The difference between fiat and crypto
Fiat currencies are legal tender controlled by governments. Cryptocurrencies are digital assets that use blockchain technology.
Fiat currency value is also determined by the amount of currency in circulation. When too much money is printed, the value of the currency drops. In other words, newly-printed money borrows value from the money already in circulation.
Cryptocurrencies are digital assets that use blockchain technology, or a similar distributed ledger technology, to track, validate, and secure transactions. These currencies can be used as a store of value, for speculative trading, or to unlock utilities specific to a given token
The trust in money
Fiduciary money, the kind we use, is based on trust and on a guarantee principle upheld by a centralizing institution such as the European Central Bank or the US Federal Reserve.
In the case of Bitcoin, trust is based on the network: users, developers and miners. Buying Bitcoin means choosing to place your trust elsewhere than in institutions.
Bitcoin and gold
I like to compare Bitcoin to gold. I think of Bitcoin as digital gold.
While gold is presumed to be finite, the reality is that its supply can be influenced by mining activities and new discoveries. Conversely, Bitcoin has a set limit of 21 million coins that no single person, entity, or group will ever be able to change
bitcoin is deflationist
A cryptocurrency is inflationary when its supply increases over time. Bitcoin is deflationist. Bitcoin is called a deflationary currency: the rate at which money is printed is slower than the rate at which currency is lost or hoarded by investors. In the fractional reserve banking system (what fiat money uses today) there is, for all practical purposes, unlimited money supply.
the halving
bitcoin’s scarcity will reach unprecedented heights after the crypto’s next halving. This process, scheduled to halve miners’ rewards every four years, is poised to significantly increase the scarcity of BTC.
Bitcoin price predictions
every expert agrees that bitcoin price will soon increase but the price predictions are not the same.
Adoption of Bitcoin by ETF , and institutions could bring the price away 150000 dollars between 2025 and 2030.
sources : https://hedera.com/learning/fintech/fiat-vs-crypto
https://www.bloomberg.com/news/newsletters/2024-03-06/what-s-behind-record-highs-for-gold-and-bitcoin
