If you could explain Bitcoin to Einstein, what would you say?

Einstein was smart, inquisitive, and deeply philosophical so he would quickly understand the long-term implications of Bitcoin on economics, society, and culture.  To Einstein, I would say:

Money is a thread that weaves through society, providing a way for one human to give value to another value. Whether expressed as rare elements, spices, beads, or gold, humans find a commonly accepted thing to use for value exchange and storing value into the future. For thousands of years, money systems worked when the supply was limited but fell apart when the underlying asset was quickly inflated (there are many examples of this throughout history).  With a hard monetary asset, people are incentivized to save for the future as they will have more spending power. With an asset that loses value, they are incentivized to spend today as they will have less spending power in the future. This in part has given rise to increased “consumerism” in today’s culture.

The current global monetary system is based on the US Dollar, but the structure of the USD changed over time and continues to change. The original USD was backed by gold, widely seen as hard money. Hard money means it is difficult to expand the supply of gold without significant real-world investment. There is no way to artificially produce gold. At points in time, the structure and linkage to gold was changed, ultimately in 1971 when the United States fully went off the gold standard. From that point forward, the US government had the ability to unilaterally expand the money supply to fund government expenditures for social services and increasingly military actions across the globe. This massive increase of money supply (sometimes casually referred to as “printing money” even though most money is created digitally) has the effect of decreasing purchasing power (sometimes called “inflation”). People saving in US Dollars and all the assets linked to USD inherently realize they are losing ground due to the increasing money supply.

One of Bitcoin’s core properties is a fixed and well-understood schedule of monetary expansion. The entire system is capped at 21 million Bitcoin (which can be further divided) and that supply is incrementally released into the world in steadily decreasing amounts. The rate of inflation of Bitcoin decreases every four years. Bitcoin is soon to be a harder asset than even gold — Bitcoin is now the most resilient, inflation-proof asset the world has known. It is important to note that this might not be true in a given week, month, or year, but is true over any multi-year period.

To summarize, Bitcoin is a new monetary asset that mimicked many good properties of gold. It incentivizes long-term thinking, savings, and value creation.