The problems of the euro and other currencies
Nakamoto’s development was prompted by his disappointment with our existing monetary system. In particular, he criticized the fact that credit money created “waves of credit bubbles” and that state central banks have repeatedly devalued credit money throughout history. Since money is created by banks by granting loans, it is possible to finance investments with new money without having to save money. If the central bank manipulates the interest rate to control the economy, boom-bust cycles are created. And if the government needs fresh money, the banks can do it by buying its bonds.
The advantages of Bitcoin
Bitcoin has a number of advantages over loan money. Since money is no longer created as a liability through lending, neither a state nor a central bank is necessary for its regulation, insurance and administration. The security of the transactions and the retention of value is guaranteed by the blockchain, which also simplifies the execution of transactions. The transaction costs are funded by Seigniorage, which is paid to computer operators to prove the validity of transactions in the blockchain. However, this only applies until the maximum volume of 21 million bitcoins defined by the algorithm is reached. After that, the verification of the transactions must be paid for by the users.