Introduction to Bitcoin and Its Purpose
The concept of Bitcoin was first introduced by Satoshi Nakamoto in a white paper, where it was described as a "peer-to-peer electronic cash system." However, over time, the perception of Bitcoin’s purpose has evolved, with some proponents viewing it as more than just a form of electronic cash. One such proponent is Michael Saylor, the strategy executive chairman, who has been buying Bitcoin aggressively for nearly five years.
A Different Perspective on Bitcoin
Saylor’s views on Bitcoin are quite different from those of other proponents. According to economist Saifedean Ammous, Saylor does not see Bitcoin as money in the classical sense, but rather as an asset. Ammous believes that Saylor views Bitcoin as a hard asset, similar to crude oil, which can be refined into different forms of financial assets. This perspective is reflected in Saylor’s company, MicroStrategy, which has been accumulating Bitcoin and using various corporate finance mechanisms to allow investors to gain exposure to it.
Bitcoin as a Hard Asset
Saylor’s approach to Bitcoin is centered around the idea of refining it into different forms of financial assets. He has used existing corporate finance mechanisms, such as issuing convertible senior notes and perpetual preferred stock, to raise billions of dollars to buy more Bitcoin. As of December 15, MicroStrategy had accumulated 671,268 Bitcoin. Saylor’s goal is to create a system that allows people to access Bitcoin in different forms, much like Standard Oil refined crude oil into standard forms of consumer oil.
The Monetary Properties of Bitcoin
While Saylor’s approach to Bitcoin may be innovative, it does not alter the monetary properties of Bitcoin itself. According to Ammous, Bitcoin is still a form of money, and its value lies in its ability to be used as a store of value and a medium of exchange. Ammous believes that people will ultimately hold Bitcoin as a form of pristine capital, which will allow them to access affordable debt. As the global monetary supply continues to increase, the use of debt will become more prevalent, and Bitcoin will become an increasingly important part of the financial system.
The Future of Bitcoin
The widespread adoption of Bitcoin across retail stores and the unique circular economies in South Africa has led to increased interest in the cryptocurrency. Economist Saifedean Ammous has been advising the Africa Bitcoin Corporation (ABC) on its efforts to promote the adoption of Bitcoin. According to Ammous, the key to Bitcoin’s success lies in its ability to be used as a form of money, rather than just an asset. As more people buy and hold Bitcoin, its value will continue to increase, and it will become an increasingly important part of the financial system.
Conclusion
In conclusion, the perception of Bitcoin’s purpose has evolved over time, with some proponents viewing it as more than just a form of electronic cash. Michael Saylor’s approach to Bitcoin, which views it as a hard asset that can be refined into different forms of financial assets, is an innovative take on the cryptocurrency. However, according to economist Saifedean Ammous, Bitcoin’s monetary properties remain unchanged, and its value lies in its ability to be used as a store of value and a medium of exchange. As the global monetary supply continues to increase, Bitcoin will become an increasingly important part of the financial system, and its widespread adoption will continue to grow.
