Ready to uncover the fascinating insights about the origins of money? from the book "The Bullish Case for #Bitcoin" 💡
We'll explore the key takeaways from Chapter 1 of the book. Get ready for a mind-expanding journey into the foundations of currency! 🌱💰 #BTC
In 2008, Satoshi Nakamoto published a solution to the Byzantine Generals Problem, which led to the creation of Bitcoin. Bitcoin allows for the transfer of value without relying on a trusted intermediary such as a bank or government.
Bitcoins are created through a process called mining, with a fixed production schedule and a max of 21 million #BTC that will ever be mined.
Bitcoins are not backed by any physical commodity or guaranteed by any government or company, and their value is set game-theoretically.
Early human societies used barter trade, which was limited by the double coincidence of wants problem. Humans evolved a desire to hold certain collectible items for their rarity and symbolic value.
Collectibles allowed trade between otherwise antagonistic tribes and allowed wealth to be transferred between generations.
Early man faced a game-theoretic dilemma when deciding which collectibles to gather or create, with the anticipation of future demand conferring a tremendous benefit on the possessor.
Societies quickly converge on a single store of value, known as a Nash Equilibrium, which greatly facilitates trade and the division of labor. As human societies grew and trade routes developed, stores of value from different societies came to compete against each other.
As human societies grew and trade routes developed, stores of value from different societies came to compete against each other.
Merchants and traders had to choose whether to save their trade proceeds in their own society’s store of value, the store of value of the society they were trading with, or a balance of both.
Holding savings in a foreign store of value enhanced the ability to conduct trade in the associated foreign society and provided an incentive to encourage its adoption within their own society.
Two societies converging on a single store of value would see a decrease in the cost of trading with each other and an increase in trade-based wealth.
The nineteenth century saw most of the world converge on a single store of value, gold, leading to an explosion of trade.
