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It’s been ten years since Bitcoin first came into existence. Though it is yet to gain regulatory clarity, it is making advances towards becoming a store of value and medium of exchange. Given the fact that fiat currencies itself don’t have an average life expectancy of more than 30 years, even the reserve currency couldn’t last 100 years, as for the US Dollar, before 1933, it was redeemable for gold, so Bitcoin has only started its journey.
Dan Hedl, the co-founder of InterchangeHQ and ZeroBlock shared in a tweet storm, the “exceptional” genetic code of Bitcoin and how its traits are superior to that of fiat and gold.
Bitcoin As A Money
Money is the medium in which value is transferred. But it’s not just the paper in your hand rather a primitive form of record-keeping, store energy that is required to acquire goods and services, and central information utility of the world economy.
The main functions of money are a store of value, medium of exchange, and unit of account. Hedl states,
“no money starts by providing all three functions, each new species of money follows a distinct evolutionary path.”
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As Vijay Boyapati wrote in his, “The Bullish Case for Bitcoin,” last year in March, Bitcoin excel in the majority of these attributes, allowing it to “outcompete” other options that further provides a strong incentive for increasing adoption.
https://twitter.com/danheld/status/1110168260136321030
For wealthy investors, the absolute scarcity of Bitcoin combined with censorship resistance is a powerful motivator to allocate a portion of their wealth in this nascent asset class.
“If Bitcoin exists for 20 years, there will be near-universal confidence that it will be available forever, much as people believe the Internet is a permanent feature of the modern world.”
Evolution Of Bitcoin
Just like gold and beads, initially, they have been only collectibles, only later to transition into a form of money. From here, money moves into the store of value category and then medium of exchange with the last phase as a unit of account.
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Bitcoin might still be a long way from Store of Value, but if we take a look at the study of 775 fiat currencies by DollarDaze, the average life expectancy of a fiat currency is just 27 years. Even the fittest fiats those become reserve currencies lasted under 100 years. Hyperinflation, monetary reform, war, and independence are the causes of their extinction.
Given this susceptibility of fiat currencies to failure that can be printed and inflated at authorities’ will, gold has “long” served as a durable and scarce alternative.
Currencies are currently in a state of as Hedl puts it “hyper-evolution,” as they come with distinctive traits that set them apart from one another.
source : https://bitcoinexchangeguide.com/bitcoin-the-apex-predator-of-money-beats-fiat-gold/