Speaker: Mai Gang, Founder of Startup Factory
Compiled by: Xu An/i Black Horse
The most essential thing in economics is money.
Before the financial crisis, I read a book about a famous physicist. He said that we in science and engineering, such as studying physics' length, width, weight, and time, these are constants. You economists study units that are variables.
For example: "How much is a McDonald's worth?"
You have to ask: Is it in US dollars, RMB, or Japanese yen?
You have to ask: Is it US dollars from 1958 or 1985?
After reading this, I had an epiphany that economic research studies changing things. I studied economics in undergraduate, so I should look back at the most essential changing thing in this discipline - money.
Later, some books like "Currency Wars" drew public attention to money. I gained a relatively comprehensive understanding of money, so when Bitcoin appeared, I could only say one word: "Wow!"
Bitcoin Captures the Essence of Money
What is Bitcoin? Let me explain in two sentences.
First, Bitcoin is a perfect monetary attribute simulated by mathematicians, geeks, and network scientists using distributed algorithms;
Second, this attribute is maintained by the incredibly powerful computing power of distributed computers.
That's what Bitcoin is. All discussions, doubts, questions, and innovations about Bitcoin return to this framework. Therefore, Bitcoin is not a conspiracy, but an open strategy. Bitcoin does something very clearly. All of Bitcoin's data can be found online at any time by anyone. Bitcoin captures the essence of money, hoping to simulate a perfect currency.
Why Can Bitcoin Simulate a Perfect Currency?
(I) Bitcoin's Monetary Characteristics Surpass Precious Metals
Money has a five-thousand-year history, while nations have a three-thousand-year history. Money is a concept that appeared far earlier than nations. China's currency has gone through various choices, from feathers, shells, stones, livestock, and even women serving as currency in some countries, until precious metal currency emerged.
Precious metals cannot be easily counterfeited, or counterfeiting is extremely costly. They have low transaction costs, are relatively convenient to store, can be divided, and have a soft texture. These attributes made precious metals circulate as currency. However, gold trading still has costs, with risks in exchange and payment between locations.
Bitcoin has a limited total amount, is distributed, and anyone with a computer can participate equally. Bitcoin is a commodity simulated by mathematical methods, possessing all the characteristics of precious metals and surpassing them in all properties.
Moreover, the Bitcoin network can continue to upgrade, so it won't face the problem of gold becoming obsolete or insufficient. For digital currency, the issue of insufficiency doesn't exist.
(II) Bitcoin is Highly Improbable to be Counterfeited
First, computing power is immensely vast and controlled by various people worldwide. It's difficult for one person to simultaneously control so much manpower and computing power.
Second, even if someone could control such computing power, from an economic and logical perspective, they should control the network rather than attack it, because their assets are in Bitcoin, and they won't destroy their own property. This is a probability and logical issue.
Third, Bitcoin has low transaction costs. The total number of Bitcoins will be permanently limited to 21 million, and can currently be divided to 8 decimal places (0.00000001 BTC is the current smallest unit).
(III) Bitcoin Network is an Advanced Clearing and Payment System
The Bitcoin network is a fully automated clearing and payment system without management, with Bitcoin being the circulating unit produced by this network. This network is a natural clearing and payment system that doesn't require management, and Bitcoin's use value is reflected in its clearing network.
The text continues with discussions about Bitcoin's advantages in international money transfer, decentralization, and its role in global financial systems.
Everyone Should Pay Attention to and Learn About BTC
I am not an anarchist, nor am I advocating that we use BTC instead of RMB today. But I can tell everyone that in the future, in as short as 10 years or as long as 30 years, the United States will likely reconstruct a global monetary system, and in this system, the US will probably link the dollar to a new series of assets, including virtual currencies represented by BTC. Before achieving this, the US only needs to do one thing: gain discourse power in the BTC field, which could be computing power, reserve volume, or pricing rights. Why does the US have an advantage in doing this? Because the US has Wall Street, which is the elite of the global elite.
I have an imaginary story about BTC. If BTC becomes a global asset in 30 years, a child might have the following conversation with their father.
Child: "Why do only Americans and Europeans have BTC, but not Chinese?"
Father: "Sorry, my dear. When I was young, I still had money, but at that time, money in China could buy love, but not BTC."
Child: "Dad, where can I buy BTC?"
Father: "We'll make socks and shoes for another 30 years, and then we can exchange them with Americans for BTC."
I hope that everyone, including government institutions, realizes the greatness and complexity of this BTC game, which truly relates to our descendants. Americans used the dollar's hegemony in the last century to obtain the right to mint dollars, making the whole world work for them. If Americans gain discourse power in BTC over the next few decades, they will continue to make the world work for them.
I hope that Chinese entrepreneurs, Chinese enterprises, and ordinary Chinese people can gain discourse power in the BTC field, and I also hope that everyone will pay attention to and learn about BTC.
