Why Wealth to Health?

Hindsight, as they say, is 20-20.

I first recall hearing about the Cryptographic foundations of Blockchain and Cryptocurrency in the late 1970s. I believe it was a Scientific American article I was reading (yes, I’ve been a fan of science and technology for many years – here’s the link), and it discussed basic communications between two parties (the oft used “Alice” and “Bob”) using cryptography to guarantee their communications would remain secret to everyone except them, and allow them to also determine if the contents were changed during transmision.

Fast-forward to the 1990s, and there were several scholarly articles written about  topics such as the value of solutions to computational puzzles, proof-of-work, digital scarcity, and more.

Fast-forward again to the 2000s, and Bitcoin was born. (WikiPedia link here)

The Value of Anything

At first, Bitcoin was just a novelty to most people. Tech-savvy people felt it had potential value, and over time it did prove it’s value. But early on, there were plenty of skeptics.

To get a clear understanding of the value of Bitcoin, other currencies, and literally anything, let’s boil it down to a few simple concepts.

1. Value is in the eye of the beholder. Anything, physical or virtual, can have real, long-lasting value so long as someone believes it does. Let’s call these assets.

2. There are several prominent attributes that drive changes in the value of assets. These attributes are:

Liquidity – how easily can an asset be swapped for another asset

Scarcity – is there a limited supply of the asset

Utility – what can the asset be used for

Belief – how many people believe the asset has value

Let’s make a small table showing how Bitcoin, Ethereum, and other assets compare.

Virtual	Liquidity	Scarcity	Utility	Belief
Bitcoin	High	High	Medium	Low
Ethereum	High	High	Medium	Low
Smart Contracts	Low	Low	High	Low
NFTs	Medium	Low	Low	Low
USD	High	Medium	Medium	High
Physical
Gold	Medium	Medium	Medium	Medium
Real Estate	Medium	Low	High	High
Cars	Medium	Low	Medium	High
Artworks	Low	High	Low	Medium

Note that the effect on value of these four attributes is not equivalent and in some ways these attributes are dependent upon each other. Nor is this a comprehensive list of asset types or value attributes.

So what does this tell us about value of assets?

1. Some physical assets, such as Real Estate, tend to have excellent long-term value, espeically since you can live in them, and everyone needs shelter. But since liquidity is medium or low for most physical assets, they’re not very flexible.

2. Virtual assets such as USD tend to have a relatively stable but constantly inflationary value, and lately that has been more evident. Compared to cryptocurrencies USD have high belief, but there are fiat currencies that rapidly become worthless when mis-managed. And cryptocurrencies suffer from low belief.

The Point

Cryptocurrencies and similar blockchain-related assets may for the most part suffer from low belief, particularly when we’re in a down market.

But they do have two primary features that believers hold dear:

1. Decentralization, meaning no single bank, gonverment authority, or other entity has total control over them.

2. Immutability, meaning no one can change the record of transactions in once their blocks are validated.

So while belief is low compared to USD and some physical assets, core believers see these two features as great reasons for holding them.

And if we could create massive wealth, then use a big chunk of that wealth to invest in health, perhaps we could see a much brighter future.

After all, health is central to everything, not just our physical health, but every other aspect of living. That’s why the term health can and is applied to just anything you can think of: “health of the planet”, “mental health”, “financial health”, and so on.

Twistabit is designed to create a new for of blockchain asset called a Smart Coin. Spoiler alert, Twistabit isn’t the only blockchain project using this term. But Twistabit is designed to focus the creation of wealth so that:

1. The wealth benefits all holders in terms of their financial health

2. A big chunk of the wealth created is used to solve pressing problems, primarily human health-related threats

And the way we do this is satify all four of the main attributes for virtual assets.

That’s coming up in my next post!