Cryptocurrencies are hard to understand. The most common misconception is not one about the technical functionality of a blockchain but rather of the very root cause of the invention. Why Bitcoin was invented rather than how it works. Why every historical event in Bitcoin matters, what they mean and what long-term effects they will have in regard to reaching the intended purpose of the invention. Bitcoin was invented right after the huge financial meltdown of 2008. It was an attempt to create sound money, i.e. money that can’t be counterfeited or tampered with in any way by anyone. Inflation free money. There will only ever be 21 million Bitcoin in the world and this, only this, is what the blockchain was designed to ensure.
Another misconception is that if a new world currency were to emerge it would somehow have to be distributed more or less equally between countries or citizens. This is at best naïve. Supply and demand is what rules every market regardless of what political filter you apply on top of it. Money is just the language we use to express value when we interact with people we don’t know personally. When you realize that money is a language you also realize that tampering with the supply of it is a way of restricting free speech. But there’s a twist. Increasing the supply of something automatically decreases the demand for that something. When it comes to money, an increased supply might inject some fuel into the economy in the short run but always at a cost for future generations. In short — there is no free lunch.
When you introduce something better some people will realize its potential before others do. This is inevitable and it will give early adopters a head start. The bigger the invention, the bigger the advantage. When the invention has such deep implications for society as a whole as Bitcoin does, the benefits for early adopters will be huge. The price of Bitcoin is very much a direct reflection of this. Every two years or so another zero is added to the figure. This causes a lot of suspicion and envy among those who haven’t got any Bitcoin yet and as most of them still can’t grasp the magnitude of Bitcoin’s potential they think that it can be copied, that it has reached its peak and so on. This is nothing new and it will probably go on for some time. As the boom part of the boom-bust life cycle of an altcoin can go on for quite some time. Just look at the top ten coins five years ago. One of them is still around today and worth three fifths of the value it had then, denominated in Bitcoin.
Everyone will have to adapt to a world in which Bitcoiners get richer by the power of ten every two years and everything that this implies. Decentralized is a reality now and nothing on earth can change that fact. This is very hard for most people to understand. The things they are willing to do to justify their denial is simply mind-boggling sometimes. Bitcoin is a completely voluntary system open for everyone in the world to use. Why would anyone even be against that in the first place? If you didn’t buy before the rally last year — live with it. Don’t sell, wait a couple of years and all of a sudden you’re one of the early adopters who get to laugh at the pathetic attempts of besmurging what is obviously one of the best things that happened in your life. Good things will finally really do come to those who wait. As an outsider, there’s absolutely nothing you can do about Bitcoin. As an insider there’s not much you can do either but as such you can at least enjoy the benefits.
On a side note — today we celebrate Bitcoin Pizza Day. Look it up!