As the world becomes increasingly uncertain, the risk of #BTC is decreasing. Bitcoin halving in 14 days, let's have some chicken soup
There are less than 2000 blocks left until the Bitcoin "halving". I'm here to feed everyone some nutritious chicken soup to strengthen your faith:
⚡️The following content is from: Gu Heng excerpts:
1️⃣ Is Bitcoin an asset or a currency?
For example, if you have 5 million RMB, you can buy 750,000 USD, or 25 bitcoins, or a house. The house is an asset, that's no problem. The USD is a currency, that's also no problem. What about Bitcoin? Is it more like USD or more like a house?
If you don't use your brain and just use common sense to judge, the conclusion is very clear: Bitcoin is a currency, not an asset. So why do so many people insist that Bitcoin is an asset and not a currency? It's because of the obsession that "currency must be issued by the government"! However, the history of currency being forcibly issued by the government is only about two hundred years. Why do you consider something with such a short history as a matter of course?
2️⃣ Is Bitcoin over-issued?
For example, Big Pillar and Second Bolt partnered to open a braised goose shop. They used to braise 100 geese a day. Later, they had a quarrel and changed it to Big Pillar braising 100 geese and Second Bolt braising 100 ducks, using the same braising recipe. Has the supply of geese in the braised goose shop increased?
3️⃣ The high transaction cost, slow speed, and cumbersome procedures of Bitcoin are its advantages, not disadvantages.
Because Bitcoin was invented to counter the hegemony of fiat currency, not to replace fiat currency. In other words, from the first day, Bitcoin only assumes the value storage function of currency, and the other two functions - as a unit of account and medium of exchange - were not its purpose. Because Bitcoin is difficult to trade, everyone has automatically formed a consensus that Bitcoin equals the sum of all fiat currencies and all other numerical currencies.
4️⃣ Is the value of fiat currency based on user consensus? No!
We use fiat currency for only one reason: government enforcement. For example, in 1933, the Roosevelt government declared it illegal for the public to hold gold and required it to be sold to the government at a price of $26 per ounce, and banned the circulation of private gold and silver coins. After confiscating all private gold, the US government immediately set the exchange rate at $35 per ounce. Selling at $26 and buying at $35. Is this trade based on consensus between you and the government? No, it's purely enforced!
5️⃣ If Bitcoin is only for countering hegemony, isn't buying gold the same?
In theory, yes. Since the collapse of the Bretton Woods system in 1971, the US dollar has inflated from $700 billion to $5.8 trillion, an inflation of over 80 times. Gold, which was $35 per ounce, has risen to nearly $2000 per ounce, an inflation of 54 times. It has shown very good synchronicity. However, gold has three problems:
First, it is mostly in the hands of the government and is highly controlled.
Second, it has completely lost its trading scenario. If there is chaos, taking a gold nugget to the street not only won't get you food, but it's likely to cost your life, just look at Venezuela to understand.
Third, and most importantly, in terms of value storage, for the generation that grew up in the internet, it's unimaginable to leave a gold bar under the pillow for their children, just look at the internet fiction, everyone already has 1000 bitcoins on their USB drive at the last moment.
6️⃣ Conclusion:
The current market value of gold is $20 trillion, and Bitcoin is $1 trillion. From a theoretical perspective, I see no reason why Bitcoin cannot surpass gold.
Of course, things that make sense in theory may not necessarily be realized. So I'm not predicting that Bitcoin will definitely surpass gold. What I mean is, under the conditions of the internet, with gold mostly in the hands of the government, as a tool for value storage, Bitcoin is far more promising and secure than gold. It's not so much that I like Bitcoin, but rather that I am more disgusted with the government's excessive issuance of paper currency. The claim that "Bitcoin is not a currency because it's too volatile" is just as foolish as saying "Toyota can kill people, so Nissan is better".
Comparing Bitcoin to tulips is also absurd. The speculation in tulips was based on the gold standard, and the bubble was caused by speculation under the premise of a constant total currency. Bitcoin, on the other hand, is a product of the excessive issuance of global fiat currencies. Fiat currency is the bubble, and Bitcoin is the needle that bursts the bubble. How can you turn the tables?
The recent surge from $10,000 to $40,000 and even up to $60,000, reportedly causing 880% of people in the currency circle to lose money, is due to blind leverage and speculation. If you like gambling so much, you should go trade something else, and after making money, buy a Bitcoin to hide away.
So, what are your gospels? I think you can consider these books:
Friedman's "Monetary History of the United States"
Hayek's "The Denationalization of Money"
Hiroshi's "World History of Monetary Systems"
⚡️The following content is from @taoshenga19
1️⃣ Bitcoin is similar to a social creature, replicating DNA. The more it replicates, the more it spreads, the more decentralized it becomes, and the stronger its vitality. Whether it's miners, Bitcoin holders, or Bitcoin developers, everyone is consistent due to Bitcoin's incentive mechanism and its success.
Humans first tried to use metal currency, then legal currency, and then we invented computers, used networks, and improved cryptography.
So, once we have completed these three things - computers, networks, and cryptography - you have all the components needed to create an encrypted asset network, and that's Bitcoin.
2️⃣ Bitcoin is a shared, unchangeable, and correct ledger system. From the first day of Bitcoin's birth, the above requirements have been embedded in Bitcoin's protocol, and 21 million bitcoins are also stipulated in the protocol.
The second important part of the Bitcoin protocol is the proof-of-work security model, which ensures the immutability and correctness of Bitcoin.
The third part of the Bitcoin protocol is the balance of power between miners, nodes, and wallets (holders). Miners are originally nodes, but distributed nodes themselves also restrict the power of miners.
3️⃣ Inflation can destroy gold and fiat currency, but Bitcoin has no inflation, with a total of 21 million coins. 1BTC=1BTC, and the quantity of Bitcoin is mathematically correct, guaranteed by the basic protocol and proof of work of Bitcoin.
Difficult to confiscate, based on cryptographic private keys, the strongest property rights in human history, the most difficult property to be deprived of is Bitcoin.
Fiat currency, real estate, gold, and land all have trading counterparts and are easily confiscated. Real estate and land are also easily taxed. Securities such as stocks and bonds are derivatives of fiat currency and are affected by fiat currency inflation, with trading counterparts and are easily frozen. Technically, Bitcoin is the most difficult to tax, confiscate, devalue, and the most difficult asset to be seized.
Property rights are the exclusive relationship between the asset owner and the asset, and historically, it has always required the government to certify and protect property rights as a third party. Bitcoin is a self-protecting property right that does not require government enforcement and is independent of the government.
Bitcoin can change the economic logic of violence. In the event of a war between countries, you can seize the other country's land, gold, and factories, but it's difficult to seize the other party's Bitcoin, which leaves room for negotiation. You can use Bitcoin's multi-signature to make a will, and the inheritor of the assets dare not do anything to you.
Efficient property rights certification. If you purchase real estate or land, you need to spend time to certify the property rights and confirm the legality of transferring the property rights to your name. However, Bitcoin uses encryption technology to solve the certification problem, and the person holding the private key is the holder of Bitcoin, and the certification speed is very fast.
Rapid mobility across political jurisdictions. You can transfer $1 million worth of BTC to any place with network access globally, without being restricted by political jurisdictions. It's very difficult to transfer $1 million worth of fiat currency to certain political jurisdictions and requires a bank as a trading counterpart. It's even more difficult to transfer $1 million worth of gold, and it's almost impossible in many political jurisdictions.
Bitcoin can be subdivided almost infinitely, but it's difficult to divide gold, and fiat currency can be divided, but there is also a minimum unit. There is a lot of fraudulent emails or spam on the internet, and using economic proof, you can charge a few cents for each email or DM message, reducing a large amount of network spam, integrating Bitcoin into every network transaction, without going through a bank or credit card company, and purifying the online space.
4️⃣ The Bitcoin network has collapsed accountants, auditors, information technology, human resources functions, security functions, police forces, armies, and politics into the Bitcoin network.
For a listed company, it needs to close its accounts every quarter, and professional accountants are needed to do this, and auditors are needed to audit the accounts before they can be made public, and the auditing process requires human intervention and is very costly. Bitcoin automatically closes its accounts every 10 minutes, and after 1 hour, it becomes irreversible after 6 blocks.
Banks need to expend a lot of effort to ensure compliance in transactions, and once compliance issues arise, the losses can be huge. Bitcoin solves the compliance issue as its nodes verify compliance, and compliance verification comes from distributed mining nodes, without the need for human intervention. Bank compliance requires a large investment of manpower to check every transaction, and a large number of fraudulent transactions pass compliance checks.
Banks need information technology to build a large number of centralized servers and data centers. Bitcoin's infrastructure is mining equipment, which is completely decentralized, self-repairing, and self-eliminating. The centralized facilities of banks require a large investment and regular proactive equipment updates, or they will be eliminated.
Banks also need a human resources department for a large amount of staff training, onboarding, and offboarding. Bitcoin does not require a human resources department; the operation of the Bitcoin network does not require human intervention. Bitcoin materializes human factors, becoming a protocol and decentralized mining hardware.
The Bitcoin network is self-repairing and self-upgrading. If you run a node and do not upgrade the protocol, you will be squeezed out of the network. If you are a miner and do not upgrade your equipment, you will not be able to mine Bitcoin and earn money, and you will be eliminated from the Bitcoin network. In the world of fiat currency banks, all of this requires human intervention.
In the banking system, security is paramount and requires hiring a large number of security personnel, building secure information systems, and implementing secure processes. Bitcoin's security is built into the protocol of the distributed network and is inherent.
To make traditional banks more secure, a police force is needed to maintain security. If you have $1 million in a bank, a police force is needed to ensure the bank's security, otherwise your money may be stolen. Bitcoin does not need a police force to ensure security; Bitcoin's security may come from miners in Iceland or from miners in a country in Central Asia. Bitcoin is even safer than your physical person. If someone wants to steal it, all you need to do is not tell them your private key, and they will be helpless against you. The separation of assets and security is a huge advantage of Bitcoin.
Bitcoin is anti-violence. In a certain political jurisdiction, if 100 people each have $1 million worth of gold, game theory dictates that the brutal will kill them all and then take their gold, because it's difficult to take gold out of this jurisdiction and there's nowhere to escape. If 100 people each have $1 million worth of Bitcoin, as long as 1-2 people are detained, the others will find a way to leave the political jurisdiction, and it's easy to carry Bitcoin.
Every country has its own fiat currency system, and to maintain the stability of the fiat currency system, a military force is needed. Sometimes, wars need to be waged to ensure the security of property. Bitcoin is a multi-country network, and you basically cannot find all miners in one place. The operation of the Bitcoin network is unrelated to political jurisdictions.
5️⃣ Bitcoin's proof of work: I have done a lot of work, generated a lot of hash values, solved Bitcoin's security issues, and my work will be rewarded. Bitcoin miners earn rewards through their honest work.
As more and more miners join, the hash rate will increase, and the difficulty will rise. The foundation of Bitcoin is capitalism, and the foundation of capitalism is natural competition. Difficulty adjustment is a natural phenomenon; in nature, all animals and plants need to obtain energy from the ecosystem. Trees need to grow tall to get more sunlight, predators need to capture prey, and weak predators will starve if they cannot capture prey, just as short giraffes will starve if they cannot reach the leaves. This is all a form of difficulty adjustment, continuous feedback, evolution, and survival of the fittest.
The difficulty adjustment of Bitcoin's proof of work system is an adaptive control system, and its goal is to ensure the correctness of the ledger. Fiat currency is not, and neither is gold. No one can know how many dollars there are in the world, but we know how many bitcoins there are in the world.
Bitcoin's design is very wonderful:
The protocol stipulates that there are only 21 million coins, which is honest mathematically.
Proof of work is honest work, open and competitive. Anyone, anywhere, can run a proof of work algorithm to earn rewards. It is an open and free system; you can join and leave at any time without anyone's permission to run a proof of work algorithm.
Fiat currency is like animals in a zoo, without competition. Bitcoin is like wild animals, competing for survival in an open environment. Bitcoin passes on its DNA through code and is an organism with its own vitality.
【Investment Must-Read: The Real Logic of Today's World: Raising Interest Rates is Temporary, Easing is Eternal】 Why have I always emphasized the need to bravely buy #Bitcoin, to see its long-term market and permanent value, especially at the current price, to discard fear and move forward bravely? Here are five points:
1️⃣ Easing is eternal
I mentioned this in the title. In today's world, is it possible not to overissue currency or not to stimulate the economy? The Russia-Ukraine war, China's economic issues, the deviation of the Japanese yen exchange rate, even if Americans want high welfare, Biden probably can't sit still without overissuing currency. So overissuance is the main theme, and easing is eternal. For those who do not understand this, you can take a look at the "Financial Code of the Central Empire" that I recommended some time ago.
2️⃣ Bitcoin's value storage characteristics
I'm talking about the essence here. Everyone knows that Bitcoin is currently a game for the rich, even in the currency circle, those who own Bitcoin are very few. Most people are speculating on altcoins, hoping to get rich overnight. So here's a characteristic: when you buy altcoins, and when you buy stocks, the essence is the same, both are for buying low and selling high, for making money. But the purchase of Bitcoin, as mentioned earlier, is a game for the rich. Most rich people who buy Bitcoin are not for appreciation; their goal is for preservation and inheritance, so they will not sell. About this point, I will not accept any rebuttal, because I have encountered too many rich people who have expressed this need to me, and there will be more in the future.
3️⃣ War and international situation have a huge impact
The Russia-Ukraine war may not last long. But the changes and impact brought about by the Russia-Ukraine war worldwide are huge.
The Russia-Ukraine war will completely change people's wealth concepts, especially the world's top billionaires, especially the rich in China and Russia. Russia faces sanctions from the United States and Europe, and China is being foolishly kidnapped.
In addition to these people, do you think the situation will be good for the rich in European and other countries? The rich in Europe and the United States and other countries, due to the stock market's big drop and the strangulation of futures and index futures caused by the war, have made many middle-class people cry.
The biggest impact of a war on the world situation is that it makes all the rich and middle class in the world start to re-examine their asset allocation. How to better protect their private property from infringement.
4️⃣ Ideological disputes
Ideologically, China is moving towards a more obvious "socialist road," even abandoning some of the successes of reform and opening up, and taking a step back. This will make the Western world wary of China, and even impose economic sanctions. It will be difficult for the rich; China's nature is to target the rich, such as strange things like "common prosperity," which is essentially "killing the rich to help the poor" to seize the capital of "national progress and people's retreat."
Many people will see that once there is a war or global sanctions, it will inevitably bring about an economic crisis, and the money in their hands will turn into paper. This is obvious, so they must find a "safe haven." Many "rich" friends suddenly came to me for advice on Bitcoin this year. Regardless of how these "friends" found me, they all have one goal: they hope to preserve and pass on their assets through Bitcoin as much as possible.
Conclusion
The eternal nature of easing, Bitcoin's value storage characteristics, war and ideological disputes will take this world onto another track. The rich and middle class will gradually awaken and start to re-examine their asset allocation, and how to better protect their private property from infringement.
Once everyone starts to think about this issue carefully, they will collectively focus on one place, and that is only: #BTC
The logic of the rise is very clear, as I have always said, the decline of #Bitcoin presents us with the best opportunity of our generation. Holding onto BTC may be the most meaningful thing you do in your lifetime. That's all!
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