For the beginner: why hold bitcoin?

i wrote this article in a private blog in the early part of 2018, only added in the last paragraph to put into context our current Covid19 situation. i feel it will be good to post this article in a public domain so new people who are not sure what the hype is about bitcoin and crypto assets will get a rough idea why we advocate people to keep bitcoin, i have another report about ethereum but that is like 20 pages long so when i get the time i will condense and put it up here. For now let us look at the logic behind owning bitcoin:

Bitcoin is naturally a deflationary asset. Satoshi Nakamoto, the mysterious person who put various available technology together to create bitcoin, intentionally coded it in such a way. He understood the monetary system well. No one knows who he is, not even the people who have worked with him before as they collaborated over the internet. i think moving forward, most of us will be working in this manner as we move forward into the digital arena.

Back to bitcoin. one keeps hearing about inflationary and deflationary asset but no one explains it to you. so here’s my attempt: What is a deflationary asset? This is an asset that value increases with time. As adoption of bitcoin increases, more people will demand of bitcoin but there is only a limited supply of bitcoin ever available.

Nakamoto made bitcoin in such a way that the new bitcoins mined will be halved every 210,000 blocks, that is, roughly, every 4 years. Currently we are in stage 12.5 bitcoins rewarded per block. What this means is that the fastest miners who work to solve the mathematical equation will be rewarded 12.5 bitcoins. Typically, 1 block is created every 10 minutes. This halving will go on until the total coded supply of all 21 million bitcoins are created . There is no way to increase or change the code to make more or less bitcoin. It cannot be done.

What about our money in the bank? This is commonly known as fiat money. Money that we are commanded to accept but is not backed by anything other than the command (legal tender). In other words, when the commander disappears, the money is no longer valid. Who is the commander? Usually in our modern society today, it is our government. So when war breaks out and your current government is displaced, depending on the whim of the new government, your money may become totally worthless overnight. This is why people hoard gold as gold has no geographical boundaries, likewise is bitcoin and all other crypto assets…