Bitcoin’s Big Problem
In May one of the presidential candidates threw his support behind blockchain. Weeks later two of the three presidential candidates, ten United States Senators, and members of the U.S. House of Representatives were at a bitcoin conference!?! The change is absolutely massive. Dan Morehead, Managing Partner Pantera Capital
Yet in spite of these seismic events Bitcoin still has one big problem – and a potentially lucrative solution.
Around 50 million people now own Bitcoin. In March this year there were around 400k daily transactions. 67% of Millennials believe that Bitcoin outranks gold as a safe-haven asset. Awareness of the coin has grown dramatically since it became an election issue with both Trump and Kennedy giving keynote speeches at the recent Nashville Bitcoin conference.
But in spite of Bitcoin entering the mainstream as perhaps the most secure asset to hold in troubled times it has one big problem.
Bitcoin can’t function as money.
So despite Fred Kruger’s claims it cannot replace fiat.
There are two reasons for this.
The first is Bitcoin’s volatility.
Since money was invented in Lydia, modern Turkey, in the 7th century B.C. the most enduring money has been money with a stable value.
Not money that depreciates through over issue like fiat.
Nor money like Bitcoin with wild price swings.
Men, women and businesses function best when they transact with a stable measure of value.
No household doing the family shopping wants to wonder why the price of bread has doubled since last week. Is it the bread or has the currency lost value?
Currency hedging and holding currency reserves are complex and costly necessities for businesses simply because they cannot rely on money having a stable value. During the classic Gold Standard era of the 19th Century such costs were unheard of. All major currencies were pegged to gold at an official rate so there was no fluctuation between them.
Gold, and currencies pegged to gold are the best money not because of the value of the metal. They work because gold has for thousands of years proven to be the best source of STABLE value. So any money pegged to gold participates in that stability. Bitcoin has none of this.
The second reason why Bitcoin cannot function as money is ironically because of Bitcoin’s own success as a trusted store of value.
As more people catch on to the woes of the fiat system Bitcoin’s price increases. As more people believe it is a safe-haven asset its price increases. As more people have access to Bitcoin through traditional financial products like ETFs again its price increases.
In other words, to paraphrase Michael Saylor, once you have discovered the near-perfect asset why would you ever sell i? Indeed given Bitcoin’s value has increased a million-fold since the famous pizza incident in 2010 it would be financial suicide to use Bitcoin for the family shopping. If you did you would be spending the best performing asset you have ever owned.
So this is Bitcoin’s big problem. Because of its volatility and its own success as the world’s most successful asset it can never become money.
Once the problem is understood the solution becomes obvious: use Bitcoin as collateral for a gold-pegged coin.
You never sell your Bitcoin. Instead you use it to borrow gold-pegged money.
The blueprint for this coin already exists.
It is called Goosie.
It works like this.
Place your Bitcoin into the Goosie smart contract.
The smart contract immediately issues you 51% of the value of your Bitcoin.
50% is gold-pegged money to spend. 1% goes to maintain the Goosie system.
Unlock your Bitcoin at any time by repaying the original value of your Goosie loan.
When Bitcoin goes up take out a bigger Goosie loan based on Bitcoin’s new value.
With Goosie there is no interest to pay on the loan and your Bitcoin is not a risk of a margin call. You stay in control of your Bitcoin at all times and like Bitcoin itself, Goosie is private with no LLC or foundation behind it.
A competition is underway to build the first Iteration of the coin. The person who wins gains access to the $103 trillion fiat market. As the winner receives 0.5% of all Goosie minted in perpetuity the initial revenue potential is $212 billion for a likely outlay of $3-5 million.
The competition means Bitcoin’s big problem can become somebody’s golden egg.
If this sounds like you why not download the open source build rules, and do well by fulfilling Satoshi Nakamoto’s vision of private money that works?
Bitcoin stands for freedom, sovereignty and independence from government coercion and control. Donald Trump at the Nashville Bitcoin Conference July 27th 2024.
Make it so.