Bullion, those points you raise are all excellent, and are the things that I looked into right away when I started with bitcoin, as I had all the same thoughts. It took quite some time to get my head round some of bitcoin's critical pieces. The world's economic and monetary history can provide some of the answers.
I couldn't possibly write enough and write it well enough to cover these things off properly and comprehensively, so will just address part of it and see how the conversation develops.
Firstly, finiteness, or scarcity.
Do not conflate this with value. Value is value, regardless of what currency it is denominated in.
The amount of money in the world does not change the amount of value.
The amount of value in the world is always increasing. There are always new products and ideas and inventions coming about, adding to the value already here and being produced every day.
Prices change as they are the connection between the amount of money and the amount of value.
As the amount of value has continued going up, the amount of money in the world has been going up by more lately, a lot more, bringing us the current inflation situation.
If the amount of money does not go up by more than the amount of value goes up, then prices come down.
There will be only 21 million bitcoin, but that doesn't constrain anything at all, and it doesn't limit the amount of value there can be. The beauty of a digital money means you are not limited to cents in the dollar, you can cut it into fractions as small as you like. For example, the smallest unit that is currently well known in bitcoin is the "satoshi", which is one hundred millionth of a bitcoin.
This is simply addressing the scarcity/finiteness element as a supposed issue, I have not started on why this is actually an enormous feature, not a bug, and is arguably the number one reason why bitcoin is superior to any store of value in human history...
If you look at the history of money in the world, you will see that scarcity is the defining quality of the dominant currencies/stores of values.
The US dollar has been the number one currency, predominantly because it was pegged to gold, strictly, in order to maintain its scarcity. Each dollar represented a denomination of gold, which the US held in reserve. The dollar really only exists because it is a way of exchanging gold without having to carry gold around with you, and that's because before bitcoin, gold has been the scarcest store of value.
That tie with gold was threatened, then finally severed, in 1971 with the ditching of the gold standard, and that scarcity element has now been lost.
Prior to all this, the pound was the dominant currency, and was pegged to sterling silver. They ditched that peg during war time because they didn't have enough money to fund the wars. By ditching it or reducing it, and selling bonds (e.g. war bonds), they started mass printing paper money, and therefore devaluing all other money in existence. This is the common pattern. The US dollar is only maintaining its grip as reserve currency through it's new backing that has replaced gold - military force.
Keep going back further in history and all you will see is the same patterns over and over again.
The world's strongest currency was the world's scarcest, what we call the "hardest money". To produce a new piece of money, you had to produce some value - mine some gold, or silver, or whatever metal was most scarce, in your particular time.
And all governments overspend, usually in war time, and look to solutions. The solutions were always to just make more money. You've heard of clipping coins, that's what was done once upon a time. And that's what they are doing now, but in fancier ways with fancier terms, to make it sound different and legitimate. But it's all the same.
Bitcoin cannot be reproduced faster to make more money, no government can clip it and reproduce it, or print more by issuing policies with fancy names.
It is the scarcest money ever created. The effort to mine it is crucial as it shows that work has been done to produce it. Not a button click to just produce it out of thin air. It is the hardest money we've ever seen, and the modern financial world doesn't know what to do with it yet. Most people in those industries are studied up on keynesian economics and how money has worked in their lifetime, but nothing else. It doesn't matter what they think, and how the world has been working recently, the hardness of bitcoin is an unstoppable force, and like all the most dominant currencies before it, it will sweep the world completely, whether leaders and governments and financial institutions like it or not.
The most successful ones in future will be the ones that realise that and embrace it first.
The best parallel is the internet. The old communications world didn't understand it initially, and those that resisted ended up worse off. It was an unstoppable force that historical central communications outfits couldn't stop, and were eventually forced to embrace.
I couldn't possibly write enough and write it well enough to cover these things off properly and comprehensively, so will just address part of it and see how the conversation develops.
Firstly, finiteness, or scarcity.
Do not conflate this with value. Value is value, regardless of what currency it is denominated in.
The amount of money in the world does not change the amount of value.
The amount of value in the world is always increasing. There are always new products and ideas and inventions coming about, adding to the value already here and being produced every day.
Prices change as they are the connection between the amount of money and the amount of value.
As the amount of value has continued going up, the amount of money in the world has been going up by more lately, a lot more, bringing us the current inflation situation.
If the amount of money does not go up by more than the amount of value goes up, then prices come down.
There will be only 21 million bitcoin, but that doesn't constrain anything at all, and it doesn't limit the amount of value there can be. The beauty of a digital money means you are not limited to cents in the dollar, you can cut it into fractions as small as you like. For example, the smallest unit that is currently well known in bitcoin is the "satoshi", which is one hundred millionth of a bitcoin.
This is simply addressing the scarcity/finiteness element as a supposed issue, I have not started on why this is actually an enormous feature, not a bug, and is arguably the number one reason why bitcoin is superior to any store of value in human history...
If you look at the history of money in the world, you will see that scarcity is the defining quality of the dominant currencies/stores of values.
The US dollar has been the number one currency, predominantly because it was pegged to gold, strictly, in order to maintain its scarcity. Each dollar represented a denomination of gold, which the US held in reserve. The dollar really only exists because it is a way of exchanging gold without having to carry gold around with you, and that's because before bitcoin, gold has been the scarcest store of value.
That tie with gold was threatened, then finally severed, in 1971 with the ditching of the gold standard, and that scarcity element has now been lost.
Prior to all this, the pound was the dominant currency, and was pegged to sterling silver. They ditched that peg during war time because they didn't have enough money to fund the wars. By ditching it or reducing it, and selling bonds (e.g. war bonds), they started mass printing paper money, and therefore devaluing all other money in existence. This is the common pattern. The US dollar is only maintaining its grip as reserve currency through it's new backing that has replaced gold - military force.
Keep going back further in history and all you will see is the same patterns over and over again.
The world's strongest currency was the world's scarcest, what we call the "hardest money". To produce a new piece of money, you had to produce some value - mine some gold, or silver, or whatever metal was most scarce, in your particular time.
And all governments overspend, usually in war time, and look to solutions. The solutions were always to just make more money. You've heard of clipping coins, that's what was done once upon a time. And that's what they are doing now, but in fancier ways with fancier terms, to make it sound different and legitimate. But it's all the same.
Bitcoin cannot be reproduced faster to make more money, no government can clip it and reproduce it, or print more by issuing policies with fancy names.
It is the scarcest money ever created. The effort to mine it is crucial as it shows that work has been done to produce it. Not a button click to just produce it out of thin air. It is the hardest money we've ever seen, and the modern financial world doesn't know what to do with it yet. Most people in those industries are studied up on keynesian economics and how money has worked in their lifetime, but nothing else. It doesn't matter what they think, and how the world has been working recently, the hardness of bitcoin is an unstoppable force, and like all the most dominant currencies before it, it will sweep the world completely, whether leaders and governments and financial institutions like it or not.
The most successful ones in future will be the ones that realise that and embrace it first.
The best parallel is the internet. The old communications world didn't understand it initially, and those that resisted ended up worse off. It was an unstoppable force that historical central communications outfits couldn't stop, and were eventually forced to embrace.