A Letter to Investors: The Case for Bitcoin

In this article I give an ‘entry level’ overview to people already familiar with investing, as to why I believe Bitcoin is worthy of your attention. I touch superficially on many topics to provide a starting point for your own research and debunk some common misconceptions. Many of you will have heard of Bitcoin already and I ask you to approach with an open mind… 

Why was Bitcoin created? 

Bitcoin’s very first block in 2009 incorporated a message at the heart of Bitcoin’s purpose.

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."

The creator of Bitcoin laid bare their opposition to bank bailouts, the moral hazard involved and set a path towards a new sound money standard. Later in 2011, the creator, who went by the pseudonym of Satoshi Nakamoto, stepped away from Bitcoin leaving it as an entirely open source form of money under no-one’s direct control. 

11 years later Bitcoin has grown from a handful of extremely early adopters to an estimated 50 million users, a daily average transaction volume equal to $1 billion USD and the hash rate of the network (a measure of network security) sits near all-time highs. The current price is c. $7,000 USD per Bitcoin with a market capitalisation of c. $133bn. 

Who values Bitcoin and why should it be worth anything? 

The reason Bitcoin is valuable is because it is money, the best money to have ever existed in fact. Increasing numbers of people are recognising this by asking a question most have never asked – what is money? 

Various monies have been used throughout human history as a store and exchange of value across time, space and scale. Money solves problems such as how do economic actors exchange the fruits of their labour, when

  • neither is producing a good that the other wants,
  • neither want to transact at this very moment,
  • or indeed in the quantity offered.

Seashells, cattle, wooden sticks, Rai stones, glass beads, gold and paper have all been used as money in different cultures and during different periods of history. The requisite attributes of ‘good’ money are well understood.

Below shows a comparison across Bitcoin, Gold and Fiat (government issued currency) against these attributes: 


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