Key facts:
For Saifedean Ammous, bitcoin is the strongest money that has ever existed.
Ammous believes that a company can invest all of its surplus in bitcoin.
Institutional adoption of bitcoin (BTC) as an asset has escalated to unsuspected levels since last year, with companies (and countries like El Salvador) stacking BTC. But what is the appeal of cryptocurrency for this to be happening? Saifedean Ammous, author of the book The Bitcoin Standard has his answer.
During the “Bitcoin for corporations” panel of the European Blockchain Convention, Ammous assured that there are at least two main attractions for companies to include BTC in their accounting books: It is the “hardest money in history” and the “fastest” too, in his opinion.
For the economist, what makes bitcoin superior to any money known to date is the controlled growth of its supply and the difficulty of simply creating more coins. “Bitcoin is protected against inflation, without depending on a trusted third party,” he said about it.
Ammous explained that the rate of increase in the supply of bitcoin is slower than that of any other known money thus far, what makes it the least inflationary in the world.
Anything can be used as money, but if money is easy to make, people will make more money. When something becomes easy to do, it is no longer money, it loses its value.
Saifedean Ammous, author of The Bitcoin Standard.
The other element that the educator also considered important for institutions to use bitcoin is its speed as a settlement asset across borders. His argument is that, to move large amounts of money from one country to another, the options always include trusted third parties, such as banks, governments or financial institutions. And that takes longer than the roughly 10 minutes per confirmation that the Bitcoin network takes.
In addition, the fact that every 10 minutes a block is added to the Bitcoin accounting makes it a very secure tool against fraudulent transactions and prevents the reversal of transactions. A layer of security is added every 10 minutes, he said.
Saifedean Ammous, author of The Bitcoin Pattern, spoke about institutions’ interest in BTC. Source: screenshot.
How much money can companies allocate to bitcoin?
Asked about how strong a company can bet on cryptocurrency, the writer assured: “If your income does not grow faster than the rate of money printing, you are losing capital and wealth as an institution. So it makes sense to have the hardest money in history on your balance sheets. “
For him, it is reasonable to guarantee the company’s expenses for a range of about 24 to 36 months (if you want to be “extremely conservative”) and invest the surplus in bitcoin.
The time range he argued is connected to the fact that protection against inflation has guaranteed the sustained increase of the value of BTC in the market, according to Ammous.
In this regard, he considered the fact that cryptocurrency has never generated losses in a range of four years, so it seems a safe investment bet so that companies do not lose capital with fiat money, which is continually subject to inflation. .
