Bitcoin: From Bretton Woods to Blockchain
The Bretton Woods agreement of 1944 established a new global monetary system by replacing the gold standard with the U.S. dollar.
Fiat currency has no fundamental value, which is why it only has value within a closed market (specific economic area) & only has velocity due to the base rate of interest applied to it by the central banks, which is enforced by the laws of that country.
The issue with having to apply an interest rate means that the interest must already be within the existing economy, which means adding to the money supply with more money given out at interest. This will always lead to economic booms & busts as the interest rate means cash is a negative asset & therefore people & companies are always looking to exchange it for positive assets such as shares, property, antiques, precious metals, art etc, which inevitably lead to market bubbles. These bubbles are a direct result of people & companies looking for places to store their value, which creates overconsumption and waste of resources. It’s these occurring anomalies that clearly indicate a fault with the system.
Gold established itself as the world’s first globally recognised Medium of Exchange (MoE) because of the characteristics it possessed that enabled it to facilitate trade. The ability to trade is the most valuable thing in the world & is essential for the creation of wealth in society. National security also runs parallel economic prosperity.
Money was invented to facilitate trade more efficiently by creating a pre-weighted, gold-backed MoE referred to as currency. However, the issue with currency is that it doesn’t allow for the increase in its value as the economy grows & more parties come into trade. Whereas gold was divided further, currency is inflated, which causes it devaluation. Ironically, inflation was the trade-off to making trade more efficient and allowed for acceleration in economic prosperity.
Money should be deflationary like gold. A deflationary currency solves the issues of pollution that comes with overconsumption as people would then be less willing to part with a positive value asset used as MoE. Manufacturers would have to compete on quality rather than quantity to encourage consumers to part with their money.
A deflationary currency would also help stabiles the economy & businesses because their goods & services would be traded for a MoE that either maintains or increases in value. Currently, businesses not only have to tackle the interest rate placed on money by the banks, but also its inflation at around 2–3% per annum. Compounded over time this has a significant detrimental effect on a business’s balance sheet which further reduces their chances of survival.
Micropayments enable opportunity cost to be factored into things such as litter pollution, which could be a catalyst for a whole host of positive environmental ventures.
Blockchain technology allows for digital data to be immutable. Since almost all data is now digital it means that Bitcoin & Blockchain are likely to start a digital revolution. Bitcoin will be purchased to save corporations millions if not billions of USD in future data efficiencies. As the Bitcoin blockchain is a decentralised, distributed network with no central point of authority it allows for the ownership of the data by individuals & corporations who upload to it.
The blockchain that follows the Bitcoin protocol defined by Satoshi Nakamoto in his White paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” is called Bitcoin Satoshi Vision, known as Bitcoinˢᵛ & has a ticker symbol (BSV).
To understand why there appear to be x3 separate chains that stem from the Bitcoin Blockchain you can read my Medium Article titled “Bitcoin: A Tail of Blockchain BTC/BCH/BSV linked here — https://medium.com/@sirtoshitv/bitcoin-a-tail-of-blockchains-x3-eebb136457c7
Satoshi Nakamoto had a vision. That vision was Bitcoin. Bitcoin is Satoshi’s Vision. Bitcoin is BSV.
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