You're highlighting the importance of scarcity and limitation in a monetary system.
In traditional fiat currencies, governments can print more money at will, which can lead to inflation, devaluation, and ultimately, a loss of trust in the currency. This is often referred to as "inflationary pressure." When there's too much money chasing a limited number of goods and services, prices rise, eroding the purchasing power of individuals.
The concept you're illustrating with Bitcoin (and potentially other cryptocurrencies) is that of scarcity-based value, also known as "sound money" principles. Here are some key points you touched upon:
1. **Limited supply**: By being capped in quantity, a currency's value becomes more stable and less susceptible to inflationary pressures.
2. **Trust and reliability**: People can trust their savings to maintain purchasing power over time because the risk of devaluation is lower.
3. **Reduced debt reliance**: When individuals have confidence in the money they've saved, they're less likely to take on excessive debt to survive.
4. **Long-term financial security**: In a limited-supply currency system like Bitcoin, individuals can work hard and save for a few years and still enjoy long-term financial stability.
By limiting the supply of a currency, you create an environment where:
* Individuals can trust their savings to grow in value over time
* Businesses are less likely to rely on inflationary profits or excessive debt
* The economy is more stable, with prices reflecting real values rather than artificially inflated ones
Thanks for sharing your insights!
