Understand Bitcoin. Playfully.

Game Interaction No. 1: The problem with fiat currencies

The main issue with conventional currencies like the USD, EUR, GBP, JPY, CHF, etc. (also known as fiat currencies) comes from a combination of characteristics that necessitate a strong trust in governments and banks:

  1. ๐Ÿ›‘ Since 1971, every official currency in the world is no longer backed by gold and can be "printed" at will.
  2. ๐Ÿ‘‘ Governments exert full control over the currency.
  3. ๐Ÿ’ธ There's virtually no cost in producing more of it.
  4. โ™พ๏ธ No limit exists to how much can be created.
  5. ๐Ÿฆ In addition, banks can lend out more money than they hold in reserves.

These traits allow for easy creation of new money and credit, almost as simple as clicking a button. Banks lend out money far beyond their reserves, creating waves of credit bubbles to increase profits. Governments, in turn, print more money to cover these bubbles and "stimulate" the economy. The result is a dangerous cycle that puts more and more money into circulation, leading to instability and a steady loss of value, as the currency becomes less scarce. This loss of value is called inflation.

Let's see if you can create money as easily and as fast as governments and banks can. Are you ready?