When the ship goes down, better be ready, to step onto Land.
How we should be looking at Bitcoin and other Cryptocurrencies Relative to Fiat.
Face it, the writing is now very clearly on the wall, describing the very near end of fiat currencies as anything useful to ordinary people.
Just as recorded in the historical accounts of the Weimar republic, it is only a matter of time until the purchasing power of our money drops through the floor.
There are a few key differences between what happened there, and what is happening now.
Firstly, this time, instead of one country owing impossible debt to some others, it is all countries owing impossible debt, to “The Banks”.
Key to understanding how that happened, is understanding how banks, and the instrument that they made their own; fiat money, actually works.
Money as debt.
For those not yet informed how that works; Google out the film of that name by Paul Grignon. It is all explained there in simple detail. As pointed out in the film, this is something never taught in school.
But I digress.
That was history.
Now, and the future, is what this article is really about, referenced to events of the past.
The second, much more important difference, is that we now have cryptocurrencies.
This difference applies to the days of the Weimar republic, and indeed also even the previous financial crisis, of 2008.
Alternative currencies, independent of both Banks and Government, are available, to all people.
The Banks and their supporters, in the years since the first appearance of Cryptocurrencies (Bitcoin), have done everything in their power to try to crush this development, recognising it as an oncoming threat to their power.
That power is entirely one of credibility.
The instant a cryptocurrency gains more credibility than fiat, is the moment when fiat currency will draw its last breath.
Until now, the Banks have managed to convince most people that cryptocurrencies cannot work as a replacement of their money.
Their main argument is still that the volatility of cryptocurrencies renders them useless as every day ordinary money.
However, that argument is only valid in the presence of fiat.
It is fiat which is being used to destabilise cryptocurrencies.
After the confidence drops from fiat, it will no longer have any power to destabilise, therefore the main source of instability in cryptocurrencies will have disappeared.
Currency traders and speculators will no longer be able to rock the cryptocurrency “boat”, using fiat.
The above analogy is reasonably useful, to get a picture of how the value of cryptocurrencies seem to rock, relative to how we might perceive “Landed” fiat currency.
Until we realise this is actually the wrong way round.
Until we realise what is actually rocking, and what is not.
The value of cryptocurrencies actually track the value of commodities more closely than fiat.
Commodities are things that need to be purchased using money.
So, relative to the things we need to buy, cryptocurrencies are more stable than fiat.
The truth is, by valuing all things in terms of fiat, we are actually standing on the boat, pointing at the land, remarking how much it appears to rock.
And the boat is sinking.
Pretty soon, we are going to have to step onto the land.
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Update 25 June, 2020: Though indeed, fiat currency value is dropping relative to gold and Bitcoin, it is not the end of fiat, but the beginning, of an incredible new paradigm for fiat, with incredible positive implications for humanity. See my most recent posts for the most recent developments