Who F*g Cares About Bitcoin's Price? The Important Things are Sats!??
Aron Clementi
Co-Founder & CEO Elysium Lab | Digital Assets | ???? & ??2?? | Innovation | Venture Building
Who cares about the price? What is the price of ?? First, one Bitcoin is nothing more than a “name” representing 100 million satoshis. For simplicity, we think in terms of Bitcoin today because the FIAT value of a single satoshi is too low. But why is it so low? Bitcoin’s market capitalization is relatively tiny compared to the fiat market, which is around $90 trillion (source: Visual Capitalist, 2024). ??
Today, we live in a world dominated by fiat exchanges, and Bitcoin is seen as a way to transform this Fiat into a superior monetary asset while still being backed by a fiat mindset. As the super-inflated fiat system continues to pump liquidity into Bitcoin’s market capitalization, it makes sense to consider the Fiat locked-in Bitcoin that will no longer be exchanged for Fiat. This is because the economy might start thinking in sats, not in dollar-backed prices. ??
Mechanism of the Dollar and Bitcoin
In the current economy, we have the dollar supply, i.e., how many dollars are in circulation, and the market cap, which is the sum of the value of all single dollars in circulation. According to the Federal Reserve, as of January 2024, the M2 money supply (which includes cash, checking deposits, and short-term deposits) was about $21 trillion, while the total U.S. debt exceeds $36 trillion (source: U.S. Debt Clock, 2024). This value is now arbitrary, without a gold reserve (Before 1971 with Gold Standard, the U.S. Dollar was backed by Gold). Similarly, a satoshi represents a single unit, and the sum of all satoshis (100 million x 21 million) represents the total capitalization of Bitcoin. Currently, Bitcoin’s market capitalization is about $550 billion (source: CoinMarketCap, July 2024) but only in Fiat Mindest. In the future, as a superior asset, the dollar value will be 0.000001 Bitcoin. ??
If you have $10 today, you own only 0.0000000476% of the dollar supply, and this is the value attributed to you without any actual proof beyond social value. The same applies to Bitcoin: owning 10,000 sats means you have 0.000000476% of the total Bitcoin supply, representing your purchasing power. ??
Economic Implications
In a future economy, Bitcoin’s market capitalization will grow, and its liquidity will be less influenced by fiat values. This will change our perception of value and purchasing power with more stability. Users will start thinking about sats, not dollars or other fiat currencies. ??
Difference Between Dollar and Bitcoin
The fundamental difference between the dollar and Bitcoin lies in their issuance. The dollar, backed by nothing tangible, can be printed infinitely by the Federal Reserve, leading to continuous inflation. In contrast, Bitcoin is based on a Proof of Work system that requires energy to be mined, with a supply limit of 21 million Bitcoins. This makes it a deflationary asset and a much more stable store of value; it is actually a digital Gold Standard backed by power and computations (energy consumption and generations + HW hash power needed) instead of actual gold mining (gold scarcity and physical extraction/transportation difficulties). ??
Economic Reflections
Austrian economics emphasizes the importance of intrinsic value and limiting the money supply. Bitcoin embodies these principles with its limited supply and Proof of Work issuance model. This sharply contrasts with the fiat system, where expansive monetary policies can dilute currency value. ??
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In the long run, Bitcoin could represent a superior store of value and a more stable monetary base than fiat currencies. For those who believe in Austrian economics principles, stacking sats is a sensible strategy to preserve value and protect against inflation. ??
Reader Question
If a byte equals 8 bits and represents the amount of storable data that increases over time, can one Bitcoin, which stands for 100 million satoshis, represent the energy and computation required for mining, incremental over time? ??
Conclusion
In summary, real value doesn’t lie in Bitcoin’s price expressed in dollars but in the number of satoshis you own. In this way, Bitcoin establishes itself as a valuable asset and a new economic unit of measure. I invite everyone to consider the importance of stacking sats for the future.
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” — Satoshi Nakamoto
Sources:
( my medium https://medium.com/@clementi.aron/who-f-g-cares-about-bitcoins-price-the-important-things-are-sats-2311e4b14d22)
#Bitcoin #Satoshi #Cryptocurrency #Economics #Fintech #Blockchain #Innovation #AustrianEconomics #StackSats