This may come as a strange thought but I think that the true value of bitcoin is that it is teaching us a different kind of economy, a deflationary one.
At a time of the year when consumerism is at an all time high for the year wherever you are in the world: Black Friday, Cyber Monday, Singles Day, Christmas, Boxing Day. We can see the benefit of saving our money.
If you put $1000 in your bank account on January 1st of this year it would be worth $1010 from a savings interest rate but have the buying power of $990 due to inflation. There is an incentive for you to spend your money quickly from the moment you earn it. A minor incentive (from a modest inflation rate) and probably below the radar for almost everyone (myself included).
Though when governments and central banks get careless we can see the reality of an inflationary system. Money is unlimited to print but the value is not and the system slowly exposes itself and then quickly crumbles. I don't expect that hyper inflation will plague the developed countries as much as developing countries (as they try to emulate our countries which is another story) but the message is the same, spend your money now before it is worthless tomorrow. So we tread a fine line between saving a modest amount and spending our dwindling money as it becomes worthless (Canada recently got rid of the penny as it costs more to make a penny than what a penny is worth. That is the slow effects of inflation.)
The greatest fear that I can find from a deflationary economy is that consumerist model stops. People hoard their money because it will be worth more in the future. No one spends money and everything grinds to a halt. This is the present of cryptocurrency. We are experiencing hyper-deflation in the crypto world. And it doesn't facilitate a viable currency until the price of it is established. The economy does still need people to spend money to function. A hair dresser needs people to come in and spend money to get a hair cut so they can have money to spend on food, have fun, save, and so forth. If our money kept increasing in value at unreasonable rates then it doesn't function as a currency. No one wants to spend their money until they know they can get the most for it. So we all walk around with long unkempt hair and tattered rags for clothes hoarding our bitcoins for fear of spending some on a new pair of jeans and finding out tomorrow we could have spent half as much. Fuck.
A small deflationary economy does have benefits. Many benefits for the average person. The entire mindset will change from extensive consumerism to value based consumerism. Though some businesses stop selling as much and profits decrease. The company loses value as their products collect dust on the shelves. But is that such a bad thing? Did that product provide value to us? Probably not. Do we really need to keep spending money on things we think we want or should we be rewarded for not spending our hard earned money with the knowledge that our money will be worth more in the future.
A monetary system that holds its value and slowly increases is the best form of money, in my opinion. The consumer knows that the products they may want to buy are always going to be there and the product will decrease in cost as time goes on and the value of their money will increase in time. This is not what big businesses or banks want for an economy. The inflation model creates a steady flow of wealth from the worker to the wealthy oligarchy. We can change this now with a deflationary model and everything is set in place to make it happen.
If you put that $1000 in to Bitcoin at the start of the year it would be worth approximately $19,000 now. That is one amazing investment. I wish I had done that. Ha. But what will happen this coming year? Will it be worth $100,000? Will someone regret not investing $19,000 for a bitcoin? Maybe. Probably. But that doesn't make a good currency as no one is willing to spend any Bitcoin.
The importance of bitcoin is tremendous as it gives the power back to us. But we need to find a fair market value for 1 BTC. Once the market value is established against something else that is stable, like gold, that isn't manipulated by governments or banks. Then we can develop a currency where the deflation is a modest amount and savings are rewarded but spending isn't penalized. If it can be done for inflation it can be done for deflation.
So as of right now the entire market is just looking for that leveling value. And I am not saying bitcoin is the currency of the future; there are many reasons it will not be the winning currency. And many it will.
Please feel free to comment. I would enjoy some feedback and ideas of others that have different views.
