What does the economics community think of Bitcoin?

There is a small island in the Pacific called Yap Island, with a population of about 5,000-6,000 people.

The local indigenous people use a large stone as currency. This stone coin is round and hollow, with a diameter of more than three meters and a weight of four tons.

Because the stone coins are heavy, they often do not need to be moved during the transaction. The new owner's name is engraved on the stone, and the tribe elders bear witness, and the transaction is completed.

Since there is no limestone on the island to produce this kind of stone coins, the raw materials have to be shipped from the neighboring island of Palau. So the value of a stone is not just its size, but also how difficult it was to transport, or whether it was transported by a famous sailor.

Later, the Japanese occupied Yap Island during World War II and used the stone coins to pave roads. Coupled with the use of foreign currencies such as US dollars, no one uses stone coins today. After all, it is very primitive. As soon as the productivity increases and the social organization becomes more complicated, it will immediately be unable to keep up with the situation.

In fact, in my opinion, Bitcoin is very similar to this stone coin (SB).

A thing, even if it has no practical use, is given value when everyone recognizes its value.

For example, diamonds, the cost of artificial synthesis is not high, but they are still very expensive. Similar items include antiques, calligraphy and paintings, etc.

There is no problem at this point, the bank also issues commemorative coins, which are worth more than the same amount in cash.

The inventor of Bitcoin is very good at telling stories, so I can understand if it is used as a virtual collectible. After all, even the equipment in the game can be sold for money (Zha Zhahui: Hello, come and talk to me. Playful Blue Moon).

It’s okay for everyone to enjoy the stories told by Bitcoin promoters. However, there is a problem if it is really used as currency. Let’s take a look at its self-promotional features.

First of all, the most important advantage that Bitcoin is touted is security. How to use multiple layers of encryption and how to make it impossible to break through.

But the premise of this advantage is that the current currency has irreparable security flaws. Do you think so? Whether it’s cash or bank transfer, or even various mobile payments and facial recognition in the future, I don’t think there will be huge security holes that will cause the entire old currency system to collapse.

Secondly, another advantage of Bitcoin is decentralization and privacy protection.From the beginning of its design, this technology regarded the government as the enemy and wanted to decentralize monetary power and not be influenced by the government's monetary policy. The founder, Satoshi Nakamoto, himself is an anarchist and feels that the government will persecute the people.

Regardless of his political views, can governments tolerate the existence of a completely unregulated independent financial system? Let’s not talk about other countries. Anyway, our country has already hammered out Bitcoin.

Then this system also needs to protect privacy and anonymity. If it really becomes popular, companies will use some small means to evade taxes and cross-border investments to evade supervision. If the government wants to investigate, it must cooperate with an anti-government financial system. This picture is too beautiful to think about.

You guessed it, in the end, would the police and the military be willing to receive wages in U.S. dollars or bitcoins?

Finally, many respondents mentioned that the total amount of Bitcoin is fixed, which is doomed to natural deflation. As a collectible, this property is great, as things are rare and valuable. But as currency, the total amount of human wealth is increasing. If your currency does not increase with it, it will be completely inconvenient to use it.

Ultimately, money is there to facilitate transactions. Is Bitcoin convenient? In the short term, prices are unstable, in the medium term, deflation cannot be solved, and in the long term, it is working against the government. It really doesn’t have the condition to become currency.

You must know that the U.S. dollar circulates around the world not because of its beautiful printing, but because it is endorsed by the credibility of the U.S. government. It can be endorsed because it manages and protects huge wealth and productivity. So in the final analysis, it is because it has factories and guns.

As for Bitcoin, as a collectible, it is a witness to a period of national enthusiasm. But its value as currency is probably not as good as the stone coins used to pave roads on Yap Island.

The controversy this article sparked was to be expected. Whether you are optimistic about Bitcoin or friends who have already bought Bitcoin, I wish you all the best. I'm living a decent life, but I'm a little timid and don't have a strong head, so I don't dare to fight. I envy you for being free and easy. You win as a young nightclub model, but lose when you work in the fields. #BTC #BOME #WIF

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