What Everyone Should Know About Money

Back in March of last year, I shared some thoughts on the developing digital asset economy and why bitcoin and ethereum were well positioned to become global monetary networks in the years ahead.  With both digital assets surging over the past several months, I've been receiving more questions about bitcoin in particular, and given the undeniable relationship between personal finances and health, I thought I'd share a few more thoughts on this topic today.

Think about the money that you exchange your time for, be it USD, CAD, EUR, AUD, or any other fiat currency.  Did you know that your country's central bank is able to create more whenever it wants to, backed by nothing?  

When the U.S. or Canadian government prints billions of dollars to provide assistance to a struggling economy, all existing savings lose purchasing power.  This makes sense, doesn't it?  If you have $1000 in savings that you've worked many hours to earn, whenever your government prints billions or even trillions of dollars to hand out to everyone, your $1000 becomes less valuable i.e. you can't purchase as much with it.

Put another way, when a central bank prints and hands out money that is backed by nothing, it steals time away from everyone who has exchanged their time to earn and save money.

How is bitcoin different?  

There is a hard cap of 21 million coins, with each coin being divisble up to 8 decimal points - the smallest unit of bitcoin is 0.00000001.

In its earlier years, bitcoin was a highly speculative asset that came with regulatory and governance-related risks.  Today, it has largely been de-risked with institutions like PayPal and Square plugging digital assets like bitcoin and ethereum into their products.  Visa and other credit cards are following suit, and with each passing month, major corporations like Mass Mutual Insurance, Tesla, and Microstrategy are converting significant portions of their cash reserves into bitcoin in order to protect themselves from the inflationary effects of excessive money printing.

In the years ahead, I expect bitcoin to become the most trusted store of value in the world, surpassing gold and other precious metals; it is setting up to become a primary reserve asset for governments and corporations globally.

If you're interested in learning more, please feel free to view the following talk from a conference that was held last week:

Please remember:  when it comes to making investment choices, you must do your own research and you are well served in having a long term outlook; if you aren't prepared to invest in and hold an asset for a few years or more, you likely don't yet have the conviction needed to hold onto that asset through many ups and downs.

For those who are interested in matters of personal finance, please feel free to connect with my Twitter feed where I will continue to share more information on finance and health:

https://twitter.com/Ben_Kim