Article source: Baihua Blockchain
Author | Mu Mu
Produced by | Baihua Blockchain
For many years, the crypto space has circulated a saying: 'The biggest risk of Bitcoin is not being able to hold it.' Essentially, 'not being able to hold it' is a matter of cognition and information disparity. Since the birth of Bitcoin's genesis block, 16 years have passed, and many people still feel that Bitcoin is 'ethereal' and worry endlessly. Rather than exploring 'what is the biggest risk of Bitcoin', it might be better to discuss whether people's greatest concerns about Bitcoin's existence are redundant...
01. The 'Virtual' Attribute of Cryptocurrency Assets
Cryptocurrencies like Bitcoin have always been categorized negatively by a segment of the crypto community as 'virtual' assets. When people mention the term 'virtual', it naturally evokes a sense of 'elusiveness', which immediately does not seem like something 'legitimate' or 'serious'. Thus, opponents have a viewpoint: virtual assets lack credit backing, and currency must be based on credit and physical exchange; ultimately, virtual assets are just a dream.
The reason the above viewpoint is deeply ingrained is that, according to common sense, whether it is the dollar or the yen, it is backed and guaranteed by the national credit of the U.S. or Japan, with stable purchasing power. Naturally, cryptocurrency assets without known origins lack these guarantees, making it difficult to trust them.
In fact, this viewpoint overlooks the technological value behind cryptocurrency assets and does not clarify what 'consensus' really is. Concepts such as blockchain technology, Web3, and decentralized finance have already demonstrated practical application value in global payments, settlements, and other areas. More importantly, the value 'consensus' behind cryptocurrency assets and the consensus generated by credit backing are essentially the same thing.
The reason currency requires credit backing is that human social structures are complex, necessitating a unified and powerful centralized organization to act as a credit intermediary to provide a basis for consensus. For decentralized entities, such as gold or stones from rivers, their physical properties serve as their natural consensus. Even without national credit backing, in everyone's consensus, stones are hard, gold always shines, does not rust, and is valuable. This is also the fundamental principle behind why ancient human societies were able to use shell money, stone money, and gold as currency.
In short, whether something is valuable is not determined by whether it has credit backing, but because it has consensus.
02. The Harvesting Tool of the United States?
In recent years, as a global financial center, the United States has gained increasing discourse power over cryptocurrency assets. Not only are cryptocurrency assets priced in dollars, but the spot ETF for cryptocurrencies listed on the U.S. stock market has also attracted hundreds of billions in funds. Many companies listed on the U.S. stock market and financial institutions hold Bitcoin, and even the newly elected president is determined to seize the advantages of U.S. cryptocurrency assets.
As the United States strengthens its regulation and control over Bitcoin and other cryptocurrency assets as well as the upstream and downstream of the market, people are beginning to worry and even believe that this could become another tool for the U.S. to harvest the world, just like the dollar.
This concern is indeed not without reason. The greater the discourse power, the more it can influence the cryptocurrency market, making it easy for global retail investors to be 'harvested'. Referring to the previous logic of U.S. harvesting, the U.S. attracts global capital to the virtual currency market through financial innovation and dollar hegemony. If cryptocurrency asset prices plummet, it could ultimately lead to capital flowing back to dollar assets, which, to some extent, aligns with the logic of 'dollar harvesting'.
Of course, this concern also has its limitations because cryptocurrencies like Bitcoin and Ethereum are not initiated and dominated by the U.S. but are more driven by grassroots forces through technological innovation. Capital on Wall Street, etc., only started to position themselves after Bitcoin and other cryptocurrencies matured, so this cannot be considered a 'conspiracy' pre-planned by the U.S., but rather a field born from technological development and market demand.
Additionally, public blockchains such as Bitcoin and Ethereum are technically unlikely to be controlled. Even if some mining pools and service providers are deployed in the U.S., their distributed nodes are widely spread across the globe. Even if U.S. authorities can restrict local nodes through regulation or laws to review transactions, overseas nodes can still submit and publish transactions. It’s like gold mines scattered across the globe; local authorities can order local gold mines to stop operations, but they cannot command or control the operations of gold mines in other regions.
Moreover, the reason the United States uses dollar hegemony to harvest globally is due to its absolute control over the dollar. But can the U.S. control Bitcoin like it controls the dollar? No, but the U.S. can dominate Bitcoin just as it does with gold, oil, and other mainstream global assets and modern technology.
On the contrary, the U.S. can marginalize Bitcoin to some extent within a specific range, but it cannot kill it (if it could, it would have died hundreds of times by now). Of course, considering the intertwined interests, it is unlikely that the U.S. would go against its own interests and sacrifice Wall Street capital, at least not before it separates from its own interests.
03. Financial Inequality and Unlimited Issuance?
Some people say that it is unfair for ordinary people today compared to early participants, which is what many call financial inequality. In reality, the Bitcoin network and community information are open and fair; as a public blockchain, it lies there like a public resource, where anyone can access information and submit transactions to its network. It’s just that some people are unwilling to understand and accept new things, unwilling to take a step forward.
Some people say that Bitcoin's cap of 21 million does not exist because its smallest unit, Satoshi, makes it almost limitless.
This is a somewhat strange viewpoint; the change of units has nothing to do with total quantity. 1 liter of water is enough for 1 person to drink; you cannot say that having 1000 milliliters allows you to share it with 1000 people. The unit has changed, but the total amount remains unchanged.
04. Summary
Overall, most people's 'opposition' to Bitcoin is more due to misunderstanding. The 'virtual' era has become a thing of the past; from being an insignificant 'minor player' to becoming a mainstream asset, Bitcoin's consensus and status have become increasingly solid over the past 16 years, now possessing the power to compete with gold. The strong intervention of the United States does not seem to be a bad thing at present, but many uncertainties remain, and we must be cautious of significant fluctuations. I still believe that cryptocurrency and AI will jointly lead to the reshaping of the digital era's future.
