Money is a power, sacred and inviolable. Only God can create life, only governments can create money. Because the logic here is that power. Order comes from power, and technological progress provides a means to break order to some extent, which in turn inevitably challenges power. Bitcoin's technology is irreversible, but this does not represent the fate of this virtual currency itself, just as God-given gold is abandoned by the legal monetary system.
The great teacher Marx said: "Money as the measure of the value of commodities is the measure of the value inherent in commodities, the external form of labour-time".
So money, even as a game of power, has to provide a logical basis for users to measure value.
Banknotes, which are backed by the government's compulsory value, can be used to exchange all domestic goods and services purchased, so they are essentially a social credit relationship based on state authority and state credit.
During the gold standard period, although the paper itself had no commodity value, it was a gold-value coupon, a gold-equivalent, and the paper borrowed its value from the value of gold, thus providing a fixed price to the currency in circulation. In the gold standard, there was no way to force the issue of money, and the total amount of money must be around the government's gold reserves.
But the question is, where does the value of gold borrow from? Apart from being beautiful to wear, it cannot be eaten or drunk. Gold is not a natural currency, although people often say it. Gold is according to the smelting technology of man at that time, gold is more convenient than easy items, so it increases efficiency.
When governments abandon the God-given monopoly of money, which is no longer based on gold or silver, money is left with only a credit relationship, guaranteed by the government's credit and power, which is sometimes more arrogant.
Unchecked currencies began to rampage when the US Federal Reserve expanded the three rounds of QE base money from $800 trillion to $4.5 trillion to save the post-financial crisis United States, and coin taxes to the point where you wouldn't believe it. Excess capacity obscured the nature of ultimate inflation and devaluation, but led to extreme poverty and wealth fragmentation by a global economy overstabilized by currencies.
The number of billionaires in the world is double what it was before the financial crisis. The richest 85 people in the world have the equivalent of all the wealth of the poorest half of the world's population, and in the first four years of QE after the financial crisis, the wealth of these 85 people increased by $5.4 trillion, equivalent to the creation of two United Kingdoms.
The crisis, for you, is the crisis, for the one percent, it is the machine.
You could say that Bitcoin is the first attempt by a civilian to challenge the power of government through technological means and to tell the world that private property is sacred and inviolable.
But the value of Bitcoin, the use value that originally came from the technological revolution, when you exchange your dollars for Bitcoin, your ruby dollar butterfly suddenly grows wings, it will not be erased, he can make payments at the speed of light, no transaction costs, no foreign exchange controls, so, like gold, as its practical value is widely accepted, the price also comes with it, because a tool, when he can solve a specific problem, he naturally becomes a valuable commodity.
Bitcoin is a commodity with value as long as this useful chain continues.
In the United States, the Commodity Futures Trading Commission (CFTC) first recognized Bitcoin as a commodity in 2015, along with oil and gold. Bitcoin futures and options are therefore subject to the rules and regulations of the CFTC.
But the commodity with all the advantages is not a natural currency either, because you have to be bought and sold.
The Federal Reserve thinks Bitcoin is a shaky, egg-shaped currency, so it doesn't pick you up because you're too small. A few years ago, the total market value was a few billion dollars, but now it's close to a trillion dollars at its peak, and the next 10 times it's a trillion. The value of money is not created out of thin air, it has to be transferred, just like gold and the dollar are always a pair of scissors, you're not likely to buy a breakfast with one or two gold coins, but you can do that with Bitcoin.
I'm going to look at the comments of Federal Reserve Chairman Bernanke in 2013.
The payment system in our world is evolving rapidly, and various new methods of payment management are constantly emerging, and some of the ideas associated with Bitcoin can undoubtedly help in these areas. However, I think that Bitcoin itself has some serious problems. Firstly, it does not seem to provide price stability.
The real problem, however, is its anonymity, which is its feature, but also its bug. This makes it easy to become an illegal trading tool, serving smugglers, drug traffickers or terrorists, etc. Needless to say, the government would not be happy to see this happen, so I guess regulation of Bitcoin or similar virtual currency transactions is too early or too late, which will obviously diminish its appeal.
Bernanke believes that this is a technological advance, but one that is difficult to accept widely, because the price is too volatile. But it is inherently convenient and must be regulated by the government. So everything is played out according to the logic of this textbook.
Tencent's previous Q coin, which is a closed system with a service-linked backend, can also be converted into Q coin-rwandan-Q coin, but why is it not a disruptive innovation like Bitcoin?
Cryptocurrency is essentially the creation of a rarity through technology, but the technology itself has no threshold, and cryptocurrency is just open source code for a set of equations computed by a computer and then generated through hardware processing. All types of cryptocurrencies have the advantages of decentralization, open source, unforgeable and limited, but the same type of limited money can be created indefinitely.
Traditional e-money is just a token, an appendage of fiat money, whereas Bitcoin's value comes from its circulation, or what is called a consensus, something deeper than faith.
I think maybe in a way, Bitcoin has become a religion, like religion, whereas atheists think that theoretically religion can be created infinitely, but the religious believers of mankind, through the culture, through the history, through the drudgery, through the inference, through the complete philosophical system and logic, so even if you develop an omnipotent monotheism, you will still be a believer, because for a religion that has been around for a thousand years, time itself is the most scarce value.
Cryptocurrencies, as alternatives to the god-created gold, although new varieties can be developed without limits, but perhaps only this kind of history-making, Bitcoin with a large enough following of believers, can truly stand the test of time in this game of power. So although there are countless cryptocurrencies on the market, I think that only Bitcoin can have a future in this religious currency war.
Bitcoin's future value will not come from its scarcity or utility, but rather from a belief that when the payment technology is mature enough to purchase services directly, rather than calculating its value through some sort of fiat exchange rate, the value of the fiat currency will fluctuate. Because the next time the central bank expands its balance sheet, you may be told that your breakfast is still 1/100 of bitcoin, but it has gone from $20 yesterday to $25 today.
Of course, faith is easily shaken, and sometimes, all you need is a vagina.
JPMorgan's CEO Damon says Bitcoin is not a real thing and will eventually be shut down. The Wall Street tower is finally sitting, the commodity is not going to be shut down, but it can shut down your circulation properties. I feel that this test of faith and fall is much bigger than many Bitconers imagine, this game is just beginning, and we are all witnesses to this history. I also believe that Bitcoin is an irreversible invention, like cars and planes, it is changing your life, but still the phrase, like gold, although unique to different periods of human society's history, is not a natural currency, and requires an extremely long period of sluggishness and social choice.
The US Federal Reserve VS Bitcoin, the fun has just begun.
Translated by Poker Investors