Comparisons between the market capitalization of Bitcoin and that of publicly traded companies made me wince in frustration. Trying to pit the world’s first successful native digital currency against a single industry is narrow-minded, let alone a single company. However, as I continually indulge in the process of meeting people where they are in their Bitcoin journey, I realized that I could use this comparison to illustrate the strengths of Bitcoin in a different way.
Rather than trying to conceptually bring Bitcoin down to the level of global currencies, I suggest conceptually bringing global currencies down to the level of publicly traded companies. This temporarily eliminates the need to delve into the history of monetary theory to try to explain Bitcoin.
A note to investors:
To achieve this, imagine that USD and BTC are tickers on a stock market. Each is a company with employees, management policies, a history of price performance, legal obligations and publicly traded shares. Now that we are operating on the same conceptual level, let’s look at the status of these two companies.
The USD board has a long history of diluting its shares and, more recently, has been issuing new shares at a very alarming rate. Much of the dilution benefits the board while employees work hard for reduced salaries. In contrast, BTC does not have a board of directors. It is managed by employees and employees maintain a collective agreement whereby shares will be issued at a fixed, predictable and declining rate with a maximum offering of 21 million. In order to work in the company, you must adopt the stable issue policy.
The USD company is clearly strong arming competition around the world and forcing people to conform to their standards. They have been the leaders for decades and have gobbled up most of the global market share. As a result, they hold enormous leverage over their competitors, but they have become complacent and are losing their advantage. The expenses associated with maintaining overheads are becoming heavier day by day and the level of debt far exceeds responsible levels. Price performance for investors holding USD stocks has been in the red by about 90% since 1971 and shows no signs of a serious rebound.
The BTC company runs a popular marketing campaign that is gradually gaining traction, but it has yet to go fully viral online. BTC is a disruptive technology company with fourteen years of volatile but consistent growth in value and adoption. Their share of the global market is extremely low compared to that of the incumbent operator; creating spectacular upside potential. The management structure is simplified and overhead costs are shared by employees while the organization itself has no debt. Price performance for investors holding BTC stocks has been in the green by around 200,000% since 2013 and shows no signs of slowing down.
Rational investors can bet on both horses, but they weigh their allocation based on current events. Market conditions are changing rapidly as a new startup called BRICS makes pre-launch announcements. The BRICS seem to want to steal market share from the dollar. This will have a profound effect on USD, as its business model relies on it being the sole provider of its service.
BTC investors tend to hold stocks tightly. Around 70% of shares have not changed hands over the past two years despite enormous volatility. Some large BTC shareholders may be enticed to sell their shares for one reason or another, but many smaller investors eagerly scoop up these discounted shares at every opportunity. Due to the entrenched nature of the U.S. dollar, it has some cards in its hand to attract new investors and slow the growth of its competitors, but its days of true market innovation are over.
On the other hand, BTC is innovating at a constant pace and is poised to continue taking market share regardless of the competition. Their product has fundamental qualities that the competition I won’t be able to match. Ultimately, among the three companies, BTC is the only one that is digitally native. USD uses a hybrid physical/online system, but is not optimized for a strictly online model. The BRICS do not yet have a working prototype, but their digital presence is inevitable. Legacy customers will make more sober comparisons between available options once they understand that all of global commerce will migrate to a digital format.
A note to employees:
Simply put, anyone who adds value to the network could be considered a BTC employee. According to this definition, every investor is also an employee. Just like miners, developers, manufacturers, and entrepreneurs who get involved with Bitcoin software or hardware. Vendors accepting bitcoin for goods or services also add value to the network proportional to the value of those goods and services. Investors who buy Bitcoin compete with each other, while enriching each other. Investor holdings add value to the network by reducing circulating supply.
The resulting condition is one in which each network participant works for every other network participant. Rewards are distributed relative to investors’ holdings. BTC is employee owned and operated. Examine the circular economy of Bitcoin from this angle; Every Bitcoin user is an investor, employee, and business owner all at the same time. Each user chooses their own level of involvement and all roles are accepted or declined on a voluntary basis.
Cohesive teams outperform teams that struggle to reach consensus. Fortunately, the Bitcoin community was built around a mathematical consensus machine. Despite ongoing disagreements within the community, we are ultimately forced to reach a collective agreement every ten minutes. Each of us has taken unique paths to understanding the importance of bitcoin and we all support the network in specialized ways. Even those trying to attack bitcoin are providing their own form of value. We can thank them for helping educate us and pointing out potential vulnerabilities in the protocol.
The Latin root of the word “to compete” is compete “to strive in common, to strive to achieve something in company or together”. By being competitive, we can all become stronger together. To ignore the collective nature of Bitcoin would be to ignore reality. Millions of individuals currently act as a decentralized collective to manage the Bitcoin network based exclusively on the protocol’s incentives. Without them, I would have nothing to write.
Groups do not exist without individuals and individuals do not exist without groups. If we choose, we can strive to live with compassion toward other living beings. However, this is far from a prerequisite for employment in the Bitcoin network. Forcing anyone to behave ethically or compassionately completely negates the value of these virtues. In this new paradigm, there are no obligations, only offers.
We all make choices about how we deploy our capital and allocate our personal energy. Trusting the bankrupt fiduciary giant rather than meeting the new market challenger is a much bigger risk than most realize. Fortunately, Bitcoin will never experience layoffs or hiring freezes.
Viewing Bitcoin in this light puts aside ideological and moral arguments in favor of taking a sober look at the network compared to its competitors. This approach may simplify the conversation or drown out a call to action, but not everyone is ready to confront the atrocities of the fiat system. Some people invest above all rationally; work to maximize profit above all else. Some invest more with their hearts; avoid investments that do not correspond to them morally. Unfortunately, in the fiat system it is not possible to do both. Invest wisely.
This is a guest post from Source node. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.