A New Look at Bitcoin

For many years, I had a pretty fixed opinion about Bitcoin: to me, it seemed like a fancy idea designed mostly to pull money out of people’s pockets. A digital “something” without real-world value – and, as such, not something that would ever hold lasting worth.

But I’ve never been so convinced of my own views that I’d refuse to take a second look. Partly out of curiosity, and partly driven by a gut feeling that there might be more to it than I had initially seen, I started digging.

Now, I’ll spare you the technical rundown – the mysterious creator known as Satoshi Nakamoto, the blockchain technology, the decentralized architecture, and the fact that no single entity controls it. Those aspects have been discussed endlessly. If you’re interested, just google them – you’ll find more information than you’ll ever need.

What caught my attention was something else entirely: the ideas behind Bitcoin. The why, not just the how. And as I explored that landscape, I came across a range of arguments and perspectives. Some I quickly dismissed – too speculative, too doomsday-driven, too far out. But others made me pause.

This post is about those ideas. I won’t tell you what to think – instead, I’ll share what I found compelling and let you decide what it means for you.

The First Idea: Value

The first idea that made me reconsider was about value – and my original assumption that something existing purely in the digital world couldn’t possibly have any. You can’t grab it. You can’t put it in your pocket. You can’t hand it to someone physically. It’s just ones and zeroes in a virtual universe.

But then again – why not?

At the end of the day, we decide what holds value. Value is a social construct – a shared agreement that something is worth something else in exchange. And that “something” doesn’t have to be physical at all.

A great early example is seashells. Across many parts of the world, and independently from one another, people used shells as currency. It worked because shell money satisfied a few key requirements:

• Scarcity: Not just any shell would do. Typically, rare or hard-to-produce shells were used – ones that couldn’t simply be picked up at the beach, making the currency difficult to counterfeit or inflate.

• Portability: Currency has to be easy to carry and exchange. If you can’t transport it, you can’t trade with it – simple as that.

• Mutual acceptance: This is the most fragile and most essential requirement. For a currency to work, everyone in the system needs to agree on its value. If you and I agree that something has value, we can trade. But if the next person doesn’t accept it, the system breaks down.

And underlying that mutual acceptance is trust. We’ll only accept a currency if we trust that it will retain its value over time. That means it must be hard to fake, limited in supply, and relatively stable. If any of those qualities fail, trust evaporates – and so does value.

The Second Idea: Control

The second idea that caught my attention was about control.

Any one of our traditional currencies — now and throughout history — has always been under the control of someone. A government. A central authority. A ruler.

Let’s take a look back at ancient Rome.

The Roman Empire used the Denarius (a silver coin) and the Aureus (a gold coin). The Aureus first appeared in the 3rd century BCE, but regular minting began under Julius Caesar around 49 BCE. At that time, it contained about 8 grams of pure gold. Under Augustus (~14 AD), it was slightly reduced to 7.8 grams. By the time of Trajan (~117 AD), it had dropped to 7.22 grams — a slow, steady decline. Even under Septimius Severus (~211 AD), it still held around 7.19 grams.

But then things changed.

Facing political instability, military overreach, and economic crisis, the Roman Empire started aggressively debasing its currency. Under Emperor Valerian (~260 AD), the gold content of the once-stable Aureus had fallen to just 3.4 grams — less than half of what it had been just 50 years earlier.

The Denarius followed a similar path. When introduced in 211 BCE, it was nearly 4.5 grams of high-purity silver. For nearly two centuries, it remained relatively stable. Around 44 BCE — during Julius Caesar’s time — 1 Aureus equaled 25 Denarii.

But over time, the Denarius, too, was debased beyond recognition. By 241 AD, it contained only 48% silver, and by the mid-3rd century, it had become virtually worthless. At that point, 1 Aureus was worth more than 1,000 Denarii — not because the Aureus gained value, but because the Denarius had lost nearly all of it.

Eventually, trust in the Aureus eroded as well. The response? A currency reset. The old gold coin was abandoned and replaced by the Solidus, introduced by Constantine the Great around 312 AD. The Solidus contained approximately 4.45 grams of gold — and was worth a staggering 275,000 Denarii. That number says it all.

The Solidus marked a complete reboot of the Roman monetary system. The emperors had overspent for decades — on wars, subsidies, pensions, and public “support payments” of all kinds. The result was hyperinflation, and the only way out was a hard stop. A new currency. A new start.

Needless to say, very few managed to preserve their wealth during the transition. The state had full control over the currency — and when it collapsed, so did the value stored in it.

The Third Idea: Independence

It’s not really a standalone idea — rather, “independence” is the logical result of what happens when “trust” is broken due to “control”, the two topics we explored earlier.

The story of the Aureus showed us how the Roman Empire “adjusted” its monetary system to finance its ever-growing ambitions. But this wasn’t a unique case. Its successor, the Solidus, introduced in 312 AD, began as a 4.5-gram coin of nearly pure gold. For centuries, it remained stable in both weight and purity, earning the trust of people across the late Roman and later Byzantine world. It was hard money, and it worked — for 700 years.

But even the Solidus eventually fell. In the 11th century, economic crises, mounting military expenses, and growing trade deficits led to a reduction of gold content — first to ~85%, then lower. Trust eroded. The once-reliable coin was finished. In 1092 AD, it was replaced by the Hyperpyron.

The Hyperpyron kept the original weight of 4.45 grams and started strong, with a gold content of 90–95%. For a time, it succeeded — becoming the new standard. But history repeated itself: by ~1200 AD, its purity fell to 80–85%. By 1350, it dropped to 50–60%. Once again, trust gave way to manipulation.

All throughout history, currencies have followed the same tragic pattern:

• They start strong — stable, trusted, and valuable.
• They serve well — until the issuing authority, often the state, begins to manipulate them for short-term political gain.
• Overstretching, inflation, loss of backing, and abuse of control lead to collapse.
• And in nearly every case, this process plays out in the name of “necessity” — financing wars, buying loyalty, or avoiding hard fiscal choices.

Every single one of them.

This was what caught my attention – listening to some audiobooks while driving from Hamburg down to Frankfurt twice. And because I was intrigued by the insight, I verified it myself – and found it to be accurate.

Conclusion:

Now, with all that in mind, I took a closer look at the present situation — the United States with the US Dollar, China with the Yuan, and Europe with the Euro.

• At the end of 2024, the United States had accumulated a staggering 35.5 trillion US dollars in national debt — about 124% of GDP and roughly 106,000 dollars per capita. The country faces excessive military spending and a persistent trade deficit.
• China, at the same time, reported an official national debt of around 4.23 trillion US dollars, equivalent to just 25–26% of GDP. However, this number does not include the massive local government debts and state-owned enterprise obligations. When those are factored in, China’s true debt load is estimated to be as high as 120–125% of GDP.
• Europe presents a more complex picture, since we’re not looking at a single country but rather a union of sovereign states. By the end of 2024, the combined national debt of the EU countries had reached approximately 15.8 trillion US dollars — around 81% of GDP. Germany alone accounted for 2.69 trillion euros, or about 62.5% of its own GDP.

So while the absolute numbers differ — and depend heavily on how and what you measure — one thing unites all three major economic areas:

Massive debt burdens, the ongoing need to refinance them, and full state control over the respective monetary systems.

Only a wicked mind would draw any parallels to previously discussed topics… which brings us back to: Bitcoin. But before we go down that rabbit hole, we need to take a look at various states & currencies over the centuries, then a detailed one one the 20^th century… in my next posts.