Bitcoin (BTC) is the solution to the loss of purchasing power and downward social mobility. However, individuals must understand the root economic issues to see Bitcoin’s true value as a savings vehicle, according to Natalie Brunell, journalist and author of “Bitcoin is for Everyone.”
Brunell is a first-generation immigrant; her family came to the US for economic opportunities, but was negatively impacted by the 2008 financial crisis, she told Cointelegraph.
“I didn’t understand the financial system at the time, Brunell said, adding that it would take over a decade for her to see that most social and economic problems are rooted in currency inflation and a broken monetary system that eats away at the value of money. She said:
“Until you learn how the financial system really works, why acquiring assets is so important, and what inflation really is, I don’t think you appreciate what’s really happening in the world and why things are breaking down.
You don’t appreciate what will potentially solve it, which, I believe, is Bitcoin,” she told Cointelegraph, explaining that Bitcoin’s supply cap of 21 million coins and decentralized, proof-of-work mining consensus mechanism create scarcity that stores economic energy.
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Time preference and the social effects of currency inflation
Price increases are only the beginning of the negative effects of currency inflation, Brunell said. Fiat currency inflation eats away at future purchasing power and incentivizes short-term thinking, creating negative social effects, she said.
Saving in a hard monetary standard like BTC encourages low time preference, allowing individuals to focus more on the future, family, health, creating paradigm-shifting inventions, art, building generational capital, and strengthening communities, Brunell added.
Fiat currencies, on the other hand, incentivize high time preference behavior and short-term consumption because the value of money is constantly eroding.
This encourages the holder to spend the fiat as soon as possible or risk losing value through the slow leak of inflation, according to Brunell.
“After we went off a hard money standard and completely into the system of fiat, the numbers speak for themselves in terms of our declining mental health, increased levels of crime, and the lack of affordability for people to own a home,” she said.
Self-sovereign money provides a critical lifeline in times of crisis
Bitcoin’s portability also makes it indispensable to Individuals fleeing tyranny, war, persecution, economic hardship, and jurisdictions ravaged by natural disasters, Brunell told Cointelegraph.
“You can take Bitcoin anywhere with you. If you needed to flee in an emergency, you can literally memorize a 12-word or 24-word seed phrase and take your whole net worth with you,” she said.
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