The reason bitcoin is worth 600x the world reserve currency is because it has properties that satisfied a powerful economic need. These properties together we call trustless:
- permissionless (you don’t need a bank or govt to approve your transaction)
- private (if you take the right precautions)
- predictable supply (secure from govt inflation)
- provable cryptographic security (ownership and transactions are mathematically verifiable)
Other properties such as fungibility are essential for a currency but not novel to bitcoin and we won’t cover them here.
The main benefit of a trustless currency is reduction of uncertainty and therefore increase the value of what you can do with it. It’s the same reason that currencies of stable democracies with healthy economies have a lot more value than unstable dictatorships embroiled in war.
Certainty increases risk tolerance because humans naturally will prefer to deal with systems where the risk is narrowly focused than one where many things are at risk.
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