PART2: ECONOMY STORY

About 700 years before JC the sovereigns were able to impose the use of money as a means of payment in the form of an object for which they claim exclusive production. And right now the currency is in the form of coins of gold, silver, copper and which served as payment for their soldiers who waged wars conquering new territories.

So to obtain food and equipment, the soldiers imposed by force on the peasants and merchants this currency as payments. Then the power then recovered this currency when collecting taxes. Very quickly, as everyone had to have this currency to pay taxes, it became the new means of debt settlement. Money then saw the light of day. It was accepted as payment and spread throughout the community. The sovereigns could therefore buy food and goods etc. thanks to the money they produced themselves. It was the time of debt bondage.

This explains how the monetary system was created by sovereigns to extort a part of the production of the populations while living well and dressing without making the least effort of work. It is by this principle that empires were built. Historically, barter was only practiced in unstable times of war and crisis when citizens ran out of money. In the Middle Ages, with the development of trade, precious metals like gold and silver have become an international currency. It was risky to own and carry around these precious metals. We risked having them stolen. From the 17th century, merchants began by entrusting their precious metals to goldsmiths. In exchange, these goldsmiths gave them a receipt or a nominative certificate of deposit for proof of deposit of precious metals in their regard, which allows depositors to come and collect their precious metals at any time.

Thus during the withdrawals the latter ask for a small sum for the storage service rendered since they take serious care that these metals are well kept in safe.

By evolving like this, these certificates have become non-nominative. They now carried the weight of the metal they simply represented. So very simple, merchants began to pay themselves not necessarily in precious metals but with these certificates. It was the beginnings of paper money.

Now goldsmiths have found that merchants leave their precious metals lying around in their chests; they had the idea of lending these metals to other merchants so that they could develop their trade. But rather than lending these metals, placed in their safe, they preferred to issue certificates. When they repaid their debt, they returned the certificates and paid interest, these certificates were always destroyed immediately. after payment. The goldsmiths began to print many more certificates than the precious metals available in their vault, to lend them to others and so on.

This practice allowed them to enrich themselves in multiplying the interest received. And like the possibility of exchanging paper money for precious metals was accepted by merchants as payment, goldsmiths could print it for their own needs. So as long as the borrowers and depositors did not all arrive at the same time to request exchanges of their certificate against the equivalent in precious metals, their little magic trick to get rich remained secret. Today these precious metals are replaced by central currencies. With the advent of the republic and democracy, it is indeed the legislative code which drafts the law in the name of the people and the States.

Nations have their own money made by the central bank. The law says that every citizen has an interest in accepting this state currency as debt settlement. It is, however, what makes the currency legal tender. This currency is called fiduciary, from the Latin fiducia which means trust. So the banking system and the monetary policy of the time have come to light and are the result of this little goldsmith's game over time.

In the time of goldsmiths, when merchants paid themselves in precious metals, it is like when today we and merchants pay for our goods and services in the central currency of banknotes. Then when they were paid with certificates, it's like when today, we pay merchants by transfer of scriptural money from our bank account to that of the merchant.

And we must also remember that when goldsmiths made credits, they issued many more certificates of deposit than precious metals available in their vault. When the merchants came to reimburse them, they destroyed these certificates. It's the same thing today with private bank money. When a bank extends credit, it creates scriptural money in an account out of thin air. And it creates far more than it has central currency in those coffers. And when the client to whom she granted the credit manages to repay his credit, she destroys this scriptural money created which was just intended to credit the account of this client. Let's say it's called money creation and money destruction.

As scriptural money is accepted as payment, banks can also create money out of nothing to cover their expenses as they have the possibility of extending credit to themselves. So this monetary policy of central banks and those private whose goal is the interest gives rise to an inflationary economy maintained around 2%. When this inflation manages to exceed the bar of this normality of 2%, the economic system begins to experience stability difficulties such as. Inflation is therefore the cause and the consequences are multiple and drastic. Bitcoin, which wants to be revolutionary in this banking industry, can be the solution to this whole banking maneuver story?

PART1: ECONOMY

Although the economy looks complex, yet it works in a simple and mechanical way. It is partly made up of "TRANSACTIONS". These transactions are above all driven by the social nature of humans. So the economy simply is the sum of the transactions defining human society.

For example, each time you buy something, you create a transaction. Each transaction consists of a buyer exchanging currency or credit with a seller for goods and services or even financial assets. Credit runs like money so by adding the currency spent and the amount of credit spent, you can find out the total amount spent. The total amount of spending keeps the economy going.

It is the building block of the economic machine. All cycles and forces in the economy are determined by transactions. So if we can understand transactions, we can understand the whole economy.

A market is made up of all buyers and all sellers transacting for the same thing. For example, there is a wheat market, an automobile market, a stock market ...in short, markets for millions of things. The economy is made up of all the transactions in all these markets. If you add up the total spend and the total quantity sold in all markets, you have everything you need to know to understand the economy.

So, Individuals, Companies, Banks and Governments all transact in the manner just described. They exchange currency and credit for goods, services and financial assets. The biggest buyers and sellers are governments. Central Governments which collect taxes and spend money and Central Banks which are different from other buyers and sellers because on their part they control money and credit in the economy. They do this by influencing interest rates and printing cash.

For these reasons, as we will see, the central bank is an important player in this economic system. Central banks are important players in the flow of credit.

We are particularly interested in the "credit" component. Credit is the most important part of the economy but probably the least understood. It's the most important part because it's the biggest. just as buyers and sellers come to the market to transact, so to be economic actors, not to say lenders and borrowers.

Lenders usually want to turn their money into extra money better multiplied, and borrowers usually want to buy something they couldn't afford: assets like a house, cars ...or invest in something like creating of business.

Credit can then help lenders and borrowers to carry out their projects. Borrowers promise to repay their amount they borrowed called "main figure" plus a small additional amount called "interest". When central banks, through their policy of reducing inflation, increase interest rates, borrowing decreases because it is costly for households (which often leads to layoffs of staff by companies, reduces global GDP which in turn gives way to unemployment and leads to recession or even depression. When these rates are low, borrowing increases because it is cheaper and favorable to businesses (global economic growth)

The battle between CeFi and DeFi is raging in the cryptocurrency world. While attending a Web3 conference in Hong Kong, Binance CEO Changpeng Zhao did not remain indifferent to the subject.

According to Binance CEO “ CeFi is not against DeFi. DeFi shouldn't be against anyone either.

In a purely decentralized space, everyone would be for themselves. When you form projects and initiatives, that is centralization. There will always be pockets of centralization, even within the decentralized space . »

And so “ CeFi and DeFi have different risk and security characteristics. We should not take a one-sided view that one is better than the other .”

You don't invest in Bitcoin, you save in it.

Understand how Bitcoin is deflationary.

▶️In February 2009, is published on the P2P site foundation and under the name of use of Satoshi Nakamoto", the announcement of work done on a peer-to-peer currency, based on processes cryptographic: Bitcoin.

▶️The software code explaining the implementation of the system is detailed in a document published in 2009 on bitcoin.org

▶️Bitcoin, an electronic payment system for peer-to-peer is emerging as an alternative to democratize finance. Its creator Satoshi Nakamoto is probably a pseudonym behind which hide one or more people.

▶️ So most people know that the ideology behind this Proof of Work currency is to establish a monetary system without inflation, which is not the case with the fiduciary currencies that we have had for a long time.

▶️ But some debates on forums seem ambiguous about the inflationary and deflationary nature of peer-to-peer currency. How is Bitcoin deflationary?

▶️ The first answer that jumps out is that this one has a supply limited to 21 million. In any case this is what was presented to the world by S. Nakamoto in 2009 and this is what we unanimously believe.

▶️ But as pointed out above, some believe that the activity of mining or extraction of new bitcoins brings inflation to the system which claims to be deflationary.

▶️ That the Bitcoin we currently know is not yet deflationary and therefore is an inflationary currency based on the definition of the concepts of inflation and deflation in an economic model.

▶️But the purpose of this Thread is to elucidate why Bitcoin is never subject to an inflationary system but rather a moderate deflationary system.

▶️The very first thing to understand before converting $1 into a few satoshi is to know that you are not investing in Bitcoin, you are saving in it.

▶️ Technically what does this mean? This means that if you convert your fiat currencies into bitcoins, you are trying to protect yourself against the inflation that is typical of conventional currencies.

▶️ This is also how we can understand the great revolution that bitcoin brings as a monetary project and a store of value.

▶️For example, if in 2010 Paul had invested $100 in bitcoins, his purchasing power would have increased over time, whereas if Paul kept his $100 in US Dollars or Euros, his purchasing power would have decreased over time. of this decade and over time.

▶️ So bitcoin is the currency that saves money. But how is it that new bitcoins are added every day and that inflation is not there, of course what we can compare to the creation of money constantly.

🔄 This is the main and main question I'm trying to answer 😏

▶️ The answer to this question is simple and straightforward. The Bitcoin Protocol was designed to produce 21 million bitcoins in total and this over a given time. And that everyone knows.

▶️ The big difference between fiat currencies that are subject to inflationary policy and Bitcoin,

▶️ it's that the actors of this economic model can agree on a certain number of statistics and allow themselves to inject trillions into the economy at will. Whereas with Bitcoin it's something else entirely.

▶️ That said, there is no money creation at [ * want * ], at [ * will * ] and at [ * will * ]. Bitcoin is therefore an exchange system of sovereign value, which is self-regulating and which is well thought out.

▶️The New Bitcoin Mining Process is not a way to create any other amount of Bitcoins outside of what has been implemented in the lines of code.

▶️Also, the new bitcoins that miners unlock in the mining process are just monetization of the energy they use to secure the big network.

▶️And these bitcoins do not prevent the normal development of bitcoin as a monetary project. As a result, it is this activity that gives Bitcoin sovereignty and self-regulation.

▶️ This sovereignty and self-regulation gives rise to what I can call the policy of desinflation. Since each time new bitcoins come into circulation,

▶️ There are new people taking it in order to store value.

Bitcoin, what is it?

To put it simply as hello; Bitcoin is an English word that is broken down into 2 syllables, Bit: binary information unit (composed only of 0 and 1) and coin: Currency. That means, with the greatest vulgarity, a currency based on the binary information unit serving as a peer-to-peer payment system, or from person to person. Hence the name ''Binance'' from ¨ Binary Finance¨.

Hey Guys, Am I then welcome on Binance Feed ?