Without the endorsement of national credit, "Bitcoin" is worthless
The history of currency development
Shells and grains: The initial currency was very simple, which could be shells, grains, etc. As long as everyone recognized it, they could be used for transactions. These things also had no endorsement of national credit, but they still became currency.
Metal currency: With the development of productivity, people began to smelt metals, and metal currency emerged. Compared with previous forms of currency, metal currency is more stable, easier to store and identify, which reduces transaction costs and adapts to the growing demand for transactions
Paper money and legal tender: Silver bills and paper money, as exchange vouchers for precious metals, replaced the transaction form of directly transporting large amounts of metal. After being separated from the precious metals, paper money completely became the support of national credit.
Challenges to national credit
Gold standard system: In the 18th century, Britain proposed the gold standard system, and the currencies of various countries were linked to gold, and gold became an international hard currency. But after World War I and World War II, the gold standard system was weakened, the Bretton Woods system collapsed, and the US dollar became the world currency.
Inflation and national credit: The state uses powerful means to force the use of legal tender, but if legal tender depreciates too quickly, people will choose other means of storing wealth. Historically, whenever legal tender is over-issued, people will return to the physical objects with monetary attributes.
Advantages of Bitcoin
Technology and algorithms: Bitcoin gradually reduces the inflation rate through technical means to ensure scarcity. Even though its current scope of application is limited and its volatility is large, it already has the same monetary asset attributes as gold.
Trust and decentralization: Bitcoin does not require an institution to be responsible for it. Compared with the greedy human nature behind the government, the unchangeable technology and algorithms can make people trust and feel at ease.
