Where does the resilience of Bitcoin come from take a look at these fiat currencies

Uncovering the Reasons Behind Bitcoin's Resilience A Comparison with Fiat Currencies

Author: Kraken; Translator: LianGuai0xjs

On October 31, 2008, Satoshi Nakamoto anonymously published a whitepaper on a decentralized “peer-to-peer electronic cash system”.

The Bitcoin whitepaper was a direct response to the systemic weaknesses exposed during the 2008 financial crisis. With its fixed supply and decentralized nature, it proposed a fundamental alternative to a global government-issued currency system.

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One million drachmas, Greece, 1944

Issue: Politicization of Currency

The value of government-issued currency comes from the trust that holders have in the institutions (such as central banks) responsible for issuing and managing the currency.

These institutions benefit from a good governance reputation. However, the level of trust citizens have in them can change over time. When trust becomes the primary determinant of a currency’s value, anything that challenges this trust can have a negative impact on the currency’s value.

Five hundred million dinars, Croatia, 1993

One of the most notable recent examples is the Turkish lira, which has experienced a collapse in its exchange rate against other global currencies. This is largely due to persistent inflation and a ridiculous policy concept of keeping interest rates close to zero (encouraging aggressive borrowing and spending), which undermines confidence in the Turkish government’s financial management capabilities and only accelerates the devaluation of the lira.

21 Million vs Unlimited

The risk of a trust-based currency system is exponentially increased as governments can arbitrarily print money. There is no longer any government or central bank issuing asset-backed currencies. This makes it easy for officials to print money in an attempt to mitigate any form of national crisis.

10 quintillion (million to the power of three) pengő, Hungary, 1946

But the problem is, unrestricted money printing leads to more and more currency chasing limited goods. This always results in people having to pay higher prices for the same goods.

10 million Zaires, Zaire, 1992

More

Currency failures are nothing new. Throughout history, there have been government-issued currencies that have been printed until they become completely worthless. For centuries, printing money has been the de facto solution for governments during times of war, financial pressure, or social unrest. As a country’s currency is diluted by the entry of more and more money into the market, people’s trust in it is further weakened.

50 billion Dinars, Yugoslavia, 1993

In the early 20th century, Germany’s gold-backed currency, the Mark, was one of the most stable currencies in the world. After the outbreak of World War I, the government abandoned the gold standard and introduced a new currency, the paper Mark, to fund its war efforts. The paper Mark quickly lost its value, and this process was accelerated after Germany’s defeat in 1918.

German officials took the usual government approach as a last resort: print more money, and print faster. This led to one of the most severe hyperinflation events in history. By 1923, pre-war 1 Mark was equivalent to 1 trillion Marks later on.

20 trillion Marks, Germany, 1923

This highlights an important fact: trust is the unstable foundation of a currency system. Trust can last for a long time, but when there’s nothing else supporting it, government-issued money is fragile in the system. While printing more money in large amounts often prevents an immediate crisis from turning into a catastrophic collapse, it also reminds the citizens of a country that their government is creating money out of thin air.

1 million Pesos, Argentina, 1992

But you have a new choice: Bitcoin

Bitcoin is specifically designed to address these risks. It is a system built on a fixed supply and a transparent, tamper-proof ledger, carefully designed so that its holders will not be left with a currency forgotten due to inflation caused by political reasons.

According to the algorithm, the supply limit of Bitcoin is set at 21 million coins. This inherent scarcity preserves its purchasing power. It is the same reason why gold has maintained its value for thousands of years: its supply is relatively fixed, and its main determinant of value is demand. It was created billions of years ago from a cosmic explosion, and humans cannot print more of it.

1 million indi, Peru, 1990

Bitcoin has no central authority. It is not influenced by the whims of government institutions, individual leaders, or financial institutions. The rules that govern Bitcoin are transparent and apply equally to everyone, regardless of where they live, what they look like, or who they know. Everyone is treated the same: with reliable money.

We are all witnessing the future of finance

Bitcoin is a beacon of stability, a currency system for the digital age, custom-built based on centuries of failed experiences. Since its inception block, Bitcoin has provided a reliable means of decentralized exchange and value storage.

2 million zloty, Poland, 1992

Automating service for the people: Bitcoin can

In the past 15 years, Bitcoin has been declared dead 474 times. However, it continues to work, executing code without emotions, while some people launch malicious attacks and angry complaints against it. Day after day, more and more citizens around the world are realizing that no amount of doubt or slander can change the simple fact that Bitcoin operates as intended.

1 trillion Zimbabwean dollars, Zimbabwe, 2008

Therefore, as we celebrate the 15th anniversary of the release of the Bitcoin whitepaper, we are heralding a new era in monetary sovereignty, where individuals can take control of their own wealth.

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