this post was submitted on 09 Mar 2024
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Isn't that true of money in general?
Kind of? Not really. With FIAT, central banks can influence the creation of money through quantitative easing, adjusting interest rates, etc. They are also backed by their respective governments, which ensures their value as a medium of exchange and store of value. They represent the economic output of the countries they are tied to, which is real and measurable, and are guaranteed value by the system of government as a whole. Bitcoin's supply is algorithmically generated, and its value is only representative of the number of people who agree that it has speculative value. Bitcoin also doesn't have financial products that have intrinsic value such as stocks and bonds, which are backed by powerful institutions that can ensure dividends/profit. Bitcoin is a low-utility, scarcely accepted security whose main perk is its ability to cash out to FIAT. Because of this, you need to rely on someone to buy you BTC at a higher price than you bought it; that's the only real way to make money on it.