It has been over ten years since Satoshi Nakamoto created Bitcoin. The timing of Bitcoin’s inception coincided with the Great Recession which began in 2007. In the early years (2009-2013), Bitcoin had very little, if any, acknowledgement from the general public or the mainstream media as to what it was and what it represented.

It was only a few years into the Great Recession that both the media and general public realized that the global world order (pre-2007) had changed and would be very difficult to return to the ‘same old way’ of operating.

Despite this acknowledgement, finance ministers and governors of financial institutions have tried desperately to put the ‘genie back in the bottle’ by advocating and implementing one economic policy which has had no criticism within the mainstream media.

The term economists use for this policy is ‘quantitative easing’. In layman’s terms, this means that a country’s bank (e.g. US Federal Reserve) prints money in the hope of stimulating growth within the economy. Keynesians may initially rejoice at the idea of a government increasing its expenditure at a time of economic hardship. The problem is that this money does not go to ordinary people (i.e. minimum wage increases, support for small businesses); instead that money goes to the financial hub of a given country which typically results in major companies buying back shares within their own companies which simply inflates the share price and starts the death spiral which, in part, had caused the Great Recession! The madness of ‘quantitative easing’ continues to happen to this very day.

This is where Bitcoin enters the scene. Think of any fiat currency. Whether you are thinking of a US Dollar, an Indian Rupee or a Malaysian Ringgit, they all have one characteristic in common: they are inflationary. If you hold a $5-dollar bill in 2019 and keep it in your wallet for 5 years, that $5-dollar bill’s value will have been eroded by inflation.

Is this true of Bitcoin? Absolutely not! Unlike all fiat currencies, Bitcoin is a deflationary currency. There is a finite amount of Bitcoin that will ever be mined/bought (21 million Bitcoin) by any individual. This is one of the features of Bitcoin which makes it a better currency than all of the fiat currencies.

Bitcoin has commonly been referred to as ‘digital gold’. The reason for this is that Bitcoin and gold are both finite in their supply. Whilst fiat currency is perpetually inflationary in nature, the US Dollar was pegged to the price of gold. In 1971, in what is commonly referred as the ‘Nixon Shock’, the US decided it would no longer honor the existing arrangement whereby international accounts in dollars were redeemable in gold at a fixed exchange rate of $35 per ounce.

The result of the ‘Nixon Shock’ was that fiat currency has not had any stability since 1971. Gold, like Bitcoin, is valuable and reliable because it is finite in number. Here is a short story to explain this principle:

Imagine a group of people of who have been stranded on a remote island. They have no realistic hope of rescue and decide to start building a civilization on the island. Eventually, the islanders need to decide on a means of currency. They decide they want to use small stones as a means of currency.

There are two types of stones: There is one type that looks dull and washes up daily on the shore of the beaches, of which there are many. The stones by the beaches are guarded to prevent theft but the corrupt island leaders siphon off many of the stones for themselves; The second type is shiny, mesmerizing to look at and few in number. These stones are located in a forest high up on the island. The only means of access to the forest is via a cliff which requires special climbing equipment in order to access the stones in the forest. There is no prize for guessing which stone is Bitcoin!

The way we use money is changing. Large parts of world are now adopting almost completely cashless systems. WeChat and AliPay are used across mainland China as a facilitator to spend Chinese Yuan; Apple Pay is being used in several western countries; and several QR code payment facilitators are being used every day around the world.

This is just the beginning. The service provided by the current payment facilitators is a step towards what will inevitably lead to Bitcoin being used as a means of payment all around the globe. Bitcoin ATMs are rising in number and public recognition of Bitcoin has increased exponentially since 2015 to this very day. Bitcoin is now part of the global vernacular which will only increase when people continue to learn more about this cryptocurrency. That is why Bitcoin is here to stay.