Bitcoin's Value Proposition

Have you ever wondered:

• Why do we work 40 years just to retire broke at 65?

• Why are we locked into 9 to 5 jobs 5 days a week?

• Why is generational wealth so rare?

The answer isn’t self-discipline. It’s the system and the system is rigged.
Enter: Bitcoin.

Bitcoin is not just a currency. It’s a weapon against systemic rot.
A rebellion encoded in math.
It’s how you opt out of wage slavery, financial censorship and silent theft via inflation.

I just saw Bitcoin’s price and for a brief second - I thought. For all that I talk about Bitcoin - I don’t think I’ve ever covered it’s core value proposition.

The increase in the price of Bitcoin is screaming that there is something that some people are seeing that others are not seeing. What is it then that makes Bitcoin attractive to those who know?

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Disclaimer - This content is for informational purposes only and does not constitute financial advice. Please do your own research or consult a professional before making financial decisions.

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Rules Based System

Let’s start with the foundation, the philosophical architecture of Bitcoin.

Power corrupts. In 2025 we live under a two-tier system. The rule-makers and rule-takers. Those with power have their decisions swayed through financial incentives. Corruption is sanitized through book deals, advisory roles and board seats. All yielding millions for those obedient to the regime.

Bitcoin had “an immaculate conception”. There is no CEO to be manipulated. There is no Board of Directors to be influenced. The main remanence of initial control was a mysterious, shadowy figure with a suspicious name that soon disappeared after the creation of his masterpiece.

Satoshi Nakamoto.

(The name - totally reminds me of Keyser Soze from The Usual Suspects if you remember that film)

He created the protocol, kick started the network then disappeared from existence.

What was left was set of rules and operators to make the network run. From a rules perspective - positive actions are rewarded and negative actions are punished - leaving for a self-healing autonomous system.

Bitcoin starts it’s life with a purpose built system that has a side effect of actively working against the corruptibility of humans.

Peer to Peer, Permissionless Cash Alternative

Satoshi created an impressive ecosystem that aimed to create an alternative to the current system for payments. Taking into account his original whitepaper plus the first released code, Bitcoin offered the following:

• Permissionless Transactions - In our current banking system a bank can refuse to send or receive money for a certain party. If the government or banking system deems that they don’t like a party - then you are straight out of luck. Banks freeze accounts. Governments seize assets. In a fiat world, you are one wrong opinion away from financial exile. Anyone remember the Canadian Truckers bank accounts being frozen?

• Decentralized System - Most software systems are designed to have the best of all worlds allowing maximum flexibility, throughput and integrity. However doing so typically has the side effect of becoming a Centralized System. A centralized system comes with the risk of being a single point of failure or the owner/operators whimsically changing rules or being coerced. Bitcoin was the first to successfully implement a decentralized cashless alternative that could scale.

• Irreversibility - In the current banking payment systems, one can order something from a website, wait for it to arrive, then inform the Credit Card company that the product didn’t arrive in order to get a refund. This is non-deterministic and isn’t a strong enough foundation to build an economic transaction system on. The way that people typically get around reversibility in modern systems is to use a third party intermediary - “Escrow”. The problem with this system is that it is predicated on trust. The Escrow company also turns into a point of failure.

• Privacy

• Fixed Monetary Supply - If you are a reader here you will know that I talk about money printing as being a deliberate and direct theft against your wealth. Having currency units being magicked out of thin air robs from everyone who saves in that currency. Bitcoin solves this with having a fixed number of units that can be produced. Every ~4 years the number of Bitcoins being “mined” gets cut in half. The new supply of Bitcoin slowly diminishes to zero.

Trilemmas and Shitcoins

A pattern you will notice in the real world is that of Trilemmas.

These are scenario where you have 3 options, but if you pick all 3, you will be jack of all trades, master of none - so you are forced to choose 2 of the 3.

A concrete example that I can draw upon is that of the “Iron Triangle”. In Software Development - a team must pick from one of Scope, Cost, Time. If they pick all 3 the project will fail.

Bitcoin faced a Trilemma upon its creation. Whether to chose Decentralization, Security, Scalability. Scalability was sacrificed to ensure a solid foundation. See reference. Scalability in the context of Bitcoin is really about throughput or transactions per second.

Now we’ve heard the words “Crypto Currencies” and you are probably aware of the tens of thousands of Cryptocurrencies that are out there.

Effectively copycats wanted to make variants on Bitcoin for their own value proposition. So the whole Cryptocurrency world is made up of variants on the original Trilemma. These copycats have been dubbed “Shitcoins” by Bitcoin Maximalists (also known as “Shipcoins” as not to be flagged by YouTube’s algorithm).

The bad - these alternatives cause distractions for people from Bitcoin. They muddy the water. Bad experiences whitewash the entire space including tarnishing Bitcoins name and value.

The good - I can why developers experimented with all of these alternatives due to software problems they can solve. They can and do provide real world problem solving.

Shedding the Teenage Years of Bitcoin

Since the original vision of having a digital alternative to cash for payments and taking into consideration the relatively slow rate of transactions per second, Bitcoin has re-imagined itself.

Visa’s peak capacity for example is around 24,000 transactions per second.

The original vision of a digital cash obviously would run into a brick wall when looking at the Trilemma of options. It is understandable and justifiable that Decentralization and Security were chosen as they are a stronger foundation to build upon.

Bitcoin has distinguished itself as being the original and the best in breed for digital Decentralization and Security.

Embracing this limitation and embracing it’s solid foundation, the Bitcoin community slowly re-phrased language from “Digital Cash” to be more of a “Settlement Layer” and “Store of Value”.

What do these words mean?

Settlement Layer

If we didn’t have the current financial system -

Imagine 2 countries trading with each other. Yes, they could pay for each transaction there and then with some gold. However this is very labor intensive and slow to transport.

Alternatively, they could make note on a piece of paper each and every transaction. At the end of the month, or the end of the year - if there is an imbalance, they could ship over the difference in gold.

Effectively a logical ledger would be maintained on paper then settled up at the end with a difference in gold.

An emergent property of Bitcoin is that it works well as a Settlement layer. Businesses, Banks, Countries could use Bitcoin to settle larger denominations of money less frequently.

Store of Value

Bitcoin solved the centralized aspect of exchange using clever Decentralized approaches. If a transaction could be made from one party to another. It stands to reason that if one party held the Bitcoin and never transacted with it - it would be a store of value.

A perfect store of value is one that never diminishes.

Fiat currency - US Dollars, Canadian Dollars, British Pounds, Australian Dollars are all debased through printing of currency.

If they print at 10% per year, over 10 years your cash that you held in the bank is worth less than half as much as it once was.

So for $100k saved - you will lose roughly ~60% of your wealth in 10 years. For any one struggling to visualize this - the100k in your hand can only buy 38k worth of goods.

Given that the Fiat system can be inflated (and will always be inflated), holding onto Fiat currency (Dollars, Pounds, Yen) means you lose wealth every year.

Michael Saylor pegs the rate you must beat to keep your wealth (hurdle rate) as roughly the S&P Index. So call it 10%.

Bitcoin doesn’t erode. It doesn’t age. It doesn’t inflate.
It just sits and waits. And holds your wealth like a vault made of time.

Risk Management

Another emergent property of Bitcoin in a modern world is that as societies Fiat systems starts to collapse, governments become more and more desperate for resources. Taxes go up, austerity kicks in, working years go up and so on.

Traditional assets for wealth building become targeted as easy extorsion opportunities.

With houses bolted to the ground - Read about property taxes going up on real estate or about Canada’s government eyeing Home Equity Tax.

With the stock market - Read about The Great Taking where all the stocks you think you own - you don’t actually own.

With a third party - there is counter party risk. They could be hacked like Coinbase last week.

With Currency - if you hold a specific currency, you have currency risk. Compare Bitcoin to any currency on a chart.

The highest risk is holding your wealth in a debasing currency.

The second highest risk is holding your wealth in assets that are bolted to the ground that can be targeted.

Risks are getting larger and more frequent to those accumulating wealth.

Transforming How You See Bitcoin

No entropy. No landlord headaches. No middlemen.
A trillion dollars in your head, secured by a few English words.

I see Bitcoin as:

• A pristine store of value

• No entropy on the asset - it doesn’t age, it doesn’t need new carpets, painting, elevators fixed

• No counterparty risk

• Ability to send any amount at any time to anywhere

• You don’t need permission to transact

• You can move countries carrying a Trillion dollars in your head (the seed phrase)

• Secured by world class security

• It is highly divisible. You can carve off 1/100000000th and sell it. Whereas a house you have to typically sell the whole thing

Summary

When you see deliberate propaganda to instill Fear, Uncertainty and Doubt, you know you are heading down the right path. Always question everything.

Bitcoin is still early days - so read, understand and consider getting onboard that ship.

Its core values will give you more control over:

• Working until 65 to retire

• Work 5 days a week instead of 3

• Working 9am to 5pm

• Generational wealth

If you are interested - here is a firehose of knowledge from Michael Saylor. He has a great knack of explaining things in an easy to digest manner. If you are looking for conviction - this is a great start.