Filip Poutintsev

@filip.poutintsev

All the things that make Bitcoin superior to FIAT

I spend a 3-hour long car drive explaining Bitcoin to my wife. Here are the points that came in the discussion.
Bitcoin is the greatest economic invention ever.

The right type of control

The way the FIAT system is created is that no one knows exactly where all funds are located currently and the total amount of them is kept in secret. But on the other hand the government with the help of banks watches very closely how much money each individual holds in his account. In short, the individuals are under control, but the system is not.

With Bitcoin, the control is done exactly the opposite way. The system is under control and everyone can check at any moment in what wallets all Bitcoins are located and their total amount. At the same time, all wallets are anonymous and no one knows who owns them. This is the perfect example of the right control, where the system is being controlled, but the individuals are not.

Safe: You own your own money

With Bitcoin, you own our own funds and no one can take them from you. Unlike FIAT, banks cannot freeze your account and government cannot confiscate your funds. This is a very important aspect in the modern world where money is being often used by a government as a tool to extort and punish people. Bitcoin = 100% economic freedom.

Transparent

Unlike FIAT Bitcoin is 100% transparent. Anyone can check the blockchain and the code to see that it works properly and does what it claims to do. All dishonest actions of an individual will be instantly noticed and stopped. This is the reason why counterfeit Bitcoins and corruption inside the system simply cannot even exist.

No printing money

Because the total amount and the creation speed of Bitcoins areset and cannot be changed the government or any other party to print Bitcoin for free as it does with FIAT money. This totally removes inflation that is also known as theft from citizens and puts an end to dishonest government fundraising campaigns through printing new money, which are mostly used to finance war or other harmful or illegal endeavors.

Decentralized = Government-proof

Let’s face it: governments are the biggest threat to mankind. Throughout the years governments, not private citizens, have committed most of the crimes. In the 20th century alone governments have killed 262 million unarmed people, which does not count all the people killed in the war, which will probably add 100 million more. That’s hundred times more than all criminals gangs, mafia, serial killers and common murderers combined.

When you know this fact you understand that a typical murdering rapist is more philanthropic than a typical government. This is why people have to be protected from governments with all means possible. Bitcoin guarantees economic protection to the people, as Bitcoin cannot be tampered by anyone including the evil government itself.

Capitalism and the free market at it’s best

One thing my wife found difficult to understand is why Bitcoin costs as much as it does. For everyone who is familiar with the stock market understands that the price of Bitcoin, as well as the price of the stocks, is determined based on demand and supply. In short, the more people believe in the idea of Bitcoin the more it costs.

The price of Bitcoin is actually the purest example of capitalism, where no 3rd party can regulate nor affect the price. Bitcoin is the example of a fair market that existed in the dawn of civilization, but sadly today is very rare.

Bitcoin is easier than card payments for business

If a shop wants to accept card payment it has to buy or rent card reader, make an unfavorable agreement with a bank and pay 3% fees. With Bitcoin you just need a smartphone or PC and a free wallet. For businesses Bitcoin is a lot easier and you are not depending on a bank or credit card company to suddenly revoke your agreement or chargeback payments.

No more economic crises

The leading cause of economic crises is our defected economic system that is based on debt. Whether it’s hyperinflation, the bankruptcy of the banks or just uncontrolled spent of government funds, the root cause is always the same. As Bitcoin is not based on debt and you cannot just print money it out of nothing, 95% of all economic crises will be avoided just by using Bitcoin.

Bonus: Exchanging Bitcoin to FIAT is just a temporary phase.

One thing my wife pointed out correctly was that it’s currently often difficult to change Bitcoins for FIAT. Yes, you can sign up to dozens of different crypto exchanges and exchanges your money there for very small fees, but for that, you need to go through the painful verification process and then get interrogated by your bank. And if you select easier exchange methods, like Bitcoin ATM/teller or face-to-face with another Bitcoin user the fees often raise to 5–10% which is pretty high.

However, the thing is that exchanging Bitcoin to FIAT it just a temporary phase of a period when both crypto and FIAT are in circulation. Very soon, possibly within 10 years most consumers will abandon FIAT and switch to Bitcoin completely and then exchanging Bitcoin to FIAT will no longer be necessary as one will be able to use Bitcoin everywhere. Even now if you look hard you can buy everything with Bitcoin, and if the future Bitcoin will be as common as using a credit/debit card.

However the thing is that exchanging Bitcoin to FIAT it just a temporary phase of a period when both crypto and FIAT are in circulation. Very soon, possibly within 10 years most consumers will abandon FIAT and switch to Bitcoin completely and then exchanging Bitcoin to FIAT will no longer be necessary as one will be able to use Bitcoin everywhere. Even now if you look hard you can buy everything with Bitcoin, and if the future Bitcoin will be as common as using a credit/debit card.

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