The bitcoin currency function
Do you have some questions as follows?
Bitcoin is not money?
Bitcoin almost no application, why?
Copycat coins, tokens, tokens of two eight more powerful, why the market is very low?
The expansion problem in suspense, why bitcoin is still rising?
This paper will attempt to answer all these questions.
Bitcoin is not money?
We should make clear what money, according to the principle of economics Mankiw’s “”:
“Money in the economy is often used for a group of assets for purchase of goods and services, money has three functions in the economy: a medium of exchange, store of value and unit of account.”
Bitcoin can be used to purchase goods and services, is a medium of exchange, occasionally serve as a unit of account, is a store of value. Therefore, many people think that bitcoin is the currency. However, strictly speaking, bitcoin is not money. Because people do not often use it.
A lot of things once the currency, such as: shells, tobacco, gold, etc.. This is because they have been often used to purchase goods and services. However, these things are not used frequently, so we don’t think they are money.
To summarize, bitcoin has three functions of money, but it has not been used. Therefore, the current bitcoin is not money, although it is likely to become a currency.
VS bitcoin currency?
Even if we admit that bitcoin is the currency, then it with $FabI compared to what advantage? To answer this question, we need to examine the bitcoin currency function.
1. medium of exchange. Bitcoin compared with the U.S. dollar, is a better medium of exchange? We can in the following two aspects: contrast (1) online transactions. Bitcoin cash can be directly in the online transaction, the transaction confirmation requires an average of 10 minutes, the best deals waiting for 1 hours, but also need to pay a fee. But, even so, it has been too strong for us dollar currency, because currency cash (if the paying bank or the third party without the aid of) not directly in online transactions. (2) line transactions. Bitcoin can not cash online trading (broken network situation, although it can be used directly in the delivery of paper wallet private key, but this approach is not safe, and currency cash) can directly online transactions. Therefore, as a medium of exchange, and even bitcoin currency, can be used as a complementary.
2. unit. Compared with the US dollar currency bitcoin, is a better valuation unit? Obviously not. Bitcoin price volatility, is not suitable as a unit of account. At present, even businesses to accept bitcoin payments, rarely use bitcoin valuation. So, as a unit of account, bitcoin defeat.
3. store of value. Bitcoin compared with the U.S. dollar, it is a store of value for better? Hope is. The main purpose of Nakamoto So creation of bitcoin, is the hope that it will just like gold hedging. Then, he imitated gold to bitcoin set up a rigid cap, while using the block chain and proof of work mechanism to ensure to the center. Nakamoto So, the basic realization of the goal, the bitcoin system runs well. As a store of value, so far at least, bitcoin victory.
Do you think that bitcoin is not used? The application of bitcoin is the biggest value. Popular to say, today can not spend money for bitcoin deposit, bitcoin is the largest application. Those who look silly, have to buy a hoarder every month, is the correct use of bitcoin, and they are already reaping the rewards.
How will the future bitcoin?
Now, we think about the future, if bitcoin future really became money, so what it should look like? We should start from the three bitcoin monetary function.
1. price unit. When the bitcoin volume becomes large enough, its price fluctuation should be small. Then, bitcoin future hopes to become a unit of account. But we also need to pay attention, this is our good wishes, bitcoin can really achieve a stable price, who do not know. That is to say, in this respect, bitcoin future will still be lost, at least for a long period of time will be lost.
2. medium of exchange. In the future, the bank and third party payment technology by leaps and bounds. With the help of the bank and third party payment, money can not only realize online transactions, and whether the speed of transactions or transaction scope, will finish bitcoin. The past two years, WeChat and Alipay have been fully occupied by the Chinese people to pay. 3-5 years later, with WeChat or Alipay, cross-border transfers will not be a problem, we turn to the RMB, each received $, which technically is not difficult at all. The internationalization of the RMB, the political will not be a problem. Of course, bitcoin can also use the third party payment, enhance the speed of transactions. But in any case, bitcoin can not be like that to achieve the next line transaction currency. So, in this respect, bitcoin future will be lost, and this day will not be too long.
3. store of value. The first two aspects will be lost, if you want to occupy a space for one person in the bitcoin currency field, these third aspects, is to ensure the. But it is precisely this aspect, had been unable to compete with natural bitcoin, because as long as there is no additional legal tender.
Therefore, any future upgrades or bitcoin development, you need to ensure that the store of value function. If you shake the value of bitcoin storage function, the necessary bitcoin does not exist, because it is in the other two aspects will be better than fiat money, if not a store of value, then we use it as a direct legal tender.
How to protect the store of value function?
We know that gold has a very good store of value function, because it can increase the value of. It is very poor and currency value storage function, because it continues to depreciate. Bitcoin to occupy a space for one person in the future currency war, it should be like gold has a value function. Next, we examine what attributes can guarantee the value of bitcoin.
More practical things, if not scarce, there is no store of value. For example: air each of us is the necessities of life, but it does not store value, because it is not scarce. Bitcoin is the total rigidity in the maintenance of its scarcity.
The next question is, how can we ensure that the total rigidity of bitcoin will not be modified? This is not 100% guaranteed, because bitcoin rules can be changed. Because of the hard bifurcation rules can be modified any bitcoin, so it can also modify the total bitcoin. It is for this reason, a lot of hard branch bitcoin against any form of game player, this is also a reason to worry about.
For the real goods, if you want to store value, it must be very stable. This is one reason why gold stored value, because it has stable physical and chemical properties. If gold or gold are radioactive elements, it is easy to rust, you can store gold? For bitcoin is the same. It is best not to split into two chains, chain blocks at the same time to ensure the safety, otherwise, bitcoin value function will be greatly reduced.
With scarcity and stability than that of credit is very weak. However, bitcoin value function is more dependent on credit. The dollar credit, the Fed has endorsed it. It is based on this credit, people began to believe today $1, also can be used as 1 dollars tomorrow. Gold is also a credit, because it has a nature of endorsement. It is based on this credit, people believe that today the stored 1 grams of gold, tomorrow will not deteriorate, and more. People have credit. Some people, I can lend him all away. Some people, I won’t lend him 10 fen. Why? Or credit.
Many experts say that bitcoin without credit, in fact they don’t understand. Bitcoin as a credit, it has to the center, idiotic powder and miners endorsement. Bitcoin idiotic powder and a large group of miners, who together support the bitcoin network, this is the real credit, is also very easy to understand. However, to the extent of the center of how to measure no clear standards. However, we can still feel to the extent of the center of the highest in all bitcoin virtual currency. Is the most typical, the founder of bitcoin disappeared. The founder of a call can be forked coins, such as: ETH, store of value must be discounted. The founder of the currency has not disappeared, such as LTC and ETH, the storage value is to be discounted. The basic copy of copycat coins, such as: LTC and Doge, will inevitably reduce plagiarism credit, so their stored value should be discounted. Those hard but also additional bifurcation countless coins, such as: BTS, fame smelly, stored value sooner or later return to zero. The anonymous to fully opaque currency, such as Zcash, stored value will return to zero. Of course, I am not saying that these coins will lose money speculation. However, in the long term, these coins are running but bitcoin bitcoin, because credit is higher than the combined all their currency credit.
Copycat coins, tokens, tokens of two eight more powerful, the market value is not high, why? Because they have no credit. Ensure the scarcity and stability, but also a value of credit, credit is not built in a day. Thousands of years of accumulation of gold credit, although today it has completely lost the trading function, but its value is still high, but also higher.
The expansion is important?
Does not matter.
I have said more than once, whether or not to solve the problem solving capacity, as long as you don’t shake the bitcoin value function, bitcoin price will rise up. This is because bitcoin is needed to ensure the scarcity and stability first, and maintain credit. The convenience of the transaction is not important, but it cannot upgrade the transaction but also fight the third party payment.
The 20M block expansion scheme last year from Gavin, now 1 and a half years. Excuse me, the real solution to the problem of expansion? No Bitcoin rose? Rose 3 times!
If you are sending expansion fooled, because bitcoin does not solve the problem of expansion, you put your money to sell, you should blame? It is your own fault! You look at those who shout loudest expansion pie, they have to sell bitcoin? As far as I know, they are not selling. This shows that they are aware of the problem of expanding or not important, an important problem is not solved, why don’t they sell coins? So, don’t look at what others say, but to see what others do.
Good at solving problems of the people are aware of such a truth: any solution will bring new problems. Therefore, the essence is to solve the problem – solving old problems, new problems brought by people can endure. If the expansion does not bring new problems, no one would oppose the expansion. The problem is hard, not only brings new problems of bifurcation expansion, but the new problem is very serious. The biggest problem is the hard bifurcation rules. If you do not clear the bifurcation rules, the future bitcoin scarcity will not guarantee. If Gavin called two can rush to implement hard so he is the threat of bifurcation, bitcoin credit. Infinite block nodes caused by the huge, if in the future the only big companies running nodes, the bitcoin network will easily be attacked, this threat is bitcoin security. In order to solve an important problem, shake the bitcoin value function, is the The loss outweighs the gain.
Bitcoin is not money? Bitcoin has three functions of money, but it has not been used. Therefore, the current bitcoin is not money.
Bitcoin almost no application, why? The application of bitcoin is the biggest value. Popular to say that, today can not spend money for bitcoin deposit, bitcoin is the largest application.
Copycat coins, tokens, tokens of two eight more powerful, the market value is not high, why? Because they have no credit.
The expansion problem in suspense, why bitcoin is still rising? The expansion problem is not important, whether or not solve the solution, as long as you don’t shake the bitcoin value function, bitcoin will take off.
Finally, bitcoin is not the only assets stored value, taking into account the huge volatility, it is not the best means of value. I hope the world can have a currency, no additional depreciation, people’s wealth is no longer money issuer plunder, this vision drives me to use bitcoin value, regardless of the price high or low, I will continue. If you do not have the same vision in mind, it is best not to touch the bitcoin, don’t cheat others touch bitcoin.
Isolation of witness can be activated, is an important problem?