Defining a concept as simple and complex as Bitcoin’s halving, forces us to go through several ideas and theoretical premises that will then allow us to weave a structured definition of this interesting event that catches the attention of the crypto ecosystem every 4 years. Let’s start from the beginning.
Bitcoin was conceived under the premise of being good money. Its creator(s) Satoshi Nakamoto was responsible for making sense of a complicated cryptographic puzzle, with pieces scattered over no less than 30 years of input from countless research papers by the founding fathers of the cypherpunk movement.
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But on top of that, Nakamoto had to seek to satisfy the famous triad of money functions that made Bitcoin a medium of exchange (MoE), Unit of Account (UoA) and Reserve of Value (SoV). For the latter function (SoV), it was indispensable to fulfill a characteristic inherent in the concept of money as an economic good, namely scarcity.
The University of Orleans states that money „is an asset, accepted by all, which allows a debt to be paid off easily, quickly However, the same institution also maintains that an economic good must comply with the condition of: „being scarce… (that is) produced in a limited quantity“.
Saifedean Ammoud comments in his book The Bitcoin Pattern that
„Scarcity is the starting point of every economy, and it is not possible to produce unlimited quantities of all inputs; it is necessary to make concessions“
History has shown us that the current and prevailing monetary debt policy of a system that makes NO concessions, has proved to be a perfect trigger for the creation of innumerable local and global economic recessions, as well as chaotic social systems, where economic variables such as inflation push prices to perfectly imitate the effervescence of the foam expelled by a freshly shaken soda bottle.
The words of the master Andreas Antonopoulos in his work „The Internet of Money“, are much more than eloquent in expressing the nature of money today:
„…in a system based on debt, one of the two parties will always be the slave“
Without delving into specific issues of a monetary nature, such as the fractional reserve system, today’s money known as Fiat, derives its term from the first word God mentioned in the Latin version of Genesis: „Fiat lux“ (let there be light), based on the divine ability to create something from nothing and only through the power of the word. In this way, the value safeguard (SoV) functionality of the different state currencies, and especially after the abandonment of the gold standard in August 1971, by the administration of President Richard Nixon triggered an accelerated depreciation in the value of the money of the nations.