Currency: Demeester Cong post that bitcoin is a reserve asset

For hundreds of years, the gold standard was established in most of the world economy main products.

In 1944 the Bretton Woods dollar bill (USD) to determine the price of gold and related international reserve assets. Until 1971, U.S. President Nixon dissolved the gold standard, the dollar remain in this state. Despite the collapse of the Bretton Woods system and the gold standard, but the dollar is still the major reserve currency – whether it is the International Monetary Fund (IMF) or foreign exchange reserves.

However, this may be changing. According to economists and crypto currency investment strategist Tuur Demeester released November 30, 2018 bitcoin, bitcoin is likely to become feasible reserve assets.

Let’s take a look back at his basic argument.

10 years of history

Throughout the history of ten years, not a lot of time. However, in view of the pace of technology at present and future growth is expected to ten years basically is eternal. Today for most of the technology of daily life will be obsolete in three to five years. In some cases, the schedule will be shorter. Any one of the parents can prove this reality – ten years ago, on average every ten years using a most of the content does not exist. Bitcoin has survived for ten years and the fact that to some extent, proved its potential as a reserve asset.

The highest safety

Bitcoin very safe is wrong. However, in the past few years there have been many security vulnerabilities, not a direct attack on the SHA-256 Certificate (PoW) transaction verification protocol. On the contrary, they are the storage and exchange method of attack, which is completely independent and block chain function itself. In the basic level, and at least as safe as $bitcoin. A stable and growing side chain protocol

For those who have not yet become fanatical fans who block chain, this may be a difficult point – but bitcoin protocol stack is undoubtedly growing. Lightning network, create side chain protocol has brought higher levels of function and use.

Incoming mechanism

This is not a trivial matter. Just two years ago, the traditional financial institutions will not contact the crypto currency. However, Morgan Stanley (Morgan Stanley), fidelity (Fidelity) and Bank of America (Bank of America) currency encryption authority as a legal entity in senior financial investment platform, legalization has made bitcoin unprofitable in a new wave of previous. The height and the improvement of privacy

One of the founding principles of bitcoin’s privacy. It has been successful, because bitcoin is completely anonymous. (but not really.) For example, the address is visible during the transaction. Bitcoin Trading Secrets (CT) tools and bullet proof protocol and other new features to overtake the anonymous address, the whole process of privatization. Bitcoin is a long-standing pain point, new technology is developing unceasingly, in order to better alleviate these problems.

political neutrality

At any time, anyone can access the entire bitcoin source code. This means that bitcoin is a specific entity open, uncontrolled and uncontrollable. The same can be sure that bitcoin is not affected by the outside world, than the average reserve assets of more safety, the latter usually linked directly with the single government. Cancel the central government means that bitcoin can with the operation of the market – a real asset laissez-faire.

User sovereignty

Similarly, most reserve assets (except gold) are associated with government agencies. This means that the potential collapse of the government will mean that the individual asset holders completely collapse and catastrophic collapse. Since bitcoin is scattered and held by individuals, so concentrate on any financial crisis level are not applicable, make it a reliable choice of reserve assets. Good liquidity cycle

To be familiar with the term investors, liquidity cycle is a benign cycle of positive feedback of the financial version. Investors to buy more bitcoin will bring greater liquidity and adoption rates, resulting in more investors to buy bitcoin. This not only increases the value and the value of legalization, more powerful and more candidates to become the status of reserve assets. Bitcoin as a reserve asset that a convincing argument is certainly a new perspective. But in view of the fact that bitcoin is still relatively new, the financial sector has shown the strength and potential, it is worth considering the argument.

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