When people say Bitcoin is the hardest money, what they’re talking about is that Bitcoin is the hardest money to create.
The US dollar has lost half it’s value in the past 30 years due to central bank management of the money supply.
ON BITCOIN is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
Subscribed
When ever they choose, they can increase the money supply and lend it out to banks to lend to consumers and businesses flooding the market with newly created currency.
Bitcoin is the purest form of “hard money” ever created because the elasticity of Bitcoin is zero.
Why is Bitcoin hard to create?
Ever since Bitcoin was first designed, the following consensus rules were establish and continue to exist to this day:
- 21,000,000 Bitcoins to ever be produced
- Target of 10-minute block intervals
- Rewards halving event occurring every 210,000 blocks (approximately every 4 years)
- Block reward which starts at 50 and halves continually every halving event until it reaches 0 (approximately by year 2140)
About 18.3 million bitcoins have been mined so far with less than 3 million to go.
Let’s compare this to other assets.
Here are 4 questions to ask yourself if something can be considered hard money.
I took the liberty of responding with my own answers below but you can come to your own conclusions.
Let’s start with dollars. US dollars, Canadian dollars, the Euro. We’re talking about Fiat dollars here.
Q: How hard is it to create a dollar?
A: It’s really easy for central banks to print more paper dollars. Central banks around the world have proven this over the past couple of years and have increased the dollar supply like never before. This is why we have crazy inflation right now and a recession. Very easy. Too easy.
Okay how about gold? Old used to be the standard unit of account before 1971 for the US government changed that so we can have infinite fiat dollars as the standard.
Q: How hard is it to create an ounce of gold?
A: It’s not easy but it’s possible. Requires a tremendous amount of equipment and energy to find it, retrieve it, process it and bring it to market.
Highly likely there’s much more gold out there to be discovered. Nobody knows how much supply is on this rock we live on.
It was just announced this past week that South Africa found a huge store of gold.
Hard but not impossible.
What about real estate?
Q: How hard is it to create a penthouse condo or a ranch in the country?
A: It’s not as easy as printing a dollar but it’s possible and there will definitely be many more penthouse condos created and ranchers built. Definitely not a fixed supply when it comes to real estate and it’s certainly not hard money.
Q: How hard is it to create a new cryptocurrency?
A: There are over 20,000 created in the last 5 years so I would think it’s not that hard to create a cryptocurrency.
Even when Terra Luna crashed, they just created a new one and started to try and convince people that this was the NEW asset.
Crypto is not hard money. 99% are Ponzi schemes.
Now let’s talk about Bitcoin.
Q: How hard is it to create a Bitcoin?
A: Creating one Bitcoin requires a large amount of energy and once all 21 million Bitcoin are created it will be impossible to create anymore.
Bitcoin is hardest money ever to be created.
This is an instrument that everybody in the world can use and trust as the hardest money available.
No one person, organization or nation can change the rules like they can in the current fiat central banking system.
Bitcoin is democratizing access to a truly fair financial system for everybody on this planet. It truly is the win-win currency.
This is also why Bitcoin is not a waste of energy because providing a truly fair financial system, not centrally controlled by the elite political system, is worth more than the electricity it takes to secure this decentralized network.
In Closing
Hard money is something we haven’t had for a long time if ever.
This is why Bitcoin is such a revolutionary invention.
The combination of electricity, proof of work, consensus rules and a decentralized network provide humanity with a technology that equalizes everyone on the planet.
I hope you found some value in this post.
As always if you have any questions leave me a comment below or reach out to me on Twitter @craigonbitcoin.
