Fixed Supply vs Infinite Printing

Here is a short history of every major currency ever created:

It started scarce. It became abundant. It lost value.

The Roman denarius was pure silver for centuries. Emperors gradually reduced the silver content to fund wars and expenses. By the 3rd century AD it was mostly copper with a silver wash. Prices rose. The empire weakened.

The British pound was once literally a pound of sterling silver. Today it buys a fraction of what it did a century ago.

The US dollar has lost over 96% of its purchasing power since the Federal Reserve was created in 1913.

The pattern is identical every time. A currency is created with a fixed or limited supply. Governments discover they can expand that supply to fund spending. They do. The currency loses value. Citizens suffer.

Now look at Bitcoin.

The supply was fixed at 21 million on the day it launched — January 3, 2009. It has not changed. It cannot change without the agreement of the overwhelming majority of the network, which has never and likely will never happen, because it would destroy the very property that gives Bitcoin its value.

For the first time in monetary history, a currency exists whose supply cannot be expanded by any government, any institution, or any individual.

Every other currency in history has been a bet on the discipline and honesty of whoever controls it.

Bitcoin is a bet on mathematics.

Tomorrow: what “sound money” actually means — and why Bitcoin might be the first true example.

— The Daily Bit