An asset can only function as money if it has intrinsic value to a subset of the population, establishing a price floor. Cigarettes work as currency in prison because some people actually want to smoke them. Bitcoin, having no underlying use, is like a "digital cigarette" you can't smoke, making its value purely speculative.
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While Bitcoin's code can be copied, its core innovation—verifiable absolute scarcity—cannot be replicated. It was a one-time discovery, like the number zero. Any subsequent digital asset lacks the pristine origin and established network effect, making Bitcoin a unique, non-disruptable phenomenon rather than just another technology.
A core function of money is to be the 'final extinguisher of debt.' However, fiat currency is created as debt, meaning every dollar is both an asset and a liability. This inherent contradiction makes the entire financial system fundamentally fragile.
Bitcoin's core properties (fixed supply, perfect portability) make it a superior safe haven to gold. However, the market currently treats it as a volatile, risk-on asset. This perception gap represents a unique, transitional moment in financial history.
The argument that 'Bitcoin fixes this' ignores human reality. Its volatility and complexity create an insurmountable adoption barrier for the average person. The only practical solution for the masses is holding governments accountable, not mass crypto adoption.
By creating a regulatory framework that requires private stablecoins to be backed 1-to-1 by U.S. Treasuries, the government can prop up demand for its ever-increasing debt. This strategy is less about embracing financial innovation and more about extending the U.S. dollar's lifespan as the global reserve currency.
Gold excels on four of the five properties of money but fails on portability. Bitcoin digitizes and perfects all five: divisibility, durability, recognizability, portability, and scarcity. This makes it a fundamentally superior store of value for the digital age.
For hundreds of millions in developing nations, stablecoins are not an investment vehicle but a capital preservation tool. Their core value is providing a simple hedge against high-inflation local currencies by pegging to the USD, a use case that far outweighs the desire for interest yield in those markets.
For younger generations who are digitally native, the concept of physical value (e.g., gold being a "real thing") is meaningless. They trust the digital realm more than physical storage, viewing both gold and Bitcoin simply as assets whose value is determined by what others will pay.
The Federal Reserve's ability to print money is a direct mechanism to take value from every citizen without legislation. It is mathematically equivalent to government-sanctioned counterfeiting, devaluing currency and transferring wealth from the populace to the government, acting as a tax.
Central banks evolved from gold warehouses that discovered they could issue more paper receipts (IOUs) than the gold they held, creating a fraudulent but profitable "fractional reserve." This practice was eventually co-opted by governments to fund their activities, not for economic stability.