I created an article day before yesterday how bitcoin has fulfilled what fiats are unable to fulfill, you can check the article below about how fiats are subjected to governmental manipulations in a way fiats are being well devalued and depreciating over time. Unlike bitcoin which is not a depreciative asset like fiats, bitcoin is a deflationary currency and I prefer it over fiat.
https://www.shutterstock.com/image-photo/bitcoin-laptop-wallet-virtual-currency-gold-1043355598IntroductionBitcoin, being the first and the most successful cryptocurrency, has being well adopted in many countries of the world which has reflected through its increasing marketcap and price that also proved it to be a well known deflationary currency. Bitcoin has been increasingly and successfully adopted and proven to not be a ponzi or regulated in any way by any centralized authority, everything about bitcoin is open source and available to the public to the extent bitcoin community are even regarded as the founder of bitcoin, Satoshi Nakamoto. Although, officially, Satoshi Nakamoto is the creator of bitcoin in 2009.
What money isMany people do not know what money is, like I ones thought money is the first which are acceptable as a means of payment in individual countries, but this is a misconception. Money is anything that has intrinsic value and that can be spent. Good examples of money are bitcoin, other cryptocurrencies (altcoins), gold and fiats. Among them all, is a money called bitcoin, created in 2009 and has now being greatly accepted and adopted in the world due to its decentralized nature.
Money vulnerable to theft and depreciation until the onset of bitcoinBefore the onset of bitcoin, all types of money were either vulnerable to theft or depreciation, there was a time in the past when there was money but no bank, people will still think of a way to protect their money, but at the time, money were vulnerable to theft. So, later comes bank, to help individual to keep their money, fiats was adopted and was accepted by all countries of the world, and money centralized regulation evolved. Now, fiats are manipulated, the manipulations are from governments because fiats are centrally regulated and due to this, money owned by individuals are manipulated and making fiats to be a depreciative asset.
Money like gold that are physical are more vulnerable to theft while fiats kept in banks are more vulnerable to governmental manipulations. All these do not make money characteristics to be completely fulfilled until the onset of bitcoin that created indirect bridge known as blockchain between fiats and cryptocurrencies. Now, people can hold bitcoin in a way to do away with theft and central (governmental) manipulations.
Fiat inflation vulnerabilityAlthough, the central bodies (governments) may not be blamed at times for the reason they are manipulating the fiats, especially while devaluating it during inflation, and can be blamed when their is excess fiat creation and introduced into circulation. Fiats are manipulated/devalued for the benefit of the country but making citizens of the country to lose and make their worth depreciating. That is why fiats needs alternative, a kind of money that will be easy to spend like fiats and yet not vulnerable to governmental manipulations, bitcoin created the bridge to that part.
There are many strong fiats, while some are weak and more volatile, a good example of strong fiat currency is dollar, and can be used as a good example of bitcoin-to-fiat price trend comparison. For the past decade, bitcoin hodlers have more increase of 20% in bitcoin price not actually as a result of bitcoin instrinsic price increase, but due to dollar that is not immune to devaluation and gradaully depreciating over the past years.
This was taken when bitcoin was at a price slightly above $10800 in accordance to a crypto news. A decade ago bitcoin price gainLimited supply + marketcap = 80% in bitcoin price
USD deprecuation = 20%
(Limited supply + marketcap) + USD deprecuation = 100% butcoin price trend.
https://cointelegraph.com/news/fiat-inflation-has-cost-bitcoin-hodlers-20-over-the-past-decade/ampIf you check some other countries like African, where fiats are more vulnerable to depreciation, these would be the worst cases. This is one of the major reasons the need for bitcoin especially. Normally, fiats are depreciating assets by design, while physical money can still be vulnerable to theft, but with expert knowledge about bitcoin, bitcoin is not vulnerable to theft, and also not vulnerable to governmental regulations. Bitcoin has limited supply of 21 million, and this makes it a deflationary currency, the more people adopt it, the more people make use of it and the more it is getting stronger, and also increasing in marketcap and price. Although, the price of bitcoin may seem decreasing at times, but later, the price will increase unlike fiats that are constantly depreciating.
Centralized (governmental) bodies compromising bitcoin and crypto in general. Nowadays, governments have now being trying to make bitcoin so centralized, many people are now using bitcoin do not even know what private key or seed phrase is and depending on third party while not knowing the third party are actually third party due to how fiats are working, they thought bitcoin and other crypto works that way, therefore not even knowing about privacy. These are all wrong because bitcoin is a privacy currency, people can hold it without depending on any third party which is the best way to go while dealing with bitcoin with the current settings, some people even knowing about this but because of trading flexibility, they still keep their bitcoin and other crypto using centralized party services, which makes them not to be the owner of the coin on blockchian while the third party are not safe and secure.
People do not need to keep bitcoin with third party, you can keep it yourself without anyone knowing, all you need to do it to make use of noncustodial wallets, generate your seed phrase and/or private key. Storing the seedphrase and/or the private key in a safe place that is safe from thieves and damages. If the seed phrase and/or private key is compromised, that means all your funds are lost.
Some approaches towards seed phrase/private keys protectionBitcoin is digitally created, users should be digitally conscious, while privacy, security and safety should be maintained. Malicious actors are also trying their best to steal bitcoin from people having it. But, there are many approches to avoid hackers from stealing bitcoin, few of this is discussed below.
1. Avoiding custodial servicesThere are different custodial services, although they have helped in bitcoin adoption, but still must be avoided, they make use of hot wallets to hold customers assets, while hot wallets are prone to hackers activities, and they are targeted by hackers because the custodial party keeps thousands to millions of customers assets. Most custodial services are often hacked and many have resulted to lost of users funds and never recovered.
2. Avoid using hot wallets for high savingsAlthough, hot wallet can be good for saving low amount of bitcoin, while experienced users can still avoid hackers by avoiding malware on the device used, but for saving high amount of bitcoin, cold wallets are best, and for ease of use and for frequent transactions, hardware wallet is good as a type of cold wallet.
3. Use of Shamir's secret sharing to protect seedphrase/private keySeedphrase or any other sensitive information like private key can be protected by the use of shamir's secret sharing, in a way the the seed phrase is converted into secrets, and the secrets are divided into parts for high protection.
4. The use of multisignature walletMultisig wallets are wallets that can be regarded as M of N wallet, in which the wallet can be generated for N users having their own private keys while M users among the N users will be able to sign transactions. This makes it difficult for hackers to penetrate, even if one private key is compromised. It can also help in a way another wallet can be created and the bitcoin in the previous wallet is sent to new wallet if any of the M or N users lost his/her private key, or if anything like malicious activity is suspected.
There are still many other approaches, like having more than one wallet. But the approaches to be used should not be too tedious in a way wallet owner will not be able to recover back his/her wallet during wallet lost.
ConclusionBitcoin is money, the first successful decentralized currency, which was created as an alternative to centralized fiats and also altenative to money that are vulnerable to physical thefts like thereby fulfilling what early days money can not fulfill.
But, that said, we should also know how fiat is the currency we spend often, normally, I keep bitcoin, but if I want to spend, I convert it to fiat and use it for spending purpose, fiat is only useful for me during spending. I do not have more than $10 of fiat in bank but I have more bitcoin which is the best way for me.