Bitcoin recently celebrated its 10th anniversary and marked a decade of its existence. According to Bitcoin’s whitepaper, it is explained as:
“a purely peer-to-peer version of electronic cash (that) would allow online payments to be sent directly from one party to another without going through a financial institution.”
Currently, Bitcoin is more than 80 percent down from its all time high from December 2017 at about $20,000. However, this isn't the first time Bitcoin has risen to great heights or gone down as it has been just following a cycle.
However, if we take a look at the fiat currencies, there have been a lot of failures and crashes with these as well as pointed out here.
There are 152 fiat currencies that have failed due to Hyperinflation.
Their average lifespan was 24.6 years and the median lifespan is 7 years.
82 of these currencies lasted less than a decade and 15 of them lasted less than 1 year. pic.twitter.com/xLjv7eUwZh
— Gold Telegraph (@GoldTelegraph_) January 17, 2019
A post on Bitcoin’s subreddit shared this long list of currencies showing that some of these have lasted about as long as a year or even less. Resource Investor summarizes the situation of fiat currencies rather well,
“According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value.
Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.
“The average life expectancy for a fiat currency is 27 years, with the shortest life span being one month. Founded in 1694, the British pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it’s worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost 99.5% of its value.”
The economists from the Austrian School of thought have been predicted the current system of fiat money to be socially and economically destructive scheme all along. It is even expected to have a disastrous impact on the global economy as it isn’t backed by gold or any other real asset. The current debt-based monetary systems isn’t exactly a rational arrangement.
As for the most recent cases of currency failure, the extreme currency devaluation hit Belarus between the period of 1994-2002 and Zimbabwe’s in 2000-2009. In these countries, due to hyperinflation, the local currency crashed and became worthless. The similar situation can be seen happening currently in Venezuela.
The country whose president introduced Petro cryptocurrency and whose citizens are turning to Bitcoin among other cryptocurrencies. Now, it could be said that there is no escaping history and fiat currencies eventually fail. What are your views on this? Let us know in the comment section.