by Matiur M. Rahman | New York, USA | matiur.rahman@thebitcoinworld.org
Bitcoin is a digital currency that operates on a peer-to-peer network, eliminating the need for intermediaries like banks or payment processors. This decentralization makes it a potentially disruptive force in finance, enabling direct transactions between individuals across borders without relying on traditional financial institutions.
What sets Bitcoin apart from traditional assets is its decentralized nature, cryptographic security, and fixed supply of 21 million coins. Unlike fiat currencies, which can be printed at will by governments, Bitcoin is deflationary by design, with a limited supply that makes it scarce. This scarcity has led many to refer to Bitcoin as "digital gold"—a store of value that serves as a hedge against inflation and economic instability.
Bitcoin challenges conventional ideas about money. While fiat currencies are susceptible to inflationary pressures, Bitcoin offers a fixed and predictable supply, which many believe will make it a global store of value in the long term, much like gold. As a result, Bitcoin has sparked a race among 8 billion people to claim a share of its limited 21 million coins.
Just as the internet connected people within a virtual network, Bitcoin is creating a global monetary network, uniting individuals across borders with a shared digital currency. Now, it’s up to each nation-state to decide whether they want to join this evolving monetary system or risk being left behind in the financial revolution.
Since its inception in 2008, Bitcoin has evolved from a groundbreaking technological concept into a transformative force reshaping the global financial landscape. The first step in understanding its potential is to grasp the foundational concepts, starting with the history of money and the core technology behind Bitcoin: blockchain.
Understanding blockchain technology is essential for fully appreciating the power and potential of Bitcoin, which continues to pave the way for the future of decentralized digital economies. Therefore, educating the citizens of the nation about Bitcoin should be a top priority, empowering them to participate in this financial revolution. Public awareness initiatives, providing accurate and comprehensive information about Bitcoin and its potential for the near future, should be launched immediately.
People work hard and save their earnings in inflationary fiat currencies, which constantly lose value over time. While some individuals invest their savings in real estate and other tangible assets, Bitcoin stands as the hardest asset humanity has ever created. Unlike traditional assets, Bitcoin's fixed supply and decentralized nature make it immune to inflationary pressures, offering a level of scarcity and security that no other asset can match.
If individuals had the ability to store their hard-earned wealth in Bitcoin, it would empower them with financial sovereignty, allowing them to preserve the value of their labor and secure their financial future against the erosion caused by inflation and economic instability.
Empowering individuals to take control of their wealth by self-custodying Bitcoin would allow them to become their own bank. A personal digital wallet, combined with the proper knowledge, gives individuals access to global financial resources and the opportunity to drive their own financial growth.
Businesses and corporations are continuously battling inflation and currency devaluation, both from local government policies and the global expansion of the money supply. Holding large amounts of fiat currency on their balance sheets can hinder growth and erode value over time. By holding Bitcoin, businesses can shield their reserves from the inflationary pressures that affect traditional fiat currencies. Bitcoin provides a universal hedge against currency devaluation, offering a more stable store of value.
To stay competitive, businesses can begin integrating Bitcoin-backed applications and products with traditional financial systems, positioning themselves within the emerging global Bitcoin standard economy.
Bangladesh’s foreign exchange reserves have traditionally been held in U.S. dollars, gold, and other foreign currencies. By diversifying a significant portion of these reserves into Bitcoin, Bangladesh could reduce its reliance on the U.S. dollar and better manage the risks associated with fiat currency volatility. Bitcoin’s non-correlation with traditional assets like gold and the U.S. dollar could help cushion the country from shocks in the global financial system.
A Strategic Bitcoin Reserve would offer several key advantages to the nation’s economic and geopolitical standing:
Bitcoin mining is the process by which transactions are added to the Bitcoin blockchain and new bitcoins are created. It involves using computational power to solve complex mathematical puzzles, which requires significant energy. Miners compete to solve these puzzles, and the first miner to succeed is rewarded with newly minted bitcoins (currently 3.125 BTC per block) along with transaction fees.
Bitcoin's proof-of-work (PoW) algorithm is essential for ensuring the system’s security and decentralization. Mining requires real-world resources, primarily electricity, and, in some cases, specialized hardware known as ASICs (Application-Specific Integrated Circuits).
As Bitcoin becomes more widely accepted and its value increases, a nation-state mining Bitcoin could accumulate significant reserves on its balance sheet, potentially leading to long-term wealth accumulation as its holdings appreciate in value.
Furthermore, Bitcoin mining has the potential to drive innovation in fields such as cryptography, data science, and distributed computing. Governments could incentivize the development of local mining hubs and research centers, fostering expertise and technological advancements in these critical areas.
The Bitcoin mining hash rate refers to the total computational power used by the Bitcoin network to process transactions, measuring the number of calculations (or "hashes") performed per second by all miners combined. A higher hash rate indicates a stronger, more secure, and decentralized network, as it enhances the network’s ability to validate new blocks and mine Bitcoin.
Through its proof-of-work technology, Bitcoin could become a strategically vital tool for national security in the digital age. A higher mining hash rate plays a crucial role in the security, stability, and overall functionality of the Bitcoin network. A nation-state with a higher hash rate can potentially dominate by projecting power in cyberspace—a domain where traditional military forces may not have the same level of control or effectiveness.
| Country | Estimated Hash Rate Share (%) |
|---|---|
| United States | 40-45% |
| Kazakhstan | 15-20% |
| China | 5-10% |
| Russia | 5-10% |
| Canada | 5-8% |
| Iran | 3-5% |
| Germany | 2-3% |
| Venezuela | 1-2% |
| Malaysia | 1-2% |
| Other Countries | 10-15% |
As of now, Bitcoin is still banned in Bangladesh. I respectfully urge the government of Bangladesh to reconsider this decision and take the necessary steps to integrate both the people and the government into the emerging Bitcoin economy. Embracing this new frontier could play a crucial role in driving the nation’s growth and prosperity.
It is also the responsibility of every citizen to raise awareness about this restriction and the opportunities that Bitcoin innovation presents. This paradigm shift can offer financial sovereignty to the people of Bangladesh, empowering them to participate in the global digital economy.
My recommendation is for individuals, corporations, and the government to begin accumulating Bitcoin as early as possible. Let us work together to unlock the full potential of Bitcoin and help the nation thrive in this new era of financial technology.