Bitcoin in 5 words and three concepts

This article is available in French

This article is based on the statements of Yves Choueifaty in this interview.

🔗Characterizing Bitcoin in 5 Words

Three words that define Bitcoin and are common to fiat currencies:

• Digital
  Bitcoin is a digital object, just like the Dollar, which is a digital entry on a bank account.
  These entries are acknowledgments of ownership (credit or debit), except that there can be no debt entry in Bitcoin.
• Unforgeable
  It’s difficult to make counterfeit Dollars and even harder to forge Bitcoins.
  To this day, no counterfeit fraction of Bitcoin has ever been generated despite the efforts of many researchers.
• Peer-to-peer exchangeable
  Like the Dollar, you can give Bitcoins to your peer without going through an intermediary.

The other two words that characterize Bitcoin are not applicable to fiat currencies like the Euro or the Dollar.

• Decentralized
  Bitcoin’s governance is decentralized, unlike the Euro, which exists only thanks to the European Central Bank, whose board of directors—made up of a small number of people—holds the monopoly on monetary issuance in Europe. Sooner or later, this kind of monopoly abuses its power to take on roles (moral ones, for example) that it shouldn’t have, when its sole and unique mission should be price stability.
  In contrast, Bitcoin’s governance is decentralized. This means that Bitcoin’s rules can be controlled by everyone. Bitcoin’s operation is strictly defined by its algorithm, which is open (readable by all), freely distributable, and usable by everyone (network nodes). The Bitcoin algorithm can only change if it is validated by all the nodes running the algorithm; if just one node refuses, the change is rejected. This ensures that there is very little chance for anything fundamental to change in the Bitcoin algorithm. To draw a parallel with the Euro, “the Euro algorithm” changes as soon as the board of directors of the European Central Bank decides so—this is centralized governance.
• Scarce
  There will only ever be 21 million Bitcoins, it’s impossible for there to be more unless the algorithm is changed, which, as we’ve seen, is very unlikely and impossible without unanimity. There is a huge difference with the Euro or the Dollar, which have unlimited money supply—these are inflationary debt currencies. On this point, see inflation is the increased abundance of money and Monetary policy and inflation control.
  To put things in perspective, the intrinsic value of an apple doesn’t change over four years, while its value measured in Euros does, because over four years the Euro itself loses intrinsic value. History shows that currencies with unlimited monetary supply lose value over time, and thus the people who use them have less and less confidence in these currencies and no longer wish to store and use them.
  In this respect, Bitcoin offers a more reliable/stable store of value because there will never be more than 21 million Bitcoins.

🔗Reflections on Bitcoin Adoption

The current instability of Bitcoin when measured in Euro/Dollar terms comes from the clash of two scenarios:

1. The first scenario claims that Bitcoin will be worth 0 in the medium or long term.
2. The second scenario claims that one Bitcoin will be worth around $26 million by 2050.

Bitcoin is a disruptive innovation that can change the world and thus requires us to let go of the old world; in this sense, it is subject to the adoption cycle as described by the Kübler-Ross® curve.

One of the first reactions to Bitcoin was denial, but this reaction is now mainly confined to those who are absolutely uninterested in either the economy or this technology and its implications.

Next comes a stage of anger, with three main drivers:

1. Morality
   • Bitcoin is bad for the planet, without considering whether the current monetary system is any better.
   • Bitcoin escapes government control and is thus a danger to democracy, since money must be controlled by a state to be fairly redistributed and used for legitimate purposes.
   • Others… #TODO
2. Conflicts of interest
   Just as candle makers looked unfavorably upon the advent of electricity, banks have a lot to lose from Bitcoin adoption.
3. Ignorance
   We tend to be more critical of something we don’t understand (or understand poorly) than of something we’ve studied and understood.

To this day (2025), the first scenario—that claims Bitcoin is worthless—is slowly being disqualified because, instead of viewing this fantastic innovation through a moral lens, we’re starting to look at it in terms of utility, efficiency, and legitimacy. Because asking whether Bitcoin is good or bad is like asking whether a knife is good or bad… That’s not the right question!
The right question for a technological innovation should be whether it works, whether it effectively fulfills the roles for which it was designed, and, if so, how to derive benefit or utility from it.

Economic history has advanced in tandem with the standard of value. One of the first standards of value was probably flint arrowheads because they were vital and difficult to make.
As technology progressed, it was necessary to change the standard until 1973, when it was decided that the Dollar would serve as the standard without needing to be backed by gold. But as Friedrich Hayek points out, especially in his book The Road to Serfdom, if a group of people holds a monopoly over money issuance, sooner or later, they will abuse it in an authoritarian and dangerous way—dangerous for the currency itself, because it ends up devalued and loses the trust that a standard should inspire.

• Who would reasonably put $200,000 in bills in a safe for 20 years knowing that in 20 years at least half their savings will be gone?
• What’s the point of trading a product as useful, rare, and hard to find as oil for bills that a country can print at will at no cost?
• What commitment is a state making when issuing a bond denominated in its own currency, which it can print at will at no cost?

The deception of the Dollar standard is reaching its limit and will radically change the way Bitcoin is perceived—and consequently, its value, which is still far from reaching its point of stability.