Is bitcoin the future of Money?

Hello friends, in today’s article, we see whether is bitcoin the future of money? what happens in the future if cryptocurrency is ruled by the government, let’s understand all questions answered in this blog.

Previous Article on Bitcoin

Is Bitcoin the future of money:-

Is bitcoin the future of Money?

Before starting this discussion, I read a previous article on bitcoin, in which we discuss very well about currency and investment in bitcoin.

let’s see from our perspective

Our Perspective:-Is bitcoin the future of Money?

By seeing our perspective, some question arises, like

Is anyone use bitcoin for currency purposes?

the answer is No

Because, most people only use the currency for small transactions, on a daily basis.

so because of this reason, people don’t wait for 16 or say 18 hours for a small transaction to complete.

so bitcoin and Blockchain will be choked with transactions all the time.

if the common man makes a mistake while doing his transaction, then they lose money permanently, because there is no middleman to recover our payment. (Is bitcoin the future of Money?)

so Payments are irreversible if the user makes an error.

so everything goes on software, you very well know that software is not emotional.

and other things that it’s very difficult for the average person to understand and use for the common man.

and also common man is not financially literate and handling lots of private keys is difficult for them. if one of them lost the private key, so they lose the whole money, present in that amount.

Some people say Wallet handles your all private key,

so for this, I say most Wallet is hacked and a valley employee stole the private key and get all the bitcoin, that account has. and we can’t believe in their securities practices, because, this is not regulated properly.

So common man doesn’t care much about decentralization or a middleman-free system.

they only care about, whether my transition is complete or not

so the common man needs this type of system that is easy to use, and if makes any mistake gives forgiveness and does fast payment.

this is from the common man’s perspective, now let’s see the Governments perspective

Government Perspective:-

before, that question arises, like whether is government adopts bitcoin-type crypto as a currency and runs properly.

so the government does not accept or run this type of currency, Because,

to regulate the economy, the government should have control over the money supply, and its importance.

if the government runs the bitcoin as a currency, then as we discussed previous article, ( above link) the deflation starts, and the great depression comes again, so we go 1000 years bank, in that time central bank does not exist, or if exist they don’t control the money supply. (Is bitcoin the future of Money?)

and it’s too difficult to manage the money supply and it’s very difficult to run the economic cycle properly.

In the economy, have the more transaction so

Bitcoin, can’t handle that many transactions in small time, because of its scalability problem and the delay in executing transactions.

So normal times, not the common man or government, doesn’t leave their own currency and does not adopt the bitcoin currency.

but those countries can adopt bitcoin as currency because their currency has a bad time.

just like in 2008 in Zimbabwe countries, and in  2019 in Vanizola, got Hyperinflation

In Hyperinflation, inflation can goest up to 10,000,000% in a year.

so bitcoin is not that much Volatile, so these countries use Bitcoin as a currency.

so when bitcoin was created, they got an argument or say rules, for bitcoin or purpose.

government or central bank can not increase their money supply and decrease the money value. (Is bitcoin the future of Money?)

This means those people make money very hard, and some money in the bank, their money value decreases

so some people develop such a currency ( bitcoin0 in that way so government or central bank can’t devalue it.

so funny thing is that now a day

Those currencies use to cut down the bank and government money system. so that currency technology, use to run the banking process smoothly and make it more powerful and that currency is regulated by Government.

so the final conclusion is that bitcoin is not a future of money.

but may happen, this, people want crypto-type currency then, they can develop their own virtual currency like rupee coin, etc.

so this is all about the is bitcoin the future of money.

Is Bitcoin a Currency or an Investment?

Hello friend, in today’s article, we see is bitcoin a currency or an investment? and what is the effect on our economy and how we can use it for our best use? so let’s see each and every factor.

Previous Bitcoin Article

is Bitcoin a Currency or an Investment?:-

Is Bitcoin a Currency or an Investment?

before the start, let’s understand these terms

Currency means, a medium of exchange,

Investment means, allocating resources for profit.

before considering bitcoin as a currency, understand what is the factor that leads to currency.

A most important requirement of a currency:

Stability:-

Stability is the most important requirement of a currency, so let’s understand, bitcoin is stable or not.

if the currency is not stable, then it’s difficult to exchange.

let’s understand with an example

Suppose you want to take 100 rupees in payment from someone, and you get at the morning. and evening currency prices go down up to 90 rupees, then this type of volatility you don’t like it and this type of currency no one use it.

Is Bitcoin Stable:-

So the answer is, No

Bitcoin is extremely volatile because bitcoin is not a good currency.

Let’s suppose for a minute

is bitcoin a good currency if it becomes stable?

Now, we can use as currency for this question answer is No,

Because of the problem of scalability.

In bitcoin, by increasing trading volume it takes 16 hours to execute the transaction and increases the transaction fee.

If our world’s transaction is on bitcoin, then their trading transaction execution period takes a week to complete and the fee goes to maybe $100.

So no one waited for this time period and no one want to pay that high fee.

Let’s suppose for a minute, the Problem of scalability is solved

is bitcoin a good currency if it becomes scalable?

The answer is, No

Because bitcoin supply is not controlled by central banks or the government ( reserve bank) to run the economic cycle very well.

Money supply may increase or decrease by the reserve bank ( central bank). so bitcoin is not controlled that’s why the answer is no.

If the government increases the money supply more than GDP growth, then inflation increases.

Inflation is good, that’s why the economic engine (cycle) works well.

inflation means your money value decreases in the next year.

Because of inflation, this thing people get helped or motivated to invest their money and spend wisely.

so in bitcoin, the money supply is fixed, so inflation is impossible, but deflation may happen.

Deflation means, your money value increase in the next year, so because of this people don’t spend money or do not invest money in this activity, economic engine stop.

and like in 1929, the Market crash, after this crash, the great depression comes, that type of thing happens if deflation of money increases so recovery takes almost 10 to 20 years in future.

In summary says, If all problems solve with bitcoin without the permission of center and government this bitcoin can’t use as a currency or not work as a currency.

if government interference is required to use bitcoin as a currency, then why government uses bitcoin as a currency, then they can use their own digital cryptocurrency like rupee coin, etc.

so above discussion, we conclude that bitcoin is not a good currency.

 

so now let’s see whether bitcoin is an investment or not

 

A most important requirement of an investment?

Growth:-

Is important to become an investment.

has bitcoin shown any growth? the answer is

yes, bitcoin gives, a 1,000,000X return ( you can read the previous article) in 10 years

so this type of growth, not even the stock market gives.

Bitcoin is a very high-risk, very high return investment option.

so this investment is not like Benjamin Graham, Warren Buffett, and Charlie Munger’s definition of investment.

for this speculation option to be precise.

Bitcoin is just like, bonds and stocks, but the only difference is bitcoin’s value comes from intersubject reality

means, people things, ow bitcoin has value is $150,000. so big value becomes that if everyone thinks the value is zero, then their value becomes zero.

anything, cannot be currency and investment both at some time.

Because stability and growth can not exist at the same time.

If stability has then growth can not exist at the same time.

if growth has then stability can not exist at the same time.

so people whatever say, like, bitcoin is currency, they can replace bank, but actually everyone thinks Bitcoin is an investment.

to prove this point,

when the bitcoin price goes stable, by seeing the price of bitcoin, people don’t get happy, they get worried about why people’s bitcoin goes high, and say bitcoin stop going higher.

Because people stop accepting bitcoin so above thought needs profit, not a currency lover.

so the last conclusion is that Bitcoin doesn’t have a currency future but bitcoin can become part of investments like bonds, stock, and cryptocurrencies.

How Bitcoin’s Prices Increases in Past?

Hello friends, In today’s article, we see how Bitcoin’s prices increase in the past, what are the reasons behind that, and most important question, if Is there any chance bitcoin prices goes up in the future. so let’s see them one by one.

Previous Bitcoin Article

How bitcoin’s prices increase:-

How Bitcoin's Prices Increases in Past?

 

so, friends, anything product price depends on the supply and demand of that product.

Let’s talk about the supply of Bitcoin

We all know that only 21 million bitcoin, can be created up to 2140.

Supply-side of Bitcoin:-How Bitcoin’s Prices Increases in the Past?

By the time bitcoins supply speed also going down. In the previous 12 years back, every 10 minutes, new 10 bitcoins is created so nowadays, 6.25 bitcoins are created in 10 minutes,

so Slowying block rewards every 4 years is like

  • 50 BTC in 2009
  • 25 BTC in 2013
  • 12.5 BTC in 2017
  • 6.25 BTC in 2021

After the 21st century, the supply chain of bitcoin must slow down, so next 4o years only 1 bitcoin is created.

So on we understand that the supply side is limited,

and It was predecided when bitcoin was created, and everything works on a rule.

means, Price increases just because Demand is high.

so now let’s see the demand side

Demand Side of  Bitcoin:-

From 2010-to 2014 the demand increased due to publicity ( negative publicity)

Criminals use bitcoin to buy and sell drugs, give murder rewards, and do many other illegal things.

With news, Bitcoin gets publicity. Whatever it is negative?

But people know about this and the bitcoin price is increased.

but from 2010 to 2014, buying bitcoin is difficult for the common man, because, at this time, only know how to buy bitcoin, those people know how to save tax, etc. people only bought the bitcoin, between this period.

post-2014, People getting easier to invest in bitcoin. (How have Bitcoin’s Prices Increases in the Past?)

Because so many application comes and common people easily buy bitcoin.

so bitcoin demand increases, so the price also increases.

so increasing the price of bitcoin, peoples say, Bitcoin is far better than the stocks, and bitcoin give 5 to 10 X return.

People are doing speculation on a bitcoin and demand increases for Bitcoin.

In this process one problem was found, when demand increases at such a speed, the supply is limited. or not increases that speedily.

up to now, that’s much bitcoin is created between 30% of bitcoin is lost. This means people who own bitcoin forgot their private key ( those people don’t know about private keys, read this article about bitcoin story).

Another thing is, that those people have the Bitcoin they don’t want to sell, and they say I am holding it.

Bitcoin is very slowly created.

so in short say, 30% of bitcoin is lost, other people keep holding and slowly bitcoin is created, and people need bitcoin to buy for speculation for that things. (How Bitcoin’s Prices Increases in the Past?)

Bitcoin prices go higher.

for this purpose, the bitcoin price may go to $100,000 or $1,000,000. or maybe the bitcoin price goes zero if the bitcoin price is going down. this depends on the people’s thinking.

 

so the conclusion of the article is Bitcoin’s price is going up just because of demand.

in the next article, we see whether Is bitcoin a currency or An Investment.

so this is all about how bitcoin prices go up.

What gives Bitcoin Value?

Hello friends, in today’s article, we see what gives bitcoin any value. If bitcoin has any value, so then what things, give the value? so let’s understand step by step.

Previous Bitcoin Article

Fiat currency and What gives Bitcoin Value?:-

What gives Bitcoin Value

In history, Food, animal, gold, and silver coins were used as currency.

Because Food is valuable, we can use it for eating purposes. animal-like cow, goat gives the milk for drinking.

and gold and silver are valuable because they increase the beauty of a person that wearing. not just because they are limited sources.

So nowadays, we use the currency called Fiat Currency as money

Fiat money means, someone, who has the power, to take a paper and write down 100, then that paper increases a value equal to a hundred. (What gives Bitcoin Value)

by taking other colored paper, and writing on that 2000, then that paper value is about 2000.

Fiat money doesn’t have, its own value like food (used for eating), Animals (which gives milk), and not like gold and silver to increase beauty.

Fiat money has value because the government tells us. and they only have two uses

  1. Legal Tender:- That means, in India, everyone accepts the money, and no one rejects it. If they do, they go to prison.
  2. Tax Payment:- so staying in India, everyone has to pay taxes to the government to run the country. and they accept tax in Fiat money.

fiat money backed by trust in the government, means you believe that with much fiat money you have,

you can buy things, so no one rejects that money in your transaction. and you have a big belief in this. (What gives Bitcoin Value)

On the other side says, ” Fiat money is backed by Fear of government.

if you do not accept this fiat currency, then you go to prison.

The above discussion is about fiat currency, let’s come to the main points of what makes bitcoin valuable.

to understand better Money system, I highly recommend reading Robert Kiyosaki’s book,

What makes Bitcoin Valuable:-

  1. Is Bitcoin valuable, because, its supply is limited, As we know only 21 million bitcoin is the only exit on the planet.

Only giving a limited supply, does not mean they have value.

suppose, for me, that things don’t have any value, so for me they are worthless, whatever, their number is

2. Is Bitcoin Valuable because creating them is costly? ( high cost of creating bitcoin)

Bitcoin costs, like one-year electricity of two countries like Singapore and Switzerland, required electricity for one year, more electricity is required to create a bitcoin, than this country’s electricity. (What gives Bitcoin Value)

So bitcoin, the value must be that much, that much cost require to create them.

Suppose, creating any product, we required 1 lakh rupees, but people don’t require that product, which means that product value is zero.

So any product or things don’t have value because they have limited supply or require more money to create.

Because they have value, it means that the product is desirable and people want those things.

What makes Bitcoin Desirable:-

Because of bitcoin, you can pay direct online payments from one person to another without any intermediary/ censorship.

Payment happens in a cash by seating in the home. Are things possible because of math (cryptography) and technology

Are things possible because of math ( cryptography)

fiat money is backed by the government, just like Bitcoin is backed by math ( cryptography)

which transaction is valid, how much Bitcoin is created, how speedily it is created, all things happen by using math( cryptography)

Because, Bitcoin payments happen, without the interaction of the Government and banks. (What gives Bitcoin Value)

so for criminals, Bitcoin is a valuable and useful currency. e.g. Buying drugs, selling drugs, murdering someone, and giving rewards in bitcoin.

so like this, works Bitcoin, in the initial time, and have the most useful value for criminal.

But nowadays, the common man needs Bitcoin and bitcoin has value for common people also.

let’s why this,

Any paper is valuable because everyone thinks it is valuable this is called Intersubjective reality.

means, that if everyone accepts things, and has value, then they become valuable.

Suppose, someone, writes on paper, and 10,20,50,200,500,2000, and everyone accepts that this paper has value, whatever the number is written on it. and everyone accepts and they decide to exchange this paper, in our society, we accept this paper in our transactions and use it as money.

If our acceptance is self-sufficient then everyone uses this paper as currency. and everyone pays their bills, tax, and other traction in these papers.

when people make noise on bitcoin and say, Bitcoin is valuable, then it gets valuable.

When in the initial time, Bitcoin is not famous, in that time everyone thinks bitcoin mining is a game and bitcoin is a toy. (What gives Bitcoin Value)

When one person orders two pizzas with 10,000 bitcoin. then this positive feedback started and first-time people think bitcoin is valuable and people buy pizza.

If someone accepts bitcoin on selling pizza, that direct means, that person thinks bitcoin is valuable. and another person also takes bitcoins from that pizza owner means other things can buy with bitcoin.

With intersubjective reality, bitcoin is valuable. because, for a common person, this technology is useful, nowadays.

but there is one problem with Intersubjective reality. when this currency comes to end, they are destroyed in a few minutes.

or says they end very easily.

Let’s understand Intersubjective reality as one problem with the story.

In America. Those people living from start in America, those people called Native Americans.

and they have different, different tribes, and in that time

Wampum was used as a currency to exchange things.

Wampum is like the type of necklace,

Wampum they use because one tribe knows, that other tribes also take this for the transaction., and the second tribe knows the third one also takes this. so this thinking goes on and on

when Europian comes in 1700 in America, they bring their own europian currency, with them.

so they exchange their currency with big tribes and do transactions only in European currency.

so big tribes, stop accepting the Wampum currency, and that an effect, spread whole over America, and tribes stop accepting WAmpum as the currency of exchange. (What gives Bitcoin Value)

and they only use European currency so with small change, the whole Wampum currency is destroyed, this problem has in the intersubjective reality.

so this is all about bitcoin value.

FIRE Movements in Life

Hello friends in today’s article, we talk about the FIRE Movements. FIRE means Financial Independent and Retire Early). Everyone wants to retire early, so for that, we writing this blog. so let’s understand how to get retire early.

so let’s start

Financial Freedom

Fire movements:- Financially Independent, Retire Early)

The FIRE movement, the concept was given in the book, Your money or your life by Vicki Robin. so let’s understand how we can use this concept to get financially independent and retire early in life. before starting you have to make the financial Target that defines your financial independence.

FIRE Movements in Life

So let’s start with our income source

Income Source:-

so if you want to be financially independent, you have to first step is income source. In Financial Freedom, you have saved money, and multiply your saving by investing this money.

Money people think, how much I can save, in this you can save up to 70% of your income. but, most people can’t save that much, so you can save, how much you can save, that’ may be more than 10% of your income.

when start saving first from your income and then you have to manage your spending within your remaining income.

In this, you have to be very frugal living, cut out the big expenses, and save money.

then you have to multiply your savings money.

Multiply Your Saving:-

Just saving money, is not enough, if you only save money, and put it in the Bank, then inflation eats your all money, and the negative compounding effect works against you.

so for that, you can invest this money in the stock market, because, the stock market gives more return than, any financial instrument.

when you invest in Stocks, its means, you are buying the pieces of the company’s business.

So when you invest in a wonderful business, that means, your saving money multiply not only 10, or 100 times, they can be multiplied by 1000 times, after two decades. (FIRE Movements in Life)

Before investing, you have to confirm, that, you have 3 years of money, to maintain your lifestyle and family expenses, can handle for three years, and only remaining surplus money you can invest.

Because the stock market is very volatile, when you need money in the next year, then you get some losses, so be confirmed, you have an emergency fund, and 3 years of lifestyle maintaining money.

You can learn, about money from books, some of the books as the intelligent Investor, One Up On Wall Street, Common Stocks, and Uncommon Profits, Stocks to riches, etc.

Example to Achieve FIRE Movements:-

let’s take, a normal example of a Teacher ( Ramesh), that has only Rs. 30,000 per month income,

so according to the FIRE Movements, you should invest 50 % ( more than 10 % of income)

Rs. 15,000 per month you can invest in the stock market or you can do the SIP.

so Ramesh has decided that 1 crore rupees are their retirement amount.

so Ramesh is 40 years old.

let’s do a calculation of how much time to make 1 crore rupees by just saving money

Rs. 15000 ( saved money/per month) * months ( 10,000) 833 years = Rs. 1,50,000,00

so it’s impossible for the teacher ( Ramesh ) to get their FIRE Movement in a single life, so for this, you have to get the help of the Stock Market.

so let’s understand, if they invest, how much they get after 2 decad

see the following screenshot, you may surprise.

 

 

if you invest like this, only 20% of return for 20 years, can bring the 3 crore rupees for your retirement.