Jeffrey Wernick is a long-time investor and early Bitcoin advocate. In this clip, he talks about why Bitcoin is the type of money to hold and the US Dollar is the type of money to spend.
A common thought when people first hear about Bitcoin is, “why do we need this magic internet money?“. Most people on the other side explaining Bitcoin can generally understand this thinking process as the idea of Bitcoin is hard to comprehend at first. Any Bitcoin believer will admit that once they started down the rabbit hole that is BTC, it was hard to ignore the genius behind its structure, programming, game theory, security, and decentralization.
One of the best qualities of Bitcoin is its finite supply of 21 million. In addition, every four years Bitcoin is programmed to be deflationary as the reward that is given to miners, who are in charge of securing the network, is cut in half. This means that every four years less Bitcoin is being created and put into the open market. Comparing this system to the US Dollar, which is inflationary, Jeffrey Wernick explains why Bitcoin is considered sound money and the US Dollar is best used for payments.
The Federal Reserve has the ability to print more USD when they see fit. Recently, we witnessed them add trillions more in stimulus to the economy. Every-time they print more money, the value of peoples savings decreases. In simpler terms, Bitcoins supply is decreasing and US Dollars are increasing. There is no doubt that there is strong demand for US Dollars, however with a steady increase in supply the actual value of each one is decreasing. With Bitcoin, as demand increases, the value of any Bitcoiners holdings will exponentially increase since its supply is decreasing. This is what makes Bitcoin sound money and US Dollars “shitty money” or money that is better to spend.
Gold is also considered sound money as there is only a certain amount of gold in the world. Humans have also be using it for thousands of years. However, according to Jeffrey, Bitcoin is a better option for a store of value because its more divisible, cheap to store, governments cannot interfere with it as much as gold, not as easy to confiscate, and more portable than gold.
You can watch his full presentation here.
