Bitcoin - Sizzle or Steak?
Bitcoin may be sizzling but it is all steak.
We live in a world that all too often sells the sizzle and not the steak, in many cases there is no steak at all! Even more so as time preference is raised in a debt based economy that forces everyone to constantly discount the future.
The sizzle is that against the USD Bitcoin is up 5% in a day, 26% in a week, 35% in a month, 130% in a year.
8 orders of magnitude since it was first priced at 0.0009 cents in October 2009.
The steak is that no matter what the demand, Bitcoin is asymptotically inflating towards 21 million Bitcoins, or 2.1 quadrillion Satoshis, at a known rate. Nobody, no matter who they are, can change that.
Why does that matter?
The total supply (M) of a sound money represents the total stock of goods and services (G) in an economy. G is created by our collective time and energy. A fraction of that money (m) therefore represents a claim (g) on G proportional to m/M.
Work is energy over time and that is what we exchange daily for enough m to hopefully get us through the month, week, day.
Anyone who can create M at no cost can make a claim on G without making any contribution to the total stock of G. If M is unbounded, then over time m reduces to 0. The technical term for this is counterfeiting, or theft.
Bitcoin is the first thermodynamically sound money and is therefore the first theft-proof money.
It is therefore repricing everything, and it is only just getting started.