Part One of an Ongoing Series
What niche did Bitcoin, and it's subsequent descendants, direct and indirect, appear to fill? The gold standard of fiat currency.
I will probably get some disagreement here, but the gold standard in the United States was around until 1971, albeit with a lot of changes to the how and why it was a "standard". Let's just make it neat and tidy and say that the US Dollar was backed by precious metals and since, like Bitcoin, gold had to be mined, resources sucked away to procure it, it had intrinsic value.
Likewise, Bitcoin must be "mined", and if you are here on Steemit reading this, you're wondering why the hell I am taking the time to point this out. Reason being, I have discovered, that not all are aware that the US dollar, the medium of exchange in most of the world, is no longer backed by gold or anything else, other than a wish and a prayer. Thanks Federal Reserve!
Now, again, because I like simple explanations, the Federal Reserve is a nationalized bank, and it prints money when it feels like it. There are more, and have been, dollars than can ever be redeemed for gold or anything else. Inflation, at it's most basic, since "I can't be overdrawn, I still have checks in my checkbook."
We come to the present day, and everyone has a blockchain. We even have the most honest Ethereum token ever, whose symbol is literally a middle finger and advertises itself as being worth absolutely nothing. The next ICO, initial coin offering, spikes the price of Ethereum, and then there is a good old fashioned bank run, so they can turn those tokens into fiat as quickly as possible. Why, because we still need to buy milk and eggs.
Unlike the U.S. dollar, the supply of bitcoins is fixed. The total number of bitcoins that will ever exist is fixed at 21 million bitcoins in circulation (currently, there are roughly 16.5 million). The last bitcoin is expected to enter circulation around 2140. Gold is produced in the heart of a supernova, so I hear, so unless we start the wholesale slaughter of stars to produce gold, then though limited, gold is less finite than bitcoin.
Gold and bitcoin have some problems. Gold is heavy, can't be easily carried around and traded, etc. Bitcoin is becoming "heavy" as government regulators step in and demand their piece of the action, transaction fees become ridiculously high making moving smaller amounts prohibitively expensive, and probably it's heaviest aspect, is that people aren't willing to give up that cash in hand.
What happens though, when that backing of "full faith" provided by the government evaporates. Really, have you seen the inmates running the asylum? It is not going to get better, politicians are in it for themselves, career politicians, being the worst of the bunch.
