The host of the YouTube show “Rediscover Lost,” Keith Wille, performed a miracle for a family in Massachusetts. He found $46.000 hidden in the attic since the fifties. Back then, it was the equivalent of $421.603 today. That means it lost approximately 90% of its purchasing power. Devaluation is devastating.
What does this say about a deflationary currency like Bitcoin?
We’ll answer that, but first, let’s get back to the story.
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Finding the metal box
The family wanted to sell a house, but the rumor of buried treasure loomed above them. Then, as WIlle tells us in the show notes:
After years of failed attempts, this family grew tired of trying to figure out if a metal detector would work indoors and even hired a construction contractor to find the treasure supposedly hidden under the floor boards. The family eventually found me online and hired me to figure out where grandpa hid his money.
Armed with a metal detector and an endoscope camera, he found the metal box in less than two hours. From the recovered money, it was obvious that the package was under those floors since the fifties. Masslive reports:
Cash was packed to the lid of a metal box in the bundles, with individual bills dating all the way back to 1934, 1935 and 1950. The date Dec. 19, 1958, along with a teller number, was stamped on each currency strap.
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Collectible bills from a better time
To make the story more interesting, some of those bills were Silver Dollar Certificates and might be worth more than their devalued face value. That means they come from a time when money was sound like Bitcoin is. About the Silver Dollar Certificates, Investopedia tells us:
It was a type of legal tender that was issued by the federal government in the late 1800s. As the name suggests, the holder of a certificate could redeem it for a certain amount of silver. One certificate allowed investors to hold silver without having to buy the precious metal itself.
So, basically, they come from a time when money was backed by precious metal and the government couldn’t print it at will. A time when coins weighted. A time when every bill was a stock and devaluation an idea.
BTCUSD all time history on Index | Source: BTC/USD on TradingView.com
Devaluation is as simple as that
Famously, the U.S. government paid for the COVID crisis with newly printed money. The total quantity of new bills injected into the economy is a matter of much speculation and rumor. We could safely say that it was a lot, though. And they might print a lot more in the near future.
All of that printing devalues the Dollar in your pocket, it’s as simple as that. That’s what devaluation and inflation mean.
On the other hand, there will only be 21 million Bitcoin and the block rewards keep getting slashed by half every cycle. A finite amount and a decrease in availability generate deflation. It’s as simple as that.
Photo by Roman Kraft on Unsplash - Charts: TradingView