I first heard about bitcoin in a casual conversation about buying the latest games on Steam using Bitcoin. At the time, the cryptocurrency was relatively new, majorly unpopular and confined for use in the dark corners of the internet.
At the beginning of this year, Bitcoin was still trading on major cryptocurrency exchanges at less than or around $1,000 over the last few months we've seen that value increasing exponentially without a slow down in sight. This post however will not be focused on the Bitcoin price action instead, we'll be covering a different aspect of the cryptocurrency.
Age of Personal Financial Freedom
The anonymous creator of Bitcoin, Satoshi Nakamoto in the first Bitcoin official document described his vision to reignite unprecedented personal financial freedom from banks and other financial institutions that have over the centuries created systems that required users to remain wholly dependent on them.
With that vision in mind, Bitcoin's value is rooted in the cryptocurrency's independence from the mainstream, from any kind of government regulation, from assets that are subject to the traditional market's moods and regulators' prescriptions. Bitcoin offers a viable alternative for people to own something completely outside the power of nation states -- something that has defied regulatory bans, sanctions, currency restrictions, curbs on what can legally be bought with fiat money -- trumps technological imperfection, volatility and the high risk of theft.
Over the past 50 years, we've observed critical consumers behavioural change. We've shifted from being conditioned to use cash to pay for goods and services to using bank and credit cards. The next evolutionary step was mobile payments, which are still linked to your bank account and now we envision a future where we'll no longer require either cash or cards.
Financial freedom through Bitcoin however, won’t be achieved simply by merchants becoming more willing to accept the digital currency as a payment, but also by consumers willing to use Bitcoin in place of traditional payment methods.
Understanding Your Current Lack of Financial Freedom
Selling Bitcoin as a solution of financial freedom would have been easier if most of us truly understood our current lack of financial freedom. At the end of 2015, when I was leaving my country South Sudan - I had lost more than 90% of my savings due to the hyperflation of about 1000% that dramatically devalued the national currency. Similar cases have been happening in Zimbabwe, Sudan and even Venezuela.
Until everyone knows that my experience or that of anyone in Venezuela could be replicated in their lives, they will not see the problem that is staring them right in the face: The current financial infrastructure is failing. Inflation is a viscious cycle and Central Banks initiatives like Quantitative easing or printing additional money only further devalues the existing supply.
Bitcoin exists outside this cycle, its a deflationary by design and provides not just extra financial asset security but frees us from continous asset devaluation.
Trusting Bitcoin As A Currency
Even though Bitcoin is anything but a stable currency right now, it begs the question - how much can trust it to operate as currency or alternative to national currencies. A major deterrent to the adoption of Bitcoin as a currency is the flactuating transaction fees that have gotten to highs of $20 at the time of writing this. Before merchants can put their trust in Bitcoin as a payment method alongside traditional methods certain factors are considered. There needs to be:
- No extra costs associated with accepting bitcoin payments
- No additional infrastructure to set up
- Easy bitcoin to fiat / fiat to bitcoin exchanges
Even if today's price is largely volatile, it's still fundamentally a great financial instrument. It's probably most valuable in countries with oppressive regimes and unreasonable governments. Bitcoin is well worth the time and effort. It will remain an alternative to the current financial system of governments and banks because at its core it is all about letting the individual user control funds at any given time.