The greatest risk in life is not taking any. Buy Bitcoin
There is a meme in the cryptocurrency community which I see pop up every couple of weeks which goes like this: “The greatest risk in life is not taking any. Buy Bitcoin.” But is not buying Bitcoin actually a risk?
I’m going to answer this question by going back to a point in time when the world used two main currencies: gold and silver.
First, lets understand why we used gold and silver alongside each other, instead of just gold or vice-versa.
A good medium of exchange solves the lack of coincidence of wants problem, which can be broken down into three sub-problems.
1. Lack of coincidence of scales: I make shoes worth $60 and I want to buy a gum-ball for $0.25. I don’t have a way to give the gum-ball seller $0.25 worth of one of my shoes, so I have to either trade a pair of shoes for 240 gum-balls or live without the gum-ball.
2. Lack of coincidence of time: I’m a fisherman trying to buy a car. It is impossible for me to save up enough fish to buy a car before the fish rot.
3. Lack of coincidence of location: I’m a farmer looking to buy a house in a new city. I have enough cattle to pay for the house, but the city is very far away, so it would be impossible to move my cattle there to pay for the house.
Gold solves the lack of coincidence of time and lack of coincidence of location problems, as its chemical properties make it resistant to deteriorating and its high price per ounce makes it easy to transport large amounts of value. Gold’s high price make it great for expensive transactions like buying a house, but for inexpensive transactions, it is unable to solve the lack of coincidence of scales. It is nearly impossible to get a piece of gold small enough to pay for a $0.25 gum-ball.
This is where silver comes in. When it was being used alongside gold as a medium of exchange, its price was always ~15.5 ounces of silver per ounce of gold, so it could easily be used to purchase inexpensive items. It also solved the lack of coincidence of time and lack of co...
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