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Intro

Bitcoin and other cryptocurrencies offer significant practical advantages in terms of temporal and spatial salability, reduced transaction costs, increased efficiency, and the potential to disrupt traditional financial systems, making them a strong contender for mainstream adoption as money.

1. Temporal salability refers to an asset's ability to maintain its purchasing power over time.
2. Spatial salability refers to the ease with which an asset can be transferred across long distances without significant losses in value

As the world becomes increasingly digital, the need for an innovative and efficient form of currency has led to the rise of cryptocurrencies like Bitcoin. These digital assets have been praised by the likes of Paul Tudor Jones and Stand Drunkenmiller for their practical advantages over traditional financial systems, including lower transaction costs, faster processing times, and the ability to disrupt the existing financial infrastructure.

Three critical factors contribute to Bitcoin's cultural resonance. Firstly, Bitcoin is inherently apolitical, indifferent to factors such as religion, race, ethnicity, language, or geography. As long as users are willing to pay the transaction fees determined by a free-market economy, the Bitcoin network will process transactions without discrimination.

Secondly, Bitcoin's fixed supply of 21 million BTC, guaranteed by mathematics and code, renders it a financial constant. This characteristic sets it apart from other economic systems prone to inflation, devaluation, and interventions like quantitative easing.

Finally, trust. Paradoxically, this trust stems from its design, eliminating the need to rely on others. Users only need to trust the open-source, transparent, and decentralized code, which can be accessed and inspected by any developer worldwide.

Bitcoin's simplicity and mathematical purity remove systemic complexity, minimizing the chances of failure. Its public ledger records all transactions, enabling peer-to-peer transactions without centralized authority for dispute resolution. This transparency makes the Bitcoin ledger a single source of truth that anyone can access.

Disruption of Traditional Financial Systems

Issues with the Legacy Financial System

• US money supply increased by 25% or $7 trillion since the pandemic
• Since 2020, the minimum reserve requirement for US banks is ~0.3%, meaning banks do not actually have anywhere close to the reserves/collateral needed to service all their loans
• If the $10T in outstanding US deposits suffered a bank run, FDIC’s own reserves could only cover 1.26% of that
• Government debt in the G7—the most economically advanced nations in the world—is the highest since WWII, at 128% of GDP

Additionally, aspects of the monetary system strike many as antiquated:

• ~1.5 billion people in the world still don’t have access to a bank account
• Sending money to relatives abroad costs ~6% of the full amount
• Money is digital, but banks still can’t settle a transaction on a Sunday

Below are some of the limitations of fiat money:

1. Fiat monies (government-issued money) can and do outright fail.
2. They possess bad store of value (SoV) properties - The U.S. dollar is designed to lose 2%+ of its purchasing power yearly, i.e., you lose 2% of your money just by holding it. In just the ~2 years post-COVID, the USD has lost ~10%+ of its purchasing power via “official” CPI numbers.
3. They are government-controlled, meaning they are confiscatable censorable, and do not provide you with full autonomy on how to spend it.
4. They enable very little privacy for the user and are easily surveilled. Money is one way in which governments control and oppress citizens.
5. Due to its dependence on intermediaries and middlemen, they are subjected to high transaction fees (remittances) and storing costs (bank fees and inflation).
6. Fiat money enables the Cantillon Effect, whereby the first people to receive the newly created money (banks) see their incomes and purchasing power rise relative to those further down the money-printing line. Think about a game of Monopoly wherein you were secretly gifted an extra $1,000,000. You would be at an extraordinary advantage due to the extra purchasing power, but also before the rest of the players could price your new money into the overall pot. 
7. Fiat is trust in governments and humans. Bitcoin is trust in math and cryptography.
8. The current economic system is designed to only work if the citizens constantly spend and the overall debt increases with time (high time preference vs. low time).
9. Fiat money supply is infinite, and those that create the money benefit the most (seigniorage).
10. You do not have full control or access to your money in a bank when storing it in a bank.

Beyond Bitcoin 

Platforms like Ethereum have the potential to significantly improve efficiency and reduce costs in security clearing and settlement processes. By automating transactions and allowing for 24/7/365 trading, final settlement can be achieved much faster than in traditional financial markets. By reducing transaction costs and increasing efficiency in cross-border transactions, cryptocurrencies can facilitate international trade and investment, promoting economic growth and development. The blockchain's inherent transparency and immutability also reduce counterparty and settlement risks, further enhancing efficiency.

Cryptocurrencies like Bitcoin can potentially increase financial inclusion by providing access to financial services for unbanked and underbanked populations. Cryptocurrencies' decentralized and borderless nature allows for easy and affordable access to financial services, regardless of geographic location or socioeconomic status.