Value Creation In Bitcoin – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides

In 2009, Satoshi Nakamoto invented the greatest store of value ever seen in human history. His creation, bitcoin, has firmly secured its place as the hardest form of money in the new digital economy and the bedrock of a new open, global financial system.

Bitcoin has already won.

What remains relatively unexplored is the way in which Bitcoin, the monetary network, will incentivize new forms of value creation and unlock new methods of value capture never before seen in human civilization. This piece explores the ways in which Bitcoin’s structure of incentivizing long-term holding among its token holders collides forcefully with its open monetary network to systematically create more value for society and lead to an eventual cultural renaissance.

All second and third order effects related to Bitcoin come from its elegantly designed incentive structure. Miners are incentivized to honestly mine blocks, and network participants are incentivized to HODL. Bitcoin’s supply growth is decreasing over time, leading to a capped supply and the one true digitally scarce substance on this planet.

Bitcoin’s deflationary monetary policy and NgU tech increases each bitcoin’s purchasing power in the long run, which creates a model that incentivizes its holders to put off unnecessary spending, save for the long term and invest prudently. This model runs in stark opposition to the incentive scheme of the fiat regime, where constant debasement of currency and inflation incentivizes consumption and rampant speculation.

Source link Bitcoin Magazine

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