Many wonder what the ballast of bitcoin is. Because it has no underlying asset, bitcoin is seen by some as an asset without ballast and therefore purely speculative and at the risk of having its value reduced to zero overnight.
However, bitcoin has a very strong and incorruptible ballast, which is its mathematics. That is, its protocol which provides for the emission of a total of 21 million bitcoins without anyone being able to interfere with it.
To demonstrate the statement that the bitcoin ballast is its mathematics, we need to go back a little bit in time, in the history of money.
Means of payment
Over time, these papers began to serve as a means of payment for their holders. Therefore, all issued banknotes had a gold or silver correspondent kept in a safe - which gave rise to the banks.
One of the most efficient ways of identifying our investor profile is by conducting a profile test.
Have you done your profile test? Find out what your investor profile is!
PROFILE TEST
This gave rise to the gold standard, a monetary system that lasted from the early 19th century until the mid-20th century. By this standard, each bank was obliged to convert the bank notes it issued into gold (or silver) whenever requested by the customer.
Operating under the gold standard, the central bank of each country kept a large part of its international reserve assets in the form of gold. In other words, the amount of the country's gold reserves determined its money supply.
After the end of World War II, when the United States emerged as a new world power, the West had a new international monetary and economic order.
Becoming the hegemonic nation, the United States imposed the dollar as its international currency on the world. In 1944, after the Bretton Woods Accords, the pound-gold standard (1870-1914) gave way to the dollar-gold standard.
However, this system came to an end in 1971, when the United States unilaterally abolished the convertibility of the dollar into gold, determining, as a consequence, the end of the gold standard. In other words, the country now has the right to issue the international reserve currency without the gold ballast in its central bank coffers.
The story is already known: the US government issued more dollars than the products and services actually generated, causing the currency to lose value. So the question remains: what is the ballast of the dollar?
Bitcoin's rise may be fleeting, warns experts
Bitcoin: created by Satoshi Nakamoto
Back to bitcoin. Created in 2008 by Satoshi Nakamoto as a digitally scarce asset in the wake of the US real estate crisis whose effects persist to this day, bitcoin cannot suffer this kind of interference. Its mathematical protocol prevents more coins from being issued than those already foreseen in its creation.
This makes its inflation - which recently fell in the event known as halving - known until the last bitcoin is created, in the year 2140. In other words, it will not lose value like the national currencies in the monetary regime that exists today in the world.
The ballast of bitcoin is therefore its mathematics. In a totally transparent and auditable way, it prevents its corruption to the beautiful pleasure of national governments and their needs to make money in situations of greater or lesser demand.
And so this incorruptible mathematics suggests bitcoin as an asset to protect against irresponsible measures.
Know the best investments in 2020
Want to know more about investments?
Your name
Your e-mail
Your phone
(00) 0 0000 0000
How much is available for investment?
I have no money available
I agree to submit my information in accordance with the terms of use.
I WANT TO TALK ABOUT INVESTMENTS
Energy (ENGI11) reports 5.7% drop in energy consumption in May
CCR (CCRO3) has a 6% drop in road traffic in the last week
By Felipe Moreira 27/06/20
The first coins, as we know today, pieces representing values, usually in metal, appeared in Lydia (today Turkey), in the 7th century A. C. And their value was in the nobility of the materials used in the minting of the first coins, gold and silver.
As the use of the coins in commercial transactions grew, it was necessary to create a place to keep them. Gold and silver dealers, having safes and guards at their service, began to accept the responsibility of taking care of their clients' money and giving recipes for the coins.
