Author: Liu Jiaolian
Overnight BTC continued to recover to the 56-57k range. In the past 9 months of 2024, the average cost of adding positions is about 63.5k, and now the floating loss is 10%. Looking back, the three instantaneous lows of 53k on 7/5, 49k on 8/5, and 52.5k on 9/7 just passed are the three precise bottom-picking points since this year. I wonder how many immortal hands can catch this flashing moment every time, and how big a position can be caught if caught? I'm afraid it's not easy.
For all BTC traders in the world, from the perspective of fiat currency, it is a negative-sum game. The general formula is as follows:
The amount of fiat currency invested by the buyer - the amount of fiat currency taken by the seller = the handling fee deducted by the trading platform + the mining income earned by the miners
Here we are talking about the issue of fiat currency cash flow and direction. From this perspective, floating profit is not considered a win, and floating loss is not considered a loss, because they have not yet completed the entire closed loop from buying to selling.
As a buyer, you invest in fiat currency and get BTC. No matter what the trading motivation is, long-term holding or short-term speculation, at the moment of the transaction, the fiat currency has already flowed into the hands of another person.
The objects of the net inflow of fiat currency are trading platforms and miners.
In the end, if long-term holders are making money, trading platforms are making money, and miners are also making money, then the people who provide a steady stream of profits to these three are and can only be the endless group of traders. They burned their own capital and illuminated the entire market. Individual examples of getting rich quickly attracted them to move forward like moths to a flame. The sweetness of small wins continued to enrich their self-confidence and made them lose themselves. Big bets and big losses made them blame luck and vowed to start over.
From a higher dimension, hoarders who hold but do not sell do not earn fiat currency from the system. They are real investors. Traders and trading platforms are just tools that provide liquidity and channels to help investors invest capital in miners who build and maintain system infrastructure (computing power).
The production of BTC, that is, mining, adopts the so-called proof-of-work (PoW) mechanism. This mechanism uses special chips to perform a large number of calculations 24 hours a day, consuming huge amounts of electricity.
Even if we put aside the debate about whether BTC is useful, just looking at this very green and environmentally friendly production process, it has a very beneficial use: driving infrastructure development on the power supply side.
Yesterday, Russian President Vladimir Putin said in a speech at the Eastern Economic Forum that Russia has become one of the world leaders in BTC mining. Putin believes that mining can utilize excess energy in Siberia and other regions.
Compared with the electricity demand of traditional industries, factories usually choose to build near the sea because they need to consider the transportation cost of products. In this way, they must stay away from green electricity, such as the northwest and southwest where wind power, hydropower, and photovoltaic power are abundant.
The green electricity distributed in the vast western region has low density and scattered distribution. The cost of transmission line construction is high, which leads to the frequent loss-making operation of green electricity projects. The national strategy requires the vigorous construction and development of these new energy and low-carbon infrastructure projects to boost the relevant industrial chain, employment and economy, which often requires high subsidy costs and the whole people to pay for it.
However, BTC mining factories do not need to be built on the coast, but can be built directly next to these wind power, hydropower and photovoltaic power generation facilities. You only need to connect to the Internet - even wireless network can be used if there is no wired network, and satellite network can be used if there is no wireless network, and you can access the BTC global network to carry out mining work and immediately convert green energy into economic benefits nearby.
This not only greatly saves the uneconomical investment of investing huge sums of money to build a transmission network just to cover sparse power generation facilities, but also greatly saves the huge subsidies invested by the state for green energy and low-carbon development. It can even make these green power projects that originally could not pay back for N years quickly turn losses into profits, and promote the faster development of low-carbon energy infrastructure construction by relying on the power of capital returns rather than the power of state investment.
In this sense, what BTC investors invest in is actually the future energy cause of mankind. Low-carbon energy, green energy, and even controlled nuclear fusion, etc., the next generation of new energy, the next generation of new energy.
Today, people can say that BTC cannot be eaten, worn, or bought anything, and it is useless. However, the "capital allocation ability" of the BTC network to accurately, efficiently, and automatically allocate the capital of global investors to the latest energy development track is already the supreme value.
Everyone who has invested understands that the greatest value of investment is to seek the optimization of capital allocation. Anyone who knows the history of human development knows that the real underlying factor that determines the course of human history is energy - so much so that the Kardashev Index directly uses energy utilization as the only parameter to measure the level of human civilization and cosmic civilization.
BTC solves the above two major problems at once - automated capital allocation and human energy upgrades - even if the final solution to the third problem - value-preserving currency - is controversial, do you think its value is already great times great - great to the second power? If all three problems are solved by BTC, then is it great to the third power?
So, the use of the useless is the greatest use.
The 3A game masterpiece "Black Myth: Wukong" that has recently become popular all over the world is similar.
Many people criticize playing games for being "useless", a waste of time, a waste of productivity, and various criticisms. However, why can't China's graphics card chip technology develop? Why doesn't China have Nvidia? Is it related to our consistent contempt for games? You should know that the motivation for Nvidia to make graphics cards in the early days was driven by the demand for video games, especially 3D animation games that require a lot of computing power to render.
Playing video games may seem useless, but it provides demand and profits for graphics card production, greatly driving the development of the graphics card chip industry.
Mining may seem useless, but it also drives the development of graphics cards. That's right, Nvidia's second wave of development dividends was driven by Ethereum's early years of using graphics cards for mining.
The third wave of graphics card development is the AI big model that is now in full swing.
Video games - virtual currency mining - AI big model, a three-stage rocket, pushed Nvidia to an unprecedented height, with a market value of 2.6 trillion US dollars, and the top three technology stocks (second only to Apple and Microsoft).
Now the national strategy is to develop AI, and if it doesn't want to be strangled by the United States, it needs to incubate China's Nvidia. Relying on subsidies is not only expensive, but it is also easy to make up for the "Hanxin" that is fraudulent and corrupt. We must use the power of the market to achieve speed, quality and economy.
So we have to start with video games.
The development of things has its own mysterious laws. Just because you are full after eating the third steamed bun does not mean that the first and second steamed buns are useless.
The first two steamed buns that seem useless actually have a big effect. It is impossible to eat only the third steamed bun to be full. It is narrow-minded and short-sighted to limit your vision and thinking to a single steamed bun.
You have to start from the first steamed bun that seems useless.
JinseFinance
Bitcoinist