The week of 01/25 in a nutshell – News about Bitcoin and cryptocurrencies is in constant turmoil. It may happen that vital information gets lost in the daily news flow and you miss important points.
This format is there to remedy that. We return to the news of the past week in the Crypto Weekly to keep you informed on the current situation of cryptocurrencies.
The must-see in the area
For the unmissable of this week we find Thibaud who looks back on the evolution of banks, until the creation of Bitcoin and the emergence of Bitcoin banks.
The gold standard and its evolutions
Under the Gold Standard , banking institutions that lent to businesses wishing to borrow were required to hold sufficient quantities of gold in reserve to meet the withdrawal needs of their custodian clients. Monetary issuance was therefore naturally controlled by the scarcity of the underlying commodity : that of gold. A little later, in the 17th century , English bankers began to generalize a very profitable practice of lending more gold than they had in reserve.
A few centuries later, some major problems appeared in this system which has been inherited to this day. Gold conversation warehouses have been abandoned for companies specializing in money creation , now commonly known as “central banks” . One of the oldest such institutions is “The Old Lady of Threadneedle Street” , the Bank of England which was established in 1694 to support government borrowing and later served as a lender in last resort to commercial banks.
Seized with a new power, states have armed central banks with a fundamentally irresistible power: that of manipulating money to finance large-scale national programs without being sensitive to the budgetary constraints usually present in a company.
The birth of a free currency
Over the past 10 years , the global monetary base, made up of the total quantity of fiat currencies in circulation such as the euro, the US dollar or the yen, has therefore grown considerably under the impetus of easing programs. quantitative ( quantitative easing ) and injection of liquid . These various programs were put in place by governments concerned about economic recovery. Like an arsonist who sees himself trying to put out the forest fire he himself has started, these measures tend to create the problems they set out to solve.
With the appearance of the genesis block on January 3, 2009 , the Bitcoin protocol was a new discovery with the introduction of a fixed quantity currency of 21 million units (“BTC”), themselves divisible into 100 million of sub-units (“satoshis” or “sats”), for a total of 2.1 trillion of sats in circulation. Bitcoin’s supply schedule is therefore predictable with an “unfalsifiable cost” of production . This twelve-year-old project calls into question the role of a central bank in the management of money, and tends to redefine the place of a commercial bank at the peripheries of the Bitcoin network .