In a recent online discussion with David Andolfato, Pompliano pointed out the key difference between the limited supply of Bitcoin and the seemingly unlimited issuance of fiat currencies.
This difference is at the heart of the wider concerns about inflation and monetary policy, as fiat money is often criticized for losing value over time because there is too much of it. Andolfato, a well-known economist, in his turn has drawn comparisons between Bitcoin and fiat, arguing that Bitcoin was also created from nothing.
But what sets Bitcoin apart is that it has a limited and decentralized supply, which was a deliberate choice by its pseudonymous creator, Satoshi Nakamoto. The goal was to create a peer-to-peer digital currency with a limited supply of 21 million coins, set by the algorithm. This scarcity is what makes Bitcoin a digital answer to gold and earns it the “digital gold” title where the supply can’t be manipulated by any central authority.
As Bitcoin has become more mainstream, more and more institutions and individual investors get on board, and the focus has shifted from how it was created to how it’s performing and whether it can help to protect against inflation.
This year, Bitcoin has seen some pretty impressive growth, reaching almost $100,000 per coin. With a price surge of over 136% since the beginning of the year, BTC has outperformed traditional safe-haven assets like gold, which itself saw a significant rise of 27.6% in the same period.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
