What value does Bitcoin create?

 Today, I'm going to talk about what value Bitcoin creates. The so-called anti-Bitcoin forces say that Bitcoin does not create any value and is useless garbage. Warren Buffett's old colleague, Charlie Munger, even went so far as to denounce Bitcoin as disgusting. I respect Charlie Munger's investment philosophy and history, but I disagree with his opinion on Bitcoin. I think Bitcoin creates three values. Now let's see what value Bitcoin creat

What value does Bitcoin create?

When I invest in any asset, the first thing I look at is whether it makes the world a better place than before it existed. In other words, we focus on what kind of value the asset creates and proceed with the investment when we judge that it creates sufficient value. As I continued to explain in the last post, I am still steadily collecting bitcoins and plan to do so in the future. I am buying and accumulating bitcoin thinking that it creates three values.

First, Bitcoin has the value of holding back against the reckless printing of currency by a small group of people with the power to issue currency. Bitcoin is an asset with a fixed issue volume of 21 million. On the other hand, it is known that the number of dollars issued is not fixed, and even if it is printed infinitely according to modern monetary theory, there is no problem.

However, most people must have clearly felt what kind of adverse effect the inflation caused by the currency that has recently been released like crazy is having on the national economy. The Fed is also hastily and hastily raising interest rates to prevent inflation, a side effect caused by the frantically released currency. If the interest rate rises, the people who have a lot of debt again will suffer the pain intact. Since there is no means of check, the amount of currency issued has continued to increase upwards, and will continue to increase upwards at a faster rate in the future.

Bitcoin is the means to contain this situation. Bitcoin is limited to 21 million, and the price of Bitcoin will skyrocket like crazy as the dollar is printed carelessly. The rise in the price of Bitcoin, which is on the other side of the dollar, is not welcomed by the powerful groups with ticketing power. Thus, Bitcoin checks the act of printing money carelessly by a small group of power.

Second, it can be a solution to financial energy that is unstablely invested in the market only as a means of storing value. There are two main reasons why individuals invest in any asset. First, to enjoy the value created by the asset itself.

For example, the reason to buy real estate is because there are benefits that can be enjoyed by living in an apartment or house. Real estate plays a role in providing safe nests and keeping them safe from dangerous weather and animals. Individuals buy real estate to enjoy these benefits.

A second reason individuals invest in assets is that humans need a means to store value. Taking real estate as an example again, the reason why an individual buys two or three real estate even though it is not the house he will live in is because he needs a storage place to store his wealth. Individuals must choose a repository to store their wealth. Because the rich use real estate as a store of value for wealth, the price of real estate soars beyond the actual value it actually creates.

However, since Bitcoin was born, more and more people have experienced that Bitcoin can do a great job as a store of value. In the future, the more wealthy people who have the perception that Bitcoin can play a great role as a store of value, the more Bitcoin will monopolize its role as a store of value. In that case, the money that has been unstablely invested in stocks, real estate, gold, copper, and silver as a means of storing value will gradually flow into bitcoin, and the prices of stocks, real estate, gold, copper, and silver will stabilize at a price equal to the value they create. .

Third, it has values ​​that allow people around the world to exchange values ​​without restrictions. If the Internet was a solution that allowed people around the world to exchange information without restrictions, Bitcoin is a solution that allows people around the world to exchange value (money) without restrictions. 

Thanks to the development of the Internet, people all over the world can exchange information with each other without restrictions.

However, despite the development of the Internet, people all over the world are still unable to freely exchange value (money) with each other. For example, let's say that Mr. Hong Gil-dong, who lives in Korea, wants to send 100 billion won to Mr. So-and-so in China at 3 am in Korea time. It will probably be close to impossible. Because it is a large amount of money, various tackles will come in, and especially in China, it will be censored. Also, it would be very difficult to move a large amount of money of 100 billion at 3 am. On the other hand, let's assume that the same person, Mr. Hong Gil-dong, sends 100 billion worth of Bitcoin to Mr. So-and-so in China.

In the blink of an eye, 100 billion worth of bitcoin will be safely transferred to Mr. So-and-so's personal wallet in China without any restrictions. Also, if you think about the inconvenience of exchanging money when traveling to another country, you will be able to sympathize with the comfort of using a single currency called Bitcoin. Bitcoin will slowly move towards enabling people around the world to send and receive value without restrictions.

In this way, we looked at the three values ​​that Bitcoin creates. Investors who are investing in Bitcoin must be in a tiring and difficult situation right now because Bitcoin, which has recently collapsed, has been sideways for a long time at a low price level. But Bitcoin is definitely a disruptor in finance and an asset with the potential to make the world a better place. As I kept saying, Bitcoin is an asset with a fixed supply, so you only need to care about the demand for the price to rise.

I think that as time goes by, this world is in the process of rolling with a structure that has no choice but to gradually intensify inflation. In an era where high inflation is the norm, Bitcoin will become increasingly necessary. In other words, it means that Bitcoin is an asset that has no choice but to steadily rise in the long term. I collect bitcoins today, focusing on the long-term value of bitcoins rather than focusing on the short-term price of bitcoins in dollars that will be released indefinitely.