Analyzing the existence and rationality of bitcoin from another angle
Some experts believe that the existence of a thing is united with its rationality, and he also points out that the existence of anything and everything that happens has its necessary reasonable values. As far as some things are concerned, as long as we are not limited by the times or rethinking them in a macroscopic historical perspective, we can understand more clearly the true value of them.
When Bitcoin just appeared, in addition to the pursuit of technical geeks and the support of liberals, more people think that it will collapse like a Ponzi scheme. Today, after nearly a decade of ups and downs, the price of Bitcoin is rising high. What is supporting its value?
This starts with the life of Bitcoin: the mysterious founder of Bitcoin, Nakamoto Satoshi, wrote in the Bitcoin Creation Zone: " The Times 03/Jan/2009 Chancellor on brink of second bailout for banks " This sentence is the headline of the "Times" that day, and the first batch of 50 bitcoins was officially born on this day. This year is the second year of the global financial crisis. www.fmz.com
Nakamoto refers to this sentence as a sarcasm, but also points out the historical background and significance of Bitcoin, that is, to solve the root cause problem of financial crisis by establishing a p2p electronic cash system that is not controlled by the central bank and any financial institution. We know that the currency is issued by a centralized organization, endorsed by national credit, and becomes a weapon to stimulate economic growth when the economy is down or the growth is weak. Once the issuance of money exceeds the economic growth value of a country or region, it will cause excessive growth, which in turn will cause inflation. These third-party credit intermediaries like financial institutions act as accomplices in economic inflation and debt crises.
There were a report that someone put 1200 yuan in the bank 44 years ago (1973). After 44 years, the capital and interest was only 2,684.04 yuan, which was just for a good meal. And the 1,200 yuan by house price, at least equivalent to the current 300,000, which can built a house 44 years ago. The value of 1,200 yuan has changed from a building to a meal. The difference between the two is eaten by inflation, and wealth is diluted by the currency.
The reason why the total amount of Bitcoin is limited to 21 million is to avoid money over issue and inflation with a fixed amount, and to guarantee the appreciation space to a certain extent. Then, whether the fixed amount will cause deflation, is also the question of whether Bitcoin can become a mainstream currency. In this regard, two schools of economists hold different views. www.fmz.com
The Keynesian school, which believes in state intervention, believes that the government should actively regulate the total amount of money and use monetary policy to fuel or brake the economy in a timely manner. The fixed amount of sacrifice at the expense of regulation will inevitably lead to deflation and damage to the overall economy. The Austrian school that believes in liberalism believes that the government's intervention in money is as small as possible. Freedom creates trade, and trade creates wealth. As for the deflation caused by the fixed amount of money, it is not a big problem.
The Austrian economists also pointed out that deflation or expansion is not necessarily related to the total amount of money, mainly depending on whether the overall price level is rising or falling. From the perspective of the distribution mechanism of Bitcoin, its monetary aggregate growth rate will be much lower than the growth rate of social wealth, which also provides important support for the long-term value of Bitcoin.
However, the conditions for Bitcoin to become a mainstream currency are not yet mature. Bitcoin's currency has a large fluctuation, and this unstable currency price will cause great obstacles in actual circulation. How to solve this problem? It may be necessary to develop a complete set of market mechanisms and corresponding policies to maintain the stability of the currency price, which certainly does not match the decentralization concept of Bitcoin. Or, as time goes by, the number of users who accept and use Bitcoin reaches a certain size, and sufficient liquidity and market depth will naturally solve this problem.
For the value of Bitcoin, World Monetary Fund CEO Lagarde has a positive attitude towards Bitcoin. He believes that it may not be wise to keep virtual currency out of the door. They are in many ways better than the existing currency and central bank policies. Many of the technical challenges of virtual currency may be overcome, and some economies may use more virtual currency. Virtual currency may subvert traditional banking services and central bank regulation. www.fmz.com
Today, Venezuela is also the first country to make virtual currency a legal currency. Venezuela issued oil coins based on its own oil resources in order to get rid of inflation and revive the domestic economy. We affirm its courage in practice in the economic field, but the effect is hard to say. From the current point of view, the oil coin has not been recognized by the majority of investors, and the people of this country don’t buy it yet.
The root cause is that the oil coins are still centralized, relying on authority distribution, and there is great policy instability. In my opinion, Bitcoin is completely transparent, managed by reliable and preset rules, and monitored by program algorithms, and only this kind of virtual currency can be truly accepted by the market.
Of course, the value of Bitcoin depends on its traffic in the market, but it will take a long time for Bitcoin to become a mainstream currency, and it will take a long time to be tested by market. The value of Bitcoin lies in its representation of blockchain technology. As a trusting institution, it can build a decentralized system. It will bring about a new economic system, which will lead to the formation of an ideal society of free collaboration.
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