Nearly ten years after failed fiscal and monetary policy experiments in which trust in institutions waned near all-time lows, the rationale for holding Bitcoin has never been stronger. Still, many people are neutral and unreactive on this matter, believing in the current state of affairs rather than questioning the narrative that plays the future of everyone today for small profits.
With inflation historically behind the collapse of economic empires, Bitcoin offers a way out
Many people refer to the last financial crisis of 2008-2009 as the point where moral hazard reached a turning point.
For those unfamiliar with the term, moral hazard means the idea that when a company knows that it is protected from the risks it is taking, it is taking excessive risks, with the full knowledge that failure will not have significant consequences .
Rather than punishing the instigators and culprits behind the latest crash, organizations and governments too big to fail have been bailed out and rescued by taxpayers. Unfortunately, reshaping the boundaries of moral hazard did not result in fewer risks, but more.
Meanwhile, interest rates around the globe have dropped to near or below 0%, creating an ideology that money printing can use to solve any problem. Now, with global debt hitting new highs overall, the printing press spinning at full speed, and inflation gradually rising, why are the fiat believers and undecided just sticking to that instead of accepting Bitcoin?
The effects of inflation neutrality
Not accepting Bitcoin or choosing not to take a position on this matter is indeed a vote of confidence in the current system. With an inflationary architecture and no plans to replace it, the value of money goes down every day.
Printing more money only accelerates this reality, and zero interest rates are punishing savers like never before. Leaving money in the bank might as well telegraph the world that trust in its antiquated artifacts is earned and earned.
Mortgaging people’s future to support failed policies in the present is a long-term losing strategy, and history tells us so. Eventually the piper will get paid, and the current debt super cycle will not last indefinitely. There are innumerable current and past examples of exactly these events that underscore how quickly a country can transition from a prosperous nation to a failed state.
Whether looking back at the Weimar Republic or today’s Venezuela, a failed government and monetary policy ultimately leads to hyperinflation. The widespread devaluation of the fiat currency coupled with high debt is a nearly insurmountable challenge that ultimately leads to the failure of government and institutions, and creates a perfect foundation for autocracy and tyranny to flourish.
Challenge the Fiat narrative
Bitcoin has already proven that for today’s crumbling status quo, there is another sensible approach to this problem. As the best performing global asset by a factor of ten over the past decade, belief in decentralization continues to grow as institutional distrust grows in parallel.
Although there is no clear consensus on the total number of Bitcoin holders given the difficulty of measuring participation, some studies suggest that over 100 million people currently own Bitcoin, representing around 1% of the total world population .
What’s exciting is that the dynamic of this belief in Bitcoin is not limited to just one country or region, but reflects a growing global community of people who believe that something better is both possible and realistic. Lots of people are voting with their feet, and bitcoin wallet data reflects this accelerating trend towards deflationary alternatives.
Younger generations are over-represented in this regard, which is not surprising given their first-hand experience of the boom-bust-bubble economy. Millennials, for example, are three times more likely to own and hold Bitcoin than long-term investments than any other generation. Generation Z is also feverishly participating in the wave of participation.
Bitcoin as a reflection of dwindling institutional trust
Whether you believe in Bitcoin or the promise that cryptocurrencies hold, an insurance policy against bad governance and worse policies should not be underestimated and undervalued. The main reason for Bitcoin is because of where you stand on the government and how much trust you have in the monetary systems of these institutions.
Ultimately, ignorance of the institutional stranglehold on inflation and the consequences it brings on ordinary people is very dangerous. This is not just a local term, but a global reality. Accordingly, it is as bad not to comment on Bitcoin as it is to avoid it, as it reflects an unreserved belief and confidence in the systems that have caused nothing but deterioration for most of society over the past decade.
Trust is ultimately earned, not earned. In its nature, trust is not required to take advantage of Bitcoin, but trust in its capabilities is undeniably increasing, putting the status quo in the background as new paradigms gain the trust that people lack in government. Whether governments can curb moral hazard is debatable, but Bitcoin holds the immeasurable promise of belief in a system that requires absolutely none to exist and grow.
So where is your faith? – with the current national monetary systems or with the promise of a decentralized one? Let us know in the comments below.
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