Bitcoin Dethroned Fiat yet falls short
Why Bitcoin is King and It Will Continue to Be Unless We Offer Something That Is More Resilient
I will give you the punch line if you do not want to bother your fingers scrolling to the bottom:
BTC is King because it is sovereign money, it is money by the people for the people, it is decentralized. You know what else became the biggest empire in modern times that ran on the same principles? The United States Republic! The white paper of the Republic was written by the people for the people, for sovereignty and decentralization!
But now let’s dive into the details and the story of how we got here.
My Journey with Bitcoin
I clearly remember where I was when I first really learned about the infamous BTC. I was walking up the hilly streets in the Castro in San Francisco on one of those cold summer days in San Francisco. My dear friend, who I have shared a few lifetimes with, was telling me how he was buying this new imaginary money called Bitcoin — money not backed by debt but backed by the integrity of the code, the code was god and the bits were money. Honestly, I did not get it one bit (pun intended), but for real, I did not. I just felt this primal fear of Missing Out and being left behind. We call this herd mentality, this primal fear that if you are left behind the herd, you will not survive on your own. I did not understand how to even buy it, and at that time, I did not have a lot of extra capital to buy much into it anyway. He told me at some point he had 20 of this magical money, but they somehow got lost in some exchange (Mt. Gox), yet he was still a believer in it and said I should check it out.
Let’s back up a little further down the timeline here.
The Fiat Collapse I Lived Through
I grew up in Bulgaria.
Not the shiny EU Bulgaria you see in brochures, but the post-Soviet chaos of the early 90s — where fiat currency didn’t just wobble, it collapsed. I remember hyperinflation like a childhood ghost that never stopped whispering. One day you could buy bread, the next week the same money couldn’t buy a damn matchstick. Prices doubled every few weeks. Savings evaporated. People were trading soap and cigarettes. The banks imploded. The government resigned. And somewhere between all that, a generation learned what it meant to be robbed without a gun.
I’ve lived fiat collapse. I know what it smells like when your national currency becomes toilet paper. And I know what it looks like when a desperate government prints money to delay its own funeral. So when I see what’s happening with the dollar, I don’t need an economist’s opinion. I’ve already seen Act One.
Returning to Bitcoin
So going back to this Bit Money, that story with my friend in SF clearly left an imprint on me, but I did not do much with it until I got to go to that same friend’s wedding almost a year later and had the honor of being his best man. As I was managing to support him for his magical day, we managed to swap some more stories about BTC, and I finally gave in and opened a Coinbase account and bought my first BTC at $2,410.00 on June 1st, 2016. I thought I had completely missed the train and I would never catch up.
Again, I want to emphasize I got in simply from a place of FOMO, not from a place of education and understanding, and that is the lesson in this whole article. Even today, few people take the time to learn why BTC is king and fiat is trash.
Because I did not understand, from there I FOMOed into the altcoin hype and the narrative that BTC is old and slow and it is like MySpace, and ETH was Facebook. ETH was not only smart internet money but it was programmable smart money — come on now, that sounds hot, you want that. Who wants old and slow digital money that you can’t program? So I got out of BTC and chased the altcoin hype and ICO craze of more made-up projects not backed by anything sound or reasonable.
The Fed’s Zero Reserve Policy
Let’s move down the timeline. Do you guys remember what happened in 2020? March of 2020 to be specific… are you thinking worldwide pandemic? Yes, that was a big deal, but here we are talking about sound money and not sound money, so there is something else that happened that very few people to this day know about.
Here is some history for you:
On March 15, 2020, the Federal Reserve announced the reduction of reserve requirement ratios to zero percent, effective March 26, 2020. This action eliminated reserve requirements for all depository institutions, effectively replacing the fractional reserve banking system with zero reserve requirements. Just as a reference, the World Health Organization announced a worldwide pandemic on March 11th. Damn, the Fed is fast on their feet to come through when you really need them to save the day with another nonsensical solution. Oh, and if you haven’t noticed, there is no more worldwide emergency, but we still have zero fractional reserve banking.
I am not that smart, so to me, fractional reserve did not make much sense to begin with, but zero fractional reserve makes zero sense.
By the way, who runs the Fed? Here is a simple answer for you:
The Board of Governors is “public” only in name — appointed, not elected.
The regional Federal Reserve Banks are owned by private banks, and their shareholder list is not published.
The public has no vote, no audit rights, no transparency.
So there is this central agency (and this matters when we get back to why BTC is King) that didn’t need new approval or public debate to eliminate reserve requirements. It already had the authority under the 1913 Federal Reserve Act. In March 2020, it used that power to quietly end a foundational pillar of banking — without public vote, without Congress, and without headlines.
Inflation and the M2 Money Supply
So what did that lead to?
M2 Money Supply increasing by 40% in the span of 2 years (2020–2022):
The M2 money supply in the United States experienced significant growth during 2020–2022. In January 2020, M2 was approximately $15.4 trillion, and by April 2022, it had risen to about $21.7 trillion.
So yes, in two years, the dollar in your wallet got debased by 40%.
I Remember arguing with more than one person that was telling me that there was no inflation in 2022, because they read that in The Economist. Yes the professionals those well educated economists were telling us there is no inflation right as they where debasing all of our money.
Meanwhile, me as a builder who runs a construction company, I watched a 2x4s go from $2.50 to $10. Plywood from $30 to over $100. And economists had the nerve to tell us, “There’s no inflation.”
Oh, and do not forget, I have lived through a collapse and the debasement of money once before, so this is not unfamiliar to me. The only saving grace was that the rest of the world did the same to their money in even more alarming ways, so that left the dollar on the throne as the imaginary King.
But here we are talking about the real King — what makes it the King and why it will continue to be unless we find a more sound solution, which has not existed yet since then.
What Is Fiat Money?
So what is Fiat money really?
Fiat (from the Latin “let it be done”) refers to government-issued money that has no intrinsic value and is not backed by a physical commodity like gold or silver.
Fiat currency is money that is:
Created by government decree
Not backed by a physical asset
Accepted because people trust the issuing government and its economy
Quick Lesson: All Fiat Currencies Eventually Die
Here’s what history shows us:
Fiat currencies aren’t backed by anything scarce or real.
Their value depends entirely on trust in the government issuing them.
That trust always gets abused — usually through overprinting (aka inflation), war financing, or debt-based expansion.
So if this alone was not scary enough, the dollar is not only fiat but is also a debt-based currency.
The Debt-Based Currency System
Which means, money is created by borrowing. In other words:
New money only enters the system when someone (individual, business, or government) takes on debt.
Banks don’t lend out deposits — they create new money when they issue loans.
You get money → they get your promise to repay with interest.
Bottom Line:
In a debt-based system, your loan is the money. The money didn’t exist before you borrowed it.
How does this work in practice? In layman’s terms:
The U.S. Government Wants to Spend More Than It Has
Congress passes a bill:
“We’re going to spend $1 trillion.”
Problem:
The government doesn’t have that money sitting in a vault.
So it needs to borrow.
The Treasury Issues U.S. Bonds and The U.S. Treasury says:
“We’ll issue $1 trillion worth of U.S. Treasury Bonds.” These are basically IOUs — promises to pay back the amount + interest in the future.
They’re called:
Treasury Bills (short term)
Treasury Notes (medium term)
Treasury Bonds (long term)
The Federal Reserve Steps In and says: “We’ll buy those bonds.”
So what does the Fed give the Treasury in exchange for $1 trillion of bonds? Nothing real. Just newly created dollars, typed into the Treasury’s account on a screen. This is where the new money enters the system.
Important:
The Fed doesn’t “print” money — it credits bank reserves with digits.
That money never existed before.
It’s backed by debt.
Treasury Now Has New Dollars to Spend, $1 trillion freshly conjured by the Fed, and it starts spending:
Stimulus checks
Military contracts
Infrastructure
Social programs
Bailing out Wall Street
Whatever the budget says
This newly created money floods into the economy. The Debt Is Now Owed — with Interest. Now the U.S. owes the Fed (and other bondholders) $1 trillion + interest. Where does the money to pay that come from?
Pay attention here because this is where you and I come in: Here Enters the IRS and they says to the people: “You must pay your taxes.”
The taxes don’t fund roads. They don’t fund schools. They go first to cover interest payments on debt to the Fed and other bondholders.
So the loop is:
Fed creates money from nothing (in exchange for bonds)
Treasury spends it into the economy
People are taxed to pay the interest
The cycle continues
This is how the labor of the population services a privately-owned debt machine. By the way, did we figure out who owns the Fed yet? Can you look that up for me?
The Flaws of Fiat in Theory and Practice
Here I want to give you one rational explanation because, put simply like this, this looks like it is the a system that defies logic, and a 6-year-old could have come up with something more sound than this. We can safely increase the money supply in proportion to economic growth, so prices stay stable and we avoid inflation or deflation.
Example:
If the economy only has 1 apple and $1, price = $1 per apple.
If we now produce 10 apples, but still have only $1, price = $0.10 per apple (deflation).
To match new productivity, we increase the money supply to $10.
Now price per apple = $1 again.
This is the theory of monetary elasticity: Money expands with production, not ahead of it. This is what central banks claim they’re managing — keeping “price stability” by adjusting the supply to match real output (GDP).
But in Practice: That’s Not What Happens — here’s why the theory breaks down:
Money isn’t created when production increases — it’s created when debt is issued.
Banks create money when people/governments borrow, not when new apples are grown.
So money supply expands even if there’s no real productivity growth.
New money isn’t evenly distributed.
It doesn’t go to apple farmers — it goes to Wall Street, corporations, and government contractors first.
By the time it reaches the everyday person, prices have already gone up. (This is called the Cantillon Effect.)
There’s no accurate measurement of economic output.
GDP is a flawed metric — it doesn’t distinguish productive growth (real value) from speculative or extractive growth (e.g., financial games).
Central banks overshoot. A lot.
Money printing is often politically motivated, not economically restrained.
Result? More money than productivity = inflation.
The system needs endless growth.
Because of interest on all that debt, the money supply has to keep expanding faster than real output just to stay afloat.
I know it’s a lot to wrap our heads around, and I am doing my best to just speak in bullet points to keep this to the point and as short as possible.
Again, the whole idea of writing this is if enough people understood this, then you will understand why BTC is King, even though it is flawed in many ways. And funny enough, people are way more aware of the flaws of BTC than they are aware of the flaws of Fiat Debt-Based currency.
Here you see that the only thing backing debt-based currency is the soundness of the government issuing the bonds and the promise of your future earnings to pay the debt to the Fed! Did you find who owns the Fed yet?
Bitcoin: A Sound Alternative
Is it time to compare all this insanity to something more sound?
Let’s look at BTC, also called Sound Money, Freedom Money, Money for the people by the people, created right after the global financial crisis of 2007.
When the BTC white paper was released on October 31, 2008, the U.S. M2 Money Supply at that time was $7.8 trillion. And as of February 2025, the U.S. M2 money supply was approximately $21.67 trillion — about 3x in 17 years. I will not go into the implications of this.
1 BTC was zero USD at the moment of inception.
Today, as of March 2025, it is roughly (+/- $10K USD) — $100K USD.
Why is that?
The simple answer is because compared to Debt Fiat Currency (which, by the way, is mostly numbers on a screen or, in other words, also digital money), BTC makes 100 times more sense.
The Flaws of Bitcoin
Lets start with the flaws of BTC:
Energy Consumption (Environmental Impact): “Bitcoin uses more electricity than some countries.”
Volatility: “Bitcoin is too unstable to be a reliable currency.”
Scalability (Transaction Speed & Cost): “Bitcoin is too slow and expensive for everyday use.”
Illegal Activity & Crime Association: “Bitcoin is used for drugs, moneyivado, and crime.”
Too Technical for the Average Person: “It’s too complicated for normal people to use or understand.”
Centralization of Mining: “A few mining pools control the network.”
Lack of Privacy: “Bitcoin transactions are public and traceable.”
No Intrinsic Value / Not Backed by Anything: “Bitcoin is just code — what’s it worth?”
Regulatory Uncertainty: “Governments can ban it.”
Unequal Early Distribution / Whales: “A small number of people own most of the Bitcoin.”
Irreversibility of Transactions: “If you make a mistake, the money’s gone.”
“Bitcoin Is Old Tech”: “It’s slow, outdated, and can’t evolve like Ethereum or Solana.”
🔍 Honorable Mentions:
Fork Wars (2017) — Bitcoin vs. Bitcoin Cash confused many.
Public Confusion — Many still think “Bitcoin” = all of crypto.
No Built-in Governance — Hard to upgrade protocol (which is also its strength).
A lot of those can be addressed, but I will not go into that right now.
Wow, you read all this, and you might think, how in the world is this flawed system of money is King? And it is at $100K USD?!
Why Bitcoin Is King
So let’s answer the question: why is it King and why is fiat trash? Because trust in the dollar is collapsing faster than trust in Bitcoin is growing.
Bitcoin’s value isn’t rising — the dollar is shrinking.
Since 2009, Bitcoin’s code has stayed the same.
The dollar’s supply? Has tripled.
People are buying Bitcoin to escape a system they know is rigged. Scarcity, sovereignty, and incorruptibility are in high demand.
Bitcoin = fixed supply
Dollar = infinite supply
So naturally, one unit of Bitcoin demands more and more dollars to acquire it. Because its rules are fixed, its supply is finite, and its value is not diluted by anyone — ever.
“Sound money” means money that can’t be manipulated by governments, banks, or central planners. What makes Bitcoin sound:
Hard cap of 21 million coins
No central authority can change the supply
Transparent ledger (you can audit the monetary policy in real-time)
Predictable issuance (halvings every 4 years)
Cost to produce (Proof-of-Work) prevents cheating the system
Compare that to fiat, where supply depends on who’s in office, what lobbyists want, and how many bombs they need to fund.
Because it separates money from violence. Fiat money is enforced by guns, taxes, and war. Bitcoin is enforced by math, energy, and voluntary participation. There’s no coercion in Bitcoin. No military required to protect it. No threat of inflation used to silently tax you.
It’s a monetary system that doesn’t require war to survive. That’s peace. Because no one controls it — and everyone can use it. No government created it
No corporation owns it
No central bank can issue more
No single group can shut it down
Anyone with a phone and internet can join the network, verify the code, and transact freely. It’s decentralized, open-source, and borderless. That makes it the first truly public monetary network in history.
Bitcoin vs. Fiat: A Comparison
Why is Bitcoin better than fiat? Let’s line it up clean:
Fiat currency and Bitcoin operate on fundamentally different principles — one is designed for control and manipulation, the other for freedom and integrity.
Fiat money has an unlimited supply, which means it can be inflated at will by governments and central banks. Bitcoin, on the other hand, has a fixed supply of 21 million coins. It is inherently deflationary — scarce by design, making it a reliable store of value over time.
Fiat is controlled by centralized authorities — the Federal Reserve, governments, unelected committees, privet banks and bankers — who can change the rules, interest rates, and supply whenever it suits their goals. Bitcoin is controlled by no one. It runs on a decentralized network of nodes and miners where the rules are enforced by open-source code and global consensus. This is one of the biggest and main differences. There is no some unknown and unaccountable central body making decisions on their own that mostly serve the interests of those making the decisions. It is decentralized — by the people for the people!
When it comes to auditability, fiat money is opaque. You don’t get to see how much is being printed, who benefits first, or where the bailouts go. I will keep pointing the obvious out, one unknown and unaccountable central entity makes those decision. Bitcoin on the the other hand is fully transparent — every transaction, every coin, every issuance is recorded on a public ledger that anyone can verify in real time. Which by they way would make zero sense to use a for crime as it is fully transparent one of the main critics of BTC by the central entities.
Fiat systems come with censorship risk. Your bank account can be frozen, your transaction denied, your funds seized. Again all this control by, you guessed one one central unaccountable entity. With Bitcoin, there is no central authority to stop or reverse your transaction. It is permissionless and uncensorable — you don’t need approval to participate.
Fiat loses value over time. Inflation is built into the system, quietly taxing your savings year after year. Bitcoin, on the other hand, gains value over time, as demand grows and supply remains absolutely fixed. It rewards patience, not extraction.
And lastly, access: fiat is gatekept. You need permission to open an account, you’re subject to credit checks, borders, ID laws, and institutional bias, EIN numbers and so on. Bitcoin is open to anyone with an internet connection. No bank, no ID, no intermediary. Just you, your keys, and the network. This is also huge factor, not only no know controls it but no one can stop anyone from using it. Do you know how many people BTC has lifted from poverty and given so many an economic opportunity simply by this factor?
The Future of Money
BTC is sovereign money, it is money by the people for the people, it is decentralized. You know what else became the biggest empire in modern times that was founded and at least in its early day ran on the same principles? The United States Republic! The white paper of the Republic was written by the people for the people, for sovereignty and decentralization!
Hmm, what can we learn here?
Maybe that we the people value decentralization and sovereignty more than centralized structures and organizations like governments and large top down corporations, and when you create a system that empowers that, they overtake the bound-to-fail centralized entities!
So maybe we can learn from those two profound examples of success in recent history and embrace those tools and principles.
It blows my mind how 99.9% of the crypto community looks at regulation and seeks centralized approval to exists. Did BTC asked for permission to redefine our decrepit economic system build on house of cards and create a new asset class? Basically, BTC paved the way to true sovereignty, and yet we are begging to find our way back to the broken system.
The biggest scam of all is “stable tokens.” As you can see clearly here, I have outlined to you why fiat debt currencies are trash, the main motivation for many to move most of their assets into crypto holdings. And yet now we are in a supposedly decentralized ecosystem, and we can’t wait to tie ourselves back to the trash and to dare call it “stable”. How about “trash token” we use them cause we still do not know how to live in harmony with the planet and we are still the only specie that creates trash on the planet and that represented in our curencies. I know I am being harsh, I think I am just passionate about a brighter future…
Let’s be real — Bitcoin is flawed too, far from perfect and further more does not solve the problem of fiat debt money because it does not not functioning as money. It’s an asset, not a currency. And you know why the rich get richer? Because they hold their “money” in assets. In other words they hold value in what is actually valuable, so if money is getting debased it does not matter if you are holding value in valuable things, like gold, art, land and now you guessed it BTC. BTC has created a new asset class and has not solve the fiat debt base currencies problem. And as always those that profit from asset classes arethose that can afford to own and hold assets in a long term, in generations even.
And when it comes to usable practical money nobody is buying groceries or paying rent with BTC or very very few are. People use it to store value and move wealth — not to circulate or regenerate it. Sure, El Salvador’s trying to make Bitcoin a currency and use it as money, and yet it is government-custodied and centralized — not the free system we dreamed of, in other worlds it is centralized once again.
And here’s the real issue: For Bitcoin’s price to keep rising, it has to keep pulling money out of the real economy. It is not helpful for the circulation of money, It starves movement, slows spending, and concentrates power. You know what happens with things in nature that do not circulate right!
So who wins? The people who can afford to buy and hold — the already wealthy. Everyone else? Same trap, different skin: A few hold the assets. The rest hustle in the velocity economy, where everything leaks and nothing compounds.
Bitcoin is not regenerative. It’s extractive-neutral at best. It doesn’t create value — it just holds it. It’s digital gold: scarce, secure, but ultimately passive. You don’t plant Bitcoin and grow food. You don’t stake it to restore ecosystems. You don’t spend it to circulate value through your local community.
And because of that… It’s not enough.
Is it time we wake up and embrace the tools we have to create a brighter future?
Can we use these lessons to truly transform the world and create a future that is of service to life and incentivizes regeneration?
What if we created even more sound money? Money backed by sovereign land, perhaps? That incentivized true regeneration, not distraction?
We need sovereign money that is actually used as money.
What if our currency grew food? What if it healed land? What if it made us remember we belong to Earth?
I have some ideas. If you want to talk more, hit me up, and we will dive deeper.
