As the world becomes more uncertain,#BTCbecomes less risky | 14 days before Bitcoin halving, let's drink this bowl of chicken soup
There are less than 2,000 blocks left before the Bitcoin "halving". As the halving is imminent, I will feed you a few bowls of nutritious chicken soup as usual to strengthen everyone's faith:
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. A house is an asset, that's fine. The US dollar is a currency, that's fine too. What is Bitcoin? Is it more like a dollar or a house?
If you don't use your brain and just use common sense to judge, the conclusion is obvious: 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 government-mandated currency issuance is only about 200 years. Why do you take something with such a short history for granted?
2️⃣Is Bitcoin over-issued?
For example, Dazhuzi and Ershuanzi jointly opened a goose stew shop. They stewed 100 geese every day. Later, the two quarreled, and Dazhuzi stewed 100 geese and Ershuanzi stewed 100 ducks, using the same stewing recipe. Did the supply of geese in this goose stew shop increase?
3️⃣ Bitcoin transactions are costly, slow, and complicated, which is precisely the advantage of Bitcoin, not a disadvantage.
Because Bitcoin was invented to fight against fiat currency, not to replace fiat currency. In other words, from the first day, Bitcoin only undertakes the value storage function of the three major functions of currency. The other two functions - counting and circulation are not its purpose. Because Bitcoin is difficult to trade, everyone automatically forms a consensus that Bitcoin = the anchor of all fiat currencies plus all other digital currencies.
4️⃣Is the value of fiat currency based on the consensus of users? No!
There is only one reason why we use legal tender: government coercion. Let me give you an example: In 1933, the Roosevelt administration declared it illegal for private individuals to hold gold, and that they had to sell it to the government at $26 per ounce, and banned the circulation of private gold and silver coins. After confiscating all private gold, the U.S. government immediately set a foreign exchange rate of $35 per ounce. Sell for $26 and buy for $35. Is this transaction based on a consensus between you and the government? No, it was only coercion!
5️⃣If Bitcoin is just to fight against Tongsheng, isn’t buying gold the same?
This is the logic. Since the collapse of the Bretton Woods system in 1971, the US dollar has been over-issued from 70 billion to 5.8 trillion, and inflation has increased by more than 80 times. The price of gold has increased from 35 US dollars per ounce to less than 2,000 US dollars per ounce, and inflation has increased by 54 times. It shows good synchronization. But there are three problems with gold:
First, it is all in the hands of the government and is highly controlled.
Second, it has completely lost the trading scenario. If there is a war, you will not be able to buy food if you take a gold nugget to the street, and you may even lose your life. Just look at Venezuela.
Third, and finally, regarding the imagination of value storage, for the generation that grew up on the Internet, it is no longer imaginable to take out a gold bar from under the pillow and give it to your son before you die. Looking at the exciting online novels, it is already about having 1,000 bitcoins in a USB flash drive at the last moment.
6️⃣Summary:
Gold is currently worth $20 trillion, and Bitcoin is worth $1 trillion. Logically, I don’t see any reason why Bitcoin can’t surpass gold.
Of course, things that make sense in theory may not necessarily be realized. So I am not predicting that Bitcoin will definitely surpass gold. What I mean is that under the Internet conditions, under the premise that gold is in the hands of the government, as a tool for storing value, Bitcoin is far more promising and safer than gold. Rather than saying that I like Bitcoin, I am more disgusted with the government's excessive issuance of paper money. The statement that Bitcoin is volatile, so it is not a currency is as stupid as "Toyota can kill people, so Nissan is better."
It is foolish to compare Bitcoin with tulips. Tulip speculation was based on the gold standard, and the bubble was caused by speculation under the premise of a constant total amount of currency. Bitcoin, on the other hand, is the product of the global over-issuance of legal tender. Legal tender is the bubble, and Bitcoin is the needle that pops the bubble. How can you put the blame on one or the other?
The recent surge from 10,000 to 40,000 and even to 60,000 USD has caused 880% of the people in the cryptocurrency circle to lose money, all because of blindly adding leverage and speculating on the trend. If you like gambling so much, you should speculate on other things, and buy a Bitcoin after making money and hide it.
So, what is your gospel? I think you can consider the following:
Friedman's "A Monetary History of the United States"
Hayek's "The Denationalization of Money"
A World History of Monetary Systems by Akiho Kuroda
⚡️The following content comes from @taoshenga19
1️⃣ Bitcoin is like a social organism that replicates DNA. The more it replicates, the wider it spreads, the more dispersed it is, the more unchangeable it is, and the stronger its vitality. Whether it is a miner, a Bitcoin Holder, or a Bitcoin developer, everyone is aligned with Bitcoin's success because of Bitcoin's incentive mechanism.
Humans first experimented with metal money, then fiat money, then we invented computers, we use the Internet, and we perfected cryptography.
So once we have these three things, computers, networks, and cryptography, you have all the components you need to create a crypto asset network, which is Bitcoin.
2️⃣ Bitcoin is a shared, immutable, and correct ledger system. From the first day of Bitcoin's birth, the above requirements have been embedded in the Bitcoin protocol, and 21 million are also agreed upon 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 are the power that restricts miners.
3️⃣ Inflation can destroy gold and fiat currency. Bitcoin has no inflation. There are 21 million bitcoins in total, 1BTC=1BTC. The number of bitcoins is mathematically correct and is guaranteed by Bitcoin's basic protocol and proof of work.
It is difficult to confiscate. The private key based on cryptography is the most powerful property right in human history. The only property that you truly own and is most difficult to deprive of is Bitcoin.
Fiat currency, real estate, gold, and land all have counterparties and are easily confiscated. Real estate and land are also easily taxed. Securities such as stocks and bonds are derivatives of fiat currency and will be affected by fiat currency inflation. They have counterparties and are easily frozen. Technically speaking, Bitcoin is the most difficult asset to be taxed, destroyed, seized, and devalued.
Property rights are exclusive relationships between asset owners and assets, and historically have always required the government as a third party to authenticate and protect property rights. 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. When you start a war between countries, you can take away the other country's land, gold, and factories, but it is difficult to take away the other country's Bitcoin, which leaves an opportunity for both parties to negotiate. You can use Bitcoin-based multi-signatures to make a will, and the heirs of your assets dare not do anything to you.
Efficient property rights certification: If you buy a property or a piece of land, you need to spend some time to do property rights certification to confirm the legality of the property transfer to your name. However, Bitcoin uses encryption technology to solve the problem of certification. The person who holds the private key is the holder of Bitcoin, and the certification speed is very fast.
The ability to quickly move across political jurisdictions means you can transfer $1 million worth of BTC to another address anywhere in the world with internet access, regardless of political jurisdiction. If you want to transfer $1 million in fiat currency to certain political jurisdictions, it is very difficult and requires a bank as a counterparty. If you want to transfer $1 million worth of gold, it will be even more difficult and almost impossible in many political jurisdictions.
Bitcoin can be divided almost infinitely, but it is difficult to divide gold. Fiat currency can be divided, but it also has the smallest unit. There are a lot of email or spam frauds on the Internet. You can use economic proof methods to charge a few cents for each email or DM message sent, which can reduce a lot of network spam. Integrating Bitcoin into every online transaction, without going through banks or credit card companies, can purify the cyberspace.
4️⃣ The Bitcoin network dematerializes accountants, auditors, information technology, HR functions, security functions, police forces, the military, politics, etc., all collapsing into the Bitcoin network.
If it is a listed company, it needs to settle accounts every quarter, which requires professional accountants to do this, and auditors to review the accounts. After signing, they can be made public. The review process requires manual intervention and is very costly. Bitcoin automatically settles accounts every 10 minutes, and after 6 blocks in one hour, it is irreversible.
Banks need to spend a lot of energy to use various processes to ensure compliance transactions. Once compliance problems occur, the losses are huge. Bitcoin solves the compliance problem. Its nodes will verify compliance issues. Compliance verification comes from distributed mining nodes and does not require manual intervention. Bank compliance requires a lot of manpower investment to check every transaction. 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. Banks' centralized facilities require a lot of investment and regular and proactive equipment updates, otherwise they will be eliminated.
Banks also need human resources departments because there is a lot of personnel training, onboarding, and resignation, etc. Bitcoin does not need a human resources department. The operation of the Bitcoin network does not require human intervention. Bitcoin dematerializes the human factor and turns it into protocols and decentralized mining hardware.
The Bitcoin network is self-healing and self-upgrading. If you run a node and don't upgrade the protocol, you will be squeezed out of the network. If you are a miner, if you don't upgrade your equipment, you won't be able to mine Bitcoin, make money, and will be eliminated from the Bitcoin network. In the fiat currency banking world, all of this requires human intervention.
In the banking system, security is of utmost importance, which requires hiring a large number of security personnel, building a secure information system, and requiring a secure process mechanism. Bitcoin's security is built into the protocol of the distributed network, and its security is inherent.
In order to make traditional banks safer, police forces are needed to maintain security. If you have $1 million in a bank, police forces are needed to ensure the safety of the bank, otherwise your money may be stolen. Bitcoin does not need the police to ensure security. The security of Bitcoin may come from miners in Iceland or from miners in a country in Central Asia. Bitcoin is safer than your body. If someone wants to steal it, they can do nothing to you as long as you do not tell them your private key. The separation of assets and security is a huge advantage of Bitcoin.
Bitcoin is anti-violence. If there are 100 people in a certain political jurisdiction, each of them has $1 million worth of gold, game theory determines that the brutal person will kill them all and then take away their gold, because gold is difficult to take out of the jurisdiction and there is nowhere to escape. If there are 100 people each with $1 million worth of Bitcoin, as long as 1-2 people are locked up, the others will find a way to leave the political jurisdiction, and it is very easy to carry Bitcoin.
Each country has its own legal currency system. In order to maintain the stability of the legal currency system, the army is needed to ensure it, and sometimes wars are needed to ensure the safety of property. Bitcoin is a multi-national network. It is basically impossible to find the location of all miners. The operation of the Bitcoin network has nothing to do with political jurisdiction.
5️⃣ Bitcoin Proof of Work: I did a lot of work, generated a lot of hash value, I solved the Bitcoin security problem, and my work will be paid. Bitcoin miners are rewarded 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 plants and animals need to obtain energy from the ecosystem. Trees need to grow taller to get more sunlight. Predators need to catch prey. Weak predators will starve to death if they can't catch prey. Short giraffes will also starve to death if they can't eat leaves. This is a kind 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 whose 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 is designed very cleverly:
1. The protocol determines that there are only 21 million coins, which is mathematically honest.
2. Proof of Work is honest work, open and contestable. Anyone can run the Proof of Work algorithm anywhere to get paid. It is an open and free system. You can join and quit at any time, and you can run the Proof of Work algorithm without anyone's permission.
Fiat currencies are like animals in a zoo, without competition. Bitcoin is like wild animals, competing for survival in an open environment. Bitcoin transmits its own DNA through code, and is an organism with its own vitality.
⚡️The following content comes from @Svwang1
Plan your own code of conduct according to the design ideas of Bitcoin:
1️⃣: proof of work.
When trading with the outside world, we can only pay with real money and receive goods in exchange for goods. We do not sell on credit and we do not believe in the stories told by others.
Only look at how much work has actually been done. Whoever has done the most work (energy) (in each block) will be used. Don't believe in tears, sensationalism, fame, and other illusory or possibly fake things.
2️⃣The asymmetry of the encryption algorithm.
The cost of decrypting the private key in the encryption algorithm is so high that it is impossible to complete, so the weak in the physical world can easily protect their rights from being violated by the strong. In reality, it means always putting yourself in a position that is easy to defend but difficult to attack.
3️⃣Decentralized liquidation.
There are multiple paths for trading with the outside world, ensuring that you are not stuck by any single bottleneck at any time.
4️⃣ The network with the highest liquidity. Look for opportunities on the network with the highest liquidity and the most openness. This will have the lowest cost and the highest return in the long run.
5️⃣Scarcity.
Time, energy and resources are limited and can only be used on the most important people and things. And this filter standard for importance should be constantly improved regularly. (Similar to the halving of Bitcoin every four years)
6️⃣ Openness and immutability.
Public records that cannot be tampered with are completely true and cannot be falsified. You can learn a lot of valuable things from them, and you can also rely on these real records to objectively plan your future. In fact, most people are often misled by some unverifiable false stories for most of their lives. They have wrong narratives and wrong logic in their minds, and they are busy 24 hours a day doing wrong things.
The following content comes from @BTW0205
[Must-read for investment: The true logic of today's world: interest rate hikes are temporary, money releases are permanent] Why do I always emphasize the need to be brave enough to buy#Bitcoin, to see its long-term market and permanent value, especially at the current price, to abandon fear and move forward bravely, the following five points:
1️⃣ Release is eternal
I have mentioned this sentence in the title. In today's world, is it possible not to over-issue currency and release money to stimulate the economy? The Russian-Ukrainian war, China's economic problems, and the yen's exchange rate deviation, even if the American people want high welfare, Biden's position will probably not be stable if he does not over-issue currency. So over-issuance is the main theme, and releasing money is eternal. If you don't understand this, you can read the "Financial Code of the Central Empire" that I recommended some time ago.
2️⃣Bitcoin’s store of value characteristics
I am talking about the essence here. Everyone knows that Bitcoin is a game for the rich. Even in the cryptocurrency circle, there are very few people who own Bitcoin. Most people are copying local dogs, hoping to get rich overnight. Therefore, those who really hold Bitcoin are rare.
There is a characteristic here: buying fake bitcoins is essentially the same as buying stocks, both for the purpose of buying low and selling high, in order to make money. However, buying Bitcoin, as mentioned before, is a game for the rich. Most of the rich people do not buy Bitcoin for appreciation, but for value preservation and inheritance, so they will not sell it. I will not accept any rebuttal on this point, because I have come into contact with too many rich people who have expressed this demand to me, and there will be more and more in the future.
3️⃣War and international situation have a huge impact
The Russian-Ukrainian war may not last long, but the changes and impacts it has brought about around the world are enormous.
The Russia-Ukraine war will completely change people's concept of wealth, especially the world's top billionaires, especially the wealthy people in China and Russia. Russia is facing sanctions from the United States and Europe, and China is being held hostage.
Apart from these people, do you think the rich people in Europe and other countries will be in a better situation? The rich people in Europe, the United States and other countries have been in tears because of the sharp drop in the stock market and the stranglehold of futures indexes caused by the war.
The biggest impact of a war on the world is that it makes all the rich and middle class people around the world start to re-examine their asset allocation. How can they better protect their private property from being violated?
4️⃣ Ideological disputes
Ideologically, if China moves towards a more obvious "socialist path" and even abandons some of the successes of reform and opening up and goes back to the old ways, the Western world will be wary of China and even impose economic sanctions. The rich will have a hard time, as China's nature is to target the rich, such as the strange "common prosperity" policy, which is to "kill the rich and help the poor" to seize capital for "the state advances and the private sector retreats".
Many people will see clearly that once a war or global sanctions occur, it will inevitably lead to an economic crisis, and the money in their hands will become paper. This is obvious, so they must find a "safe haven". Many extremely "rich" friends suddenly came to me this year to consult about Bitcoin. No matter how these "friends" find me, they all have one goal: to preserve and pass on their assets through Bitcoin as much as possible.
Conclusion
The eternal nature of money printing, the value storage characteristics of Bitcoin, wars and ideological disputes will bring the world to another track. The rich and the middle class will gradually wake up and begin to re-examine their asset allocation, and how to better protect their private property from being violated.
When everyone starts to think about this issue carefully, they will all look to one place: #BTC
The logic of the rise is very clear. Just like what I have always said, the fall of#Bitcoinis the best opportunity for our generation. Grasping it and holding on to BTC may be the most meaningful thing in your life. That's all! #Meme #大盘走势
