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Source: Bitcoin Fortress, compiled by Shaw bitchain vision
History is not simply repeated—but it is reproduced in similar forms.As far as currency is concerned, this pattern of reappearance has been quite consistent for thousands of years.From the Roman Dinar to the German paper currency mark, from the French “finger” to the modern dollar, the fiat currency – the government-issued currency with no intrinsic value – follows a predictable life cycle: birth, expansion, depreciation, collapse.
The specific details change – sometimes the currency is initially gold or silver, sometimes paper money supported by precious metals, and sometimes pure digital currency – but the pattern never changes.
Bitcoin has provided a way out for the first time in history.
Four stages of the decline of fiat currency
1. Begin with a steady start
Almost every legal currency was a “hard currency” at its beginning, supported by scarce items.Roman Dinar was originally made in almost sterling silver.The dollar was supported by gold and silver for most of its early history.This restriction prevents the government from spending too much – if you want to print more currencies, you need to mine or get more gold.
2. The temptation of the printing press
As the government expands, its spending increases—wars, public works, welfare, and bureaucracy.As a result, the temptation of printing money “just this time” becomes irresistible.Rome began to cut the purity of coin and incorporate cheap metals.The United States suspended gold exchange during the Civil War, again in 1933, and permanently halted gold exchange during President Nixon’s administration in 1971.
Once the currency is no longer bound by scarcity, politicians will find that deficits can be easily compensated without tax increases.Printing money is politically painless—at least at first.
3. Inflation phase
Since there is no upper limit on the money supply, the money supply has grown faster than the growth rate of goods and services it measures.Prices rise.People began to notice that their purchasing power was gradually declining.Sometimes inflation is gradual, for example, in the United States after 1971, the purchasing power of the dollar has dropped by more than 85%.Other times, inflation accelerates to double or even triple digits per year, like today’s Argentina or Zimbabwe in the early 21st century.
When trust begins to collapse, the circulation of money will accelerate—people consume faster because they fear that waiting will devalue their money in the future.This accelerates the vicious cycle.
4. Crash and restart
In the end, confidence was completely lost.The demise of currency – not necessarily because of hyperinflation, but often because of being replaced.France’s fingertips depreciated by 99% in less than a decade and were eventually abolished.In 1923, hyperinflation made pushing a trolley full of cash a national laughing stock, and German paper marks were replaced by Lent Mark.
This “restart” often returns to some form of commodity support system, or moves to a new type of fiat currency that promises more stringent.But history shows that such a cycle inevitably begins again.
Why fiat currency always fails
The root cause lies in human nature and political motivation.Scarce hard currency can restrain the government, but fiat currencies eliminate these restrictions.Once the ability to create money is no longer bound by a fixed supply, short-term political interests will always overcome long-term stability.
The collapse of fiat currency is not a question of whether it is a question of whether it is, but a question of when.Since records have existed, more than 700 legal currencies have existed, without exception, either collapsed or are heading for collapse.
Bitcoin: A Breakthrough in the Cycle
Bitcoin and fiat currency models are completely different for the following reasons:
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Fixed supply——The total amount of Bitcoin will always be only 21 million, and this rule is guaranteed by decentralized consensus and cryptographic proof, rather than political commitments.
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Decentralization——There is no single agency to control the network, which makes it impossible for the government or central bank to unilaterally devalue the currency.
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transparency——Bitcoin’s ledger is open and auditable to anyone around the world, eliminating the secrets of the central bank’s balance sheet.
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Global accessibility——Anyone with an internet connection can participate, store value and conduct transactions, bypassing capital controls and political boundaries.
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Portability and separability——Unlike gold, Bitcoin transfers are easy to deal with worldwide, and each Bitcoin can be subdivided into 100 million yuan, which makes it suitable for both small transactions and large settlements.
How Bitcoin ends the death cycle of fiat currency
By eliminating the power to issue currencies at will, Bitcoin retakes fiscal discipline.The government or any entity can only use its income, honest borrowing or voluntary funds.Monetary policy has become predictable, eliminating the “invisible tax” that has eroded savings for decades – inflation.
This fundamentally changes the mechanism that leads to a fiat currency crash cycle:
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Endless wars that cannot be supported by printing money——They must be funded by taxes or voluntarily purchased bonds.
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No asset bubble triggered by cheap credit——Interest rates reflect real risks, not manipulation by the central bank.
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No intergenerational theft——Saves can maintain purchasing power for decades.
Inevitable transformation
History tells us that every legal currency has a lifespan.The question is not whether the current global fiat currency system will end, but what will be replaced by.The collapse of the monetary system in the past forced people to accept the new fiat currency system.This time, for the first time in human history, there was another choice: an honest, decentralized, and global currency.
When the fiat cycle changes again – this is bound to happen – those who have turned to Bitcoin will no longer be rushing to find a safe haven.They have long lived in the next currency era.
The final thought
The collapse of the fiat monetary system is its inherent characteristics, not its flaw.Bitcoin is the first currency technology in history to make this cycle an optional one.You can choose to exit – not when a crash comes, but in the present moment.History won’t stop repeating, but you can choose to write different chapters.
This is not financial or legal advice, but is for entertainment only and requires self-research.Hope you find this article useful, helping you plan your personal financial path and build a Bitcoin bastion in 2025.
