• Evolutionary psychologists believe that the ability to “preserve wealth” gave modern humans an evolutionary edge over other humans.
• This article compares four commonly used wealth preservation technologies (gold, bonds, real estate and equities) to Bitcoin to show how they underperform and how Bitcoin can efficiently help save and plan for the future.
• The article focuses specifically on ETFs as equity instruments used as a means of long-term savings.
Humans have always sought ways to preserve wealth in order to gain an evolutionary advantage over other humans. This is why Nick Szabo wrote an interesting anecdote in his essay “Shelling Out: The Origins of Money” about how when homosapiens displaced homo neanderthalensis in Europe circa 40,000 to 35,000 B.C., population explosions followed. It is believed that this was due to the ability to preserve wealth through collectibles, such as handmade jewelry. To this day, there are a variety of wealth preservation technologies that have constantly changed and adapted to the technological possibilities of the time.
It is important to understand the different types of wealth preservation technologies available in order to determine which is the most suitable for one’s individual needs. In order to do this, one must compare and contrast the four most commonly used wealth preservation technologies today (gold, bonds, real estate and equities) to the most recent technological advancement, Bitcoin.
Gold has been used as a form of wealth preservation since ancient times due to its scarcity and relative lack of manipulation. Bonds, on the other hand, are a type of debt instrument that pays interest in exchange for a loan. Real estate is another form of wealth preservation, as it generates a steady stream of income from rental payments. Lastly, equities are stocks that can generate wealth over time. However, the most efficient form of wealth preservation is Bitcoin.
Bitcoin is a digital currency that is decentralized and can be used to store and transfer value. It is highly secure, with no counterparty risk, and is not subject to manipulation or interference from government or financial institutions. Additionally, Bitcoin can be used as a store of value, as it has a limited supply and is not subject to inflation or deflation. Furthermore, it is easily accessible, making it ideal for those who want to take advantage of its low cost and high liquidity. Finally, as an asset class, Bitcoin offers low correlation to other asset classes, making it a great diversification tool.
When it comes to ETFs, which are equity instruments used as a means of long-term savings, Bitcoin outperforms the traditional equities in terms of liquidity, cost, speed and security. This is because ETFs are subject to price fluctuations and are more susceptible to manipulation by large institutions. Additionally, ETFs are not as secure as Bitcoin and have a longer settlement time.
In conclusion, it is clear that Bitcoin offers superior wealth preservation capabilities compared to the traditional wealth preservation technologies. It is fast, secure, highly liquid, and is not subject to manipulation or interference. This makes it ideal for those looking to save and plan for their future.