This article is written by Federico Soattin, the Treasurer of Young European Leadership. He took part in the Bitcare Forum, one of Italy’s largest Bitcoin summits, and wanted to share the information he gathered there. If you have any questions, you can contact him at federico.soattin@younglead.eu.
When thinking where to put your savings, a common question arises: what should you invest in today?
The 2020s can be compared to the 1990s, a period filled with many investment opportunities. This abundance of choices can lead to uncertainty about whether to opt for reliable investments with relatively low ROI (Return on Interest), or rather invest in new and innovative options that might offer greater returns. Two notable areas for such investments are Artificial Intelligence and Bitcoin.
In today’s blog, I want to focus on Bitcoin, a topic often dismissed by those who say: “I simply don’t believe in it”. My goal is not to change your mind but to present some facts that will allow you to view Bitcoin from an objective perspective. This way, you can make a decision about whether you could envision yourself investing in it or not.
Bitcoin’s history began in 2008 with the publication of a nine-page (white paper) by an anonymous entity known as Satoshi Nakamoto. The document introduced the concept of a digital currency operating on a peer-to-peer basis, independent of authorities such as banks and governments.
One key advantage of Bitcoin over traditional currencies is its use of cryptography for security, making it extremely difficult to counterfeit. Additionally, Bitcoin has a capped supply of 21 million coins, which like gold, prevents inflation and enhances its potential as a valuable savings vehicle.
Let’s compare this to the euro. There are more than €1.5 trillion in circulation with approximately €156.6 billion being produced in 2023 alone. This means that around 10% of the total euros in circulation were newly produced in 2023, giving us an indication of the inflation rate for that year.
Now, let’s compare Bitcoin to gold by looking at their growth over recent years. In 2015, Bitcoin was valued at around €200, while gold was worth approximately €34.000 per kg. Currently, gold is valued at about €68.000 per kg, whereas Bitcoin has surged to around €60.000. This represents a 100% for gold and an incredible 30.000% increase for Bitcoin.
A common concern often raised is that Bitcoin consumes a lot of energy. However, this is a misconception. The global energy consumption for Bitcoin production is around 160 TWh. To put this into perspective, the worldwide energy consumption for air conditioners is approximately 2.000 TWh. This means that Bitcoin production uses only about 8% of the total energy consumed by air conditioners each year. Moreover, 60% of the energy used for Bitcoin mining comes from renewable sources.
Now let’s discuss Bitcoin’s integration into modern society and its potential influence in Europe. From the facts we’ve gathered, it’s clear that Bitcoin can function as an inflation-free currency powered primarily by renewable energy, suitable for transactions and savings. As we move towards a more digitalized society, it becomes increasingly important to consider a digital financial system and an official European currency. Such a system would eliminate the need to wait for the weekend to access funds or pay high fees for money transfers.
Bitcoin is a complex topic that cannot be fully covered in a single post. There are many other aspects to consider such as its functionality, various uses, the associated risks and benefits, and the level of risk involved, so feel free to contact me if you are interested in learning more about the topic.