Most of you are thinking about very small space of time.

Basically, the financial system is in the hands of central banks and governments. And even if private banks have some independence, they are heavily regulated by the state's rules and by the willingness of the state to print more money. To make matters worse, they often make a point of these regulations, as they are benefited by state aid policies, low competition, and fractional reserve policy.

Paper money in circulation currently has fiduciary ballast and forced travel. In simple terms, this means that the state forces all commercial operations in that territory to be carried out in its currency. The fiduciary ballast therefore gives the government incredible power, that of turning ink and paper into something of great value. That way, when the state needs more money, instead of raising taxes that diminishes its popularity, it can resort to two other sources of funding: printing more money or issuing public debt bonds. In the first case, the government hand directly attacks the pocket of the citizen, since inflation results from the increase of the supply of money in the market. When the government plays new paper money to circulate, it automatically devalues ​​the amount that was until then in the market (especially the economic reserves of the people).

In this process, those who suffer most are the poorest, since they do not have sufficient income to invest in real estate, gold, bonds or other currencies with lower inflation. Thus, they become more susceptible to the evil effects of inflation. Not only that, usually the astronomical sums of newly printed coin are handed over to the "king's friends," government-run businesses chosen for favors. Once printed this money no longer has the same value, but the market has not yet realized this change, so the first to receive the "fresh notes" are doubly benefited.


The second (printing of public debt bonds) is much more cruel as it leaves the debt to be paid by future generations. To get an idea of ​​the proportion this has taken in the US, an American citizen born today will already owe $ 53,000.

It is clear that bitcoin operations are still poorly representative when compared to other currencies. It is also not possible to say that bitcoin itself will be the preferred crypto-currency in the future.

For decentralized crypto-coins to overtake definitive fiduciary ballast coins, it will be necessary for more and more stages in the production chain to be financed by this new type of money, until from fertilizer to wheat fields to freshly baked bread Negotiated in this new way.

For those who wonder if bitcoin will work, the most appropriate answer is: it worked.