One of the main reasons why people give value to Bitcoin is because is hard money i.e. it is hard to add quantity to its supply. There is an inborn instinct for humans to want scarce things. The people who value Bitcoin scarcity are using Bitcoin as Store of Value therefore they are saving.
Furthermore, Bitcoin is also hard to confiscate. There are few unique among assets in this regards. In fact, there really aren’t that many options that are provably scarce and are resistant to confiscation. For example, real estates, despite storing their value pretty well, are easily confiscatable. Bitcoin is really the only asset that has both proven scarcity and confiscation resistance.
That’s not to say the scarcity and store of value uses are the only reason that people want Bitcoin. There are people that want Bitcoin so they want to transfer money to their relatives abroad. However, we consider the hardness of Bitcoin characterizing a big portion of market valuation.
History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours
The hardness of Bitcoin has been recently proven in the local Maltese banking market. Satabank plc has seen his operation being stopped by local authority MFSA. Here it is possible to find the public notice from MFSA about the bank. This has forced the bank to close the operational flow by not allowing its customer to withdraw funds.
Imagine for a moment the circumstance where you or your business have to pay bills expiring in less than 5 days, rentals, wages or other ordinary expenses, and there is no chances to get access to your Satabank account, since the institute which you have trusted to store your money has frozenyou’re your accounts.
Do you feel the hardness of Bitcoin? The above quotation from Saifedean Ammous is referring exactly to this example. Whenever someone holds harder money than yours, you would feel higher risk of losing the value of your savings and assets. The Bitcoin Standard refers to other examples in history where hard money has prevailed on other form of money, as for example the cowry shells which lost their value as consequence of lower scarcity.
Bitcoin is thus best understood as the first successfully implemented form of digital cash and digital hard money. With an automated and perfectly predictable monetary policy, and the ability to perform final settlement of large sums across the world in a matter of minutes, ad our ATM allows you to buy a portion of this 21 Million rare piece of future.