Very interesting quote from this book “The Bitcoin Standard” pg. 84
“Investment is a reward for taking risk, but sound money, having the least risk, has no reward.”
I am curious as to how exactly this is applied to bitcoin tho as Bitcoin is, as I, and many others consider Bitcoin as a sound money. Bitcoin has a capped supply. We all should know that by now & if you don’t you either need more research or to call a different hobby or perfection. Bitcoin even tho new coins are being produced, this will not happen forever. It’s inflation is quite low until the point in which minting new coins stops & miners will continue mining for transaction rewards.
Purchasing power of Gold has relatively been around the same for the past 500 years. Gold holds its value much greater than government fiat money which inflates at astronomical rates. What makes money valuable is its purchasing power for goods & services. Also to add that its divisibility & store of value. Not the amount of 0’s behind it. A hard, sound money like this is better for the human soul as we humans can focus more on the things that matter in life without the worrisome feelings of financial problems which for many people that creates high amounts of stress.
Bitcoin Standard says the best form of money is one where new supply is substantially less significant to add more to the already high supply. This would actually be gold today because humans have already mined a metric shitton of gold throughout the thousands of years we have been mining it. If you were to watch the show “Gold Rush” you see them mining gold using very large machines, with a lot of workers all mining the same gold just to get a few hundreds of ounces from a mine after many days of work. Those ounces may add a few hundred thousands of dollars valued in gold, but considering that the machines are rented, workers need to be paid, resources for using the machines need to be spent taxes need to be paid & melting, forming & selling at a volatile rate subtracts from the actual take home profit. How much does that actually come out to in the end? The added new supply is less significant. Apply this to Bitcoin as halving continue to happen. Less & less Bitcoin will be minted every 4 years until that year when its all dried up. Luckily we know when its completely gone because its based on mathematics, but we cant know exactly when every ounce of gold can be mined from the earth. As nearing the end of the mining of Bitcoin I would estimate that the production, just like gold will be less & less significant just like gold.
