The assumption that Bitcoin (BTC) is a safe haven against inflation has been called into question in light of recent global market volatility, and the flagship digital asset has suffered considerable downward pressure in recent weeks and months. Saifedean Ammous, an Austrian economist and author of “The Bitcoin Standard,” discussed the benefits of Bitcoin.
Ammous spoke on the merits and drawbacks of Bitcoin at a time when issues like excessive inflation are wreaking havoc on economies all over the world, and the asset is currently in a bear market. The economist said on these worldwide issues:
“I believe that a big number of problems in the world are created by easy money, inflation, and governments having practically unlimited access to people’s wealth, and I believe that Bitcoin solves this.”
“It combines gold’s time and space saleability with fiat’s time and space saleability in one immutable package that no one can change.“
Furthermore, the economist stated that Bitcoin‘s consensus parameters have not altered and remain unchanged.
Ammous pointed out that the vast majority, if not all, of other digital currencies have gone through numerous hard forks, which the community views as advances. “Bitcoin can’t upgrade,” he said, referring to the designers and founders. “But we upgrade all the time.”
According to the author:
“Well, you know what else is constantly upgraded, Facebook, Apple, and Amazon.” Anything that centralizes is incredibly straightforward to improve, which is why, as Michael Saylor points out, these things are security, not a liability. You’re taking on someone’s technological and financial risk; they can hard fork tomorrow and 10x the supply.“
Bitcoin and its Erratic Nature
Much has been said about Bitcoin’s volatility; however, Ammous believes that one should consider tolerating volatility more because the alternative is to maintain fiat assets that only go down in a relatively stable manner.
“The dollar does not have a lot of volatility day to day; the value of your dollar does not alter 40% or 20% overnight, but it does consistently go down.” That’ll drop by 40%, you can bet on it. So the choice is between short-term stability and long-term fall, or short-term turbulence and long-term rise.”
Finally, when it comes to Bitcoin and its energy usage, the economist says the digital asset’s energy usage is justified. Bitcoin, he pointed out, does not need to buy electricity from regions with strong demand because it can buy electricity from everywhere; this is what’s genuinely mind-blowing about it.
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