Let’s talk about the future. The future is not decreed. The future is built. And it is built with flesh and blood human beings. That is to say, we can’t talk about the future of money without talking about demographics, productivity and everything else.
Money is something we use every day, but do we really know what it is? Is it a piece of paper with the face of an important gentleman? Is it a number on a bank screen? Is it a digital currency that no one controls? Well, the answer is that money is all of that and more. Money allows us to compare the price of a kilo of tomatoes with that of a liter of gasoline, or that of an hour of work with that of a movie ticket. But money is not something fixed or immutable. Money is a social convention, a collective agreement between the people who use it. Money has value because we give it to them, because we trust that others will accept and respect it. But that confidence can vary or be broken, and with it the value of money.
ANDhe value of money depends on many factors, such as supply, demand, production or the number of participants. What will happen to money if the population shrinks and produces less? What will happen to money if we are left alone on an island with nothing to buy?
If you want to know what will happen to Bitcoin in the future, it is not enough to look at the charts or the news. You have to also look at people. Because? Because people are the ones who use, buy, sell and mine Bitcoin. AND people change over time. They change in number, in age, in education, in work, in income, in preferences. All these changes affect the economy and Bitcoin. That is why it is important to study demography, which is the science that analyzes how human populations are and how they evolve. Demographics, in the context of forecasts, help us understand how the labor market, productivity growth, and demand for goods and services relate to the price of Bitcoin. Demographics help us predict the future of money. Well, at least to try. Because the future, as we know, is uncertain and Bitcoin is, well, pretty unpredictable.
Society is full of myths. That is, people believe in many things that are not true. That’s not surprising. We cannot deny it. One of those myths is the one that says that immigration is bad for the economy, because it lowers wages or takes away jobs from the natives. The truth is that, generally speaking, Migration is beneficial for both countries of origin and destination, as it increases productivity, diversity and well-being. How do we know? By the evidence. Politicians and the press say one thing. But the evidence says otherwise. The public, however, believes the former and mistrusts the latter.
Now, in many countries, in the United States and Europe, nationalist populism has fostered an anti-immigration movement. That, sooner or later, will have a negative impact on the economy.
First, because it reduces the supply of labor, especially young, qualified and flexible workers, who are the ones that are most in demand on the market.
Second, because it reduces the demand for goods and services, since immigrants also consume and pay taxes.
Third, because it reduces innovation and competitiveness, since immigrants bring ideas, talents and cultural diversity.
Fourth, because it generates social and political conflicts, which affect the stability and confidence of economic agents.
Fifth, because it contradicts the principles of freedom, equality and solidarity, which are the ones that sustain economic and social progress.
In other words, the anti-immigration movement is a threat to the development and well-being of the countries that promote it. It is an irrational and selfish decision, based on fear and prejudice, and not on evidence and analysis. Of course it is important to take all this into consideration when making forecasts about the future. And, especially, around forecasts about the future of money.
Now, on the other hand, we have the aging of the population. Let us remember that the baby boomers are more than the millennials. And Bitcoin is essentially a phenomenon millennial. The aging of the population is a phenomenon that affects many countries, especially the United States and Europe. It is that there are more and more older people and fewer young people. This has several disadvantages for the economy.
Less workers: when the population ages, there are fewer people of working age and more people who are retired. This means that there is less supply of labor and less production of goods and services. It also means that there are fewer contributors and more recipients of pensions and social security.
Less consumption: when the population ages, their consumption habits also change. Older people tend to spend less than younger people, because they have less income and fewer needs. This means that there is less demand for goods and services and less economic dynamism. And less investment in risky assets. That last thing is important!
Less innovation: when the population ages, the ability to innovate and adapt to technological changes is also reduced. Older people tend to be more conservative and resistant to change than younger people. This means that there is less creativity and competitiveness in the economy.
More public spending: When the population ages, public spending on health, education, and social assistance also increases. Older people often require more health care and more public services than younger people. This means that there is more fiscal pressure and more public deficit.
We can affirm, then, thathe anti-immigration movement and the aging of the population are two major obstacles to economic and social growth in developed countries. These trends, if they continue like this, can cloud our future and make us lose opportunities and competitiveness. It would be a mistake to turn a blind eye and deny reality.
We need to include these challenges with intelligence, solidarity and a sense of humor in our forecasts. Our expectations must be rational and sensible. Are demographic changes important? Of course.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
It may interest you: