Hope everything is well with you.
The urge I feel to share with you about Bitcoin is so immense that I am not able to stop the strokes of my pen. I mean, my typing of words !!
It is none of those, yet.
Bitcoin being SOV or MOE really depends on the context of the time in which we are.
The wild volatility you are seeing is a result of greed and fear. Also, free-market commodities like Bitcoin are meant to be volatile.
See this Gold’s volatility’s chart when it was trading freely:
So coming back to the point.
Bitcoin is trying to be SOV first and then it will become MOE in the future. A high school student will also come to realize this if he ponders this way:
Bitcoin is continuously on an upward trend since 2010 and is limited in supply. So when the supply is fixed and demand varies (high-low during bulls-bears) the value will automatically fluctuate.
But because it is finite, as more users join the network and try to own Bitcoin, it will put a demand pressure in the upwards direction ultimately increasing the value of coins.
One who understand this, just like our high school friend will never sell his/her bitcoins untill the volatility comes under 1-2% and will keep spending the worthless paper like the USD or EUR, etc. This is so obvious and interesting that there is even a name for this phenomena – Gresham’s Law.
Bitcoin has now crossed the collectible phase and now is trying to enter the SOV realm.
In it, it will try multiple times to make its stronghold and after becoming SOV it will establish itself as a medium of exchange and finally as a unit of account. Bitcoin’s Lightning network will play a huge role in this !!
History suggests that establishing something as a unit of account worldwide in this hyperconnected world doesn’t take more than a few months.
I anticipate it to be even faster.
This is how the monetization of a monetary asset like Bitcoin happens. Even gold became what it is today, in the same manner. But none of us witnessed that as it took place over 100s and 1000s of years.
This time it is different because we all will witness this and the monetization will happen much faster !!
So brace for the moon ride. Do away with myths and misconceptions of yours and others too, to really help Bitcoin succeed as rightly said by this Bitcoin maximalist-@Willem_VdBergh
“Only by informing people correctly about the use case Bitcoin has at this moment can we maximize its adoption and prevent a lot of people from making the biggest financial mistake of their life.”
So do your best today for Bitcoin and it shall do the same unto you !!
If you have any questions let’s discuss it at @themoneymongers and untill next Tuesday, Bye Bye !!
If you liked this stuff, you should probably sing-up for my weekly Bitcoin Musings Newsletter to get the future editions of it 🙂
Hey there! I am Sudhir Khatwani, an IT bank professional turned into a cryptocurrency and blockchain proponent from Pune, India. Cryptocurrencies and blockchain will change human life in inconceivable ways and I am here to empower people to understand this new ecosystem so that they can use it for their benefit. You will find me reading about cryptonomics and eating if I am not doing anything else.