The value of Bitcoin

Author: Cai Leilei Source: Please debate

Bitcoin has recently hit a record high. If nothing unexpected happens, it may often be in a state of "historical high again". Many people in the background also want me to talk about Bitcoin. Well, given that a large number of people have received wrong information from some unprofessional media before, I will talk about Bitcoin again.

These two days, CCTV talked about the new high of Bitcoin and said that the next president, Mr. Trump, is ready to make the United States a cryptocurrency capital and establish a national strategic reserve of Bitcoin. CCTV's talk about this matter itself has no effect on Bitcoin. Since its birth, Bitcoin has been a natural enemy of centralized legal currency and is naturally contrary to the power of the government. It has suffered a lot of blows, slander, and sanctions. Therefore, the long-term market of Bitcoin has always relied on itself and is only related to its own development. It has nothing to do with "Which government recognizes it or not". It's just that CCTV's news has conveyed a message to some Chinese people who don't know the truth, that is, this thing is not a pyramid scheme, a scam, or something illegal as many low-IQ people think - after all, except for a very few countries in the world, everyone recognizes it, so it doesn't really matter whether these very few countries recognize it or not.

We all know that the most important attribute of "assets" is "recognition by others". Think about it carefully, is it true? Many things are recognized by the country and the government, but others do not recognize them. No one takes them. Can you say it is an asset? No. For example, some elderly people in rural areas have earned hundreds of thousands of yuan in their lifetime and bought a rural house in the mountains. Is it an asset? No, when the next round of urbanization begins, the ravines will slowly become ruins, people will leave, infrastructure will be dilapidated, and the quality of life of the remaining people will drop rapidly, and then these hundreds of thousands of dollars will be wasted - To put it bluntly, if the next person is willing to take over this pile of steel and concrete, it will be no different from a pile of shit on the side of the road, and their hard work in this life will be in vain.

So even if the Chinese government "doesn't like" Bitcoin - note that it doesn't like it, not that it doesn't recognize it. If you don't believe it, go and cheat some Bitcoin from others. Will the judge treat it as game currency and sentence you? - Even if the Chinese government doesn't like it, even if all Chinese people don't like it, as long as Americans, British, Japanese, and Koreans like it, it is valuable, otherwise Kim Jong-un wouldn't have to organize a hacker team to steal it, and the Chinese government wouldn't have to hold so many coins and not sell them.

Of course, governments naturally don't like Bitcoin, which can't be printed whenever they want. The governments on the earth that "like" it are all because they have tried to suppress it, failed and admitted failure, and in order to please a large number of holders, they "have to like" it - after all, if you don't like it, other governments can attract a large number of people and money by "liking" it. They are just trapped in a prisoner's dilemma, so they have to support it. Therefore, Bitcoin is a deterministic trend. Any attempt to obstruct it will only lead to lagging behind due to late opening and late support. In addition to making yourself worse, it will not change any of its development process.

So where is the value of Bitcoin? Is it just a simple consensus? First of all, consensus itself is a kind of value. Trump's presidency is the product of consensus. Almost all valuable things in our real life come from consensus - that is, if you hold this asset, it can still be regarded as the essence of an asset because you judge that other people also want to own it. Otherwise, whether it is gold or a house, it is no different from shit.

But there must be a reason behind the consensus, why Bitcoin instead of a leaf or a stone? Including gold, in the process of gathering a large amount of consensus, it also experienced some competition, and people eventually found that shells can be picked up everywhere, fish is not easy to preserve, copper is too much, and the cost of obtaining some things is too low, etc. In the end, gold did not win because of propaganda and brainwashing, but because its own characteristics defeated other things, so it became people's choice - that is, if a thing is valuable only by brainwashing people, it is not lasting and will soon be abandoned by people. It must be that the thing itself has the characteristics and foundation recognized by people, and then in the long history, people slowly gathered consensus on it, it can only be a spontaneous market behavior.

You can think of Bitcoin as another form of gold. After all, there is nothing better than gold in nature in the gold track, so we create something artificially. After all, gold also has many characteristics that are worth continuing to improve. But artificial creations will lead to a paradox, that is, you can create this thing today, and you can continue to create and print it tomorrow, so who would be willing to use it? So this thing must be the same as gold. Once the upper limit is set after creation, even the creator himself cannot continue to create, and this must be proved mathematically.

So compared to gold, the total upper limit of Bitcoin is more certain, easier to carry, easier to divide, and easier to transmit value - each of its characteristics has been strengthened on the basis of the advantages of gold. It does not need to have other uses, it only needs to be better gold to have the greatest value. Of course, as the world's largest peer-to-peer decentralized value transmission system, Bitcoin itself can also be seen as a share of this system with huge value. For example, if I have multiple identities at the same time, I only need to buy it with RMB, transfer it to my other identity with a click, and then I can easily exchange it for the legal currency of any country I want. All this makes the government's regulatory system and audit system almost meaningless, because its value transmission does not rely on the settlement center established by any government in the world, and it completely empties the government's power. Someone said, aren't there many other currencies? Yes, it's like there is gold, but there is also silver, copper, and iron. But what is the consensus of people? The market has the final say. Bitcoin is the first deterministic cryptocurrency. Without it, there would be no other currencies, and there would be no entire blockchain market, so people's consensus will definitely focus on Bitcoin, rather than other currencies, because "better" is a subjective value orientation, and "first" cannot be changed, so it is the most secure decentralized value transmission network - because of its large market value and high cost, people are more willing to participate in mining it, so its nodes have a higher degree of participation, so its degree of decentralization is also higher, so its system is more secure, so its value as a value transmission system is greater, and so on and so forth, with cause and effect, its dominant position cannot be broken.

So the next time someone says "he can also copy and create another Bitcoin", you know he is an outsider, because he doesn't know the consensus, and how much value Bitcoin has as the world's most secure and decentralized peer-to-peer value transfer system - other things you create, even if the initial features are exactly the same as Bitcoin, but if there is no initial consensus, there will be no system value, no market value, no way to transmit great value, and no consensus - this flywheel cannot turn, so it is worthless and is just pure boring code.

Bitcoin is already one of the top ten assets in the world. Although its total market value is only 1/10 of that of gold, from another perspective, it has gone through thousands of years of gold in just 10 years, which is also amazing.——This process is like this. In the early stage, it may not seem fast enough in the eyes of some people, but when one day Bitcoin really reaches 1/2 of the market value of gold, the subsequent replacement speed will be very fast, because when it can really be entered by big funds and used as reserves by many countries, its characteristics that far exceed gold in all aspects will be seen by everyone——that is, the reason why its market value is climbing slowly now is simply because various channels do not provide it with enough convenience, so its speed of reaching ordinary people is still slow for the time being——compared with the height it should have reached.

And once its market value continues to grow and becomes an asset of the same level as gold, it can get the same attention as gold and the same channel smoothness as gold, then it will quickly surpass gold, that's it.