$ Dollar (est. 1914). In 1944, as part of the Bretton Woods agreement, the US Dollar became the world's reserve currency; meaning that the world would denominate its economic activity in dollars/ the Dollar becames the metaphoric “measuring stick” of economic activity. So, if any government needed to do trade, such as Japan (JPY) → France(EURO) or Canada (CAD) → Australia (AUD) & everything in between, then the process of conversion would look like this:

This system of having the US dollar as an anchor worked until it didn’t. Due to global political tensions of power struggles coupled with ridiculous inflation, the US Dollar is losing its dominance & the world is losing its measuring stick.

Once again humanities efforts have shown themselves futile; not only is the reserve asset failing, but every government currency that has been created has either withered away over >90% of its value or totally ceased to exist.

So much for stability…With any Fiat currency, it is not a matter of IF, but WHEN, it fails what will people turn to?

 

Have no fear, circa 2009, Bitcoin is Here!

Bitcoin has been called a lot of things; good, bad & poisonous. Regardless of who thinks what about it, under the hood, Bitcoin is the most arbitrarily stable technological innovation.
No, not the asset/price; the technology.

Regardless of what Price bitcoin is trading on the market at any given time, we can with an extraordinarily high-level of certainty anticipate that the next block to appear in approximately 10 minutes. We also know that the next block will be appended to the existing chain & that a certain amount of Bitcoin(s) will be paid to miners.

Amplified by the most advanced military-grade encryption standards (SHA-256) alongside enormous electrical energy consumption (POW), Bitcoin becomes more than a network to transfer value; it becomes the most sophisticated tool by which we can timestamp & openly track the progression of socio-economic activity.

Bitcoin’s stability is found in its programmatic predictability.

 

The near-perfect predictability that Bitcoin provides the perfect anchor to replace the dollar as the world's reserve asset. Bitcoin is neutral in the sense that it is not susceptible to the political biases that plague existing fiat systems & trade can happen while being equally beneficial to all world participants.

Its inherent progressive linearity & decentralization offsets the potential counterparty risks of fiat systems. Sovereign Governments can remain sovereign & a more natural process of creating local mediums of exchange can take place.

 

It may seem distant now, but someday, you might be pricing your next house in Bitcoin, telling your friends how many satoshis you saved, & reading the Forbes Rich List according to their Bitcoin holdings.

To greater heights & better governance 🥂

 

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Andrey Didovskiy
Andrey Didovskiy

🌟 Crypto, Blockchain, DLT & being digitally Free 🌟 🌹 Met Bitcoin in the summer of 2014 — the rest is history 💎


Aheadofcrypto
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