12. Realize the Solutions of Bitcoin dollar standard（part6)

Leave a Comment / By WeishaZhu / January 24, 2023

12.1 Bitcoin standard in the face of hard times

12.2 Plan preparation

12.3 There are three types of UDAI issuance

12.4 The Role of the Bitcoin Stabilization Fund

12.5 The Federal Reserve’s Role in Bitcoin Stabilization

12.6 Bitcoin’s Method of Offsetting U.S. Debt and Satoshi Nakamoto’s Status

12.7 Why it is Bitcoin that qualifies for the Bitcoin-dollar standard

12.8 The Fed’s New Positioning and Future Changes

12.9 The New Bretton Woods Consensus – The Hong Kong New York Consensus

12.10 Differences from the Bretton Woods system

12.11 The Bitcoin Standard turns out to be so simple

Economists describe the problem; entrepreneurs solve it. The Bitcoin system is ugly as hell in the eyes of technologists because deviance does not fit the theory, but it does work. Bitcoin dollar standard idea is also repulsive in the eyes of economic and financial experts; it does a job.

12.9 The New Bretton Woods Consensus – The Hong Kong New York Consensus

1. The Hong Kong New York Consensus is that Bitcoin backs the USD to form the Bitcoin  UDAI, which is dual-track with the USD. the UDAI will have a sponging effect on the USD and eventually merge with the UDAI.

2. The Fed has naturally become the world’s central bank because of the American ability to innovate.

It is a beautiful country that has produced a series of great product gurus; in recent times, there are Steven Jobs, Elon Musk, and Satoshi Nakamoto. They are irreplaceable figures. Without they would slow down history. The United States is a great nation, with Americans holding more than half of all Bitcoin and 10% in official hands in the future, more than double the 5% of total gold holdings (this figure is estimated based on a total of 175,000 tons of gold, with the U.S. holding 8,000 tons). The Fed can expand its holdings of bitcoin in the future. With an advantage that no other country has. Guarantees the dollar transition from a credit-based to an asset-based currency backing. This endorsement strengthens the strong position of the dollar. The Federal Reserve assumes responsibility as the international lender of last resort.

3. Bitcoin completes the global consensus and competes for reserve currency

 status.

The early competition was contingent, just as gold was easy to find early on. The issuance mechanism of Bitcoin is fair from the beginning, and even Satoshi Nakamoto’s coins were mined. Fairness is easy to build consensus. The process of forming consensus must go through local, general, and global. The addition of the Federal Reserve means the formation of a global consensus. Bitcoin, scarcer than gold, has finally become a reserve currency, and UDAI has become a  value ruler.

4. In transforming the credit USD to the Bitcoin dollar UDAI, Bitcoin generates attraction; its generation is achieved through the Federal Reserve Stabilization Fund and the Federal Reserve’s stabilization mechanism.

5. The Fed no longer issues money arbitrarily.

To rearrange the relationship between the government and the Federal Reserve. Can sell Bonds secured by the U.S. government with tax increments to individuals who hold

bitcoin. In other words, the old debts are repaid with the current tax, and the newly issued bonds must have a complete tax guarantee. That is to freeze the old debt principal, which is solved by the rise of Bitcoin.

6. Relevant communities are involved in the Fed’s decision-making process.

12.10 Differences from the Bretton Woods system

The Bretton Woods system realized the gold standard, and the dollar is pegged to gold; the Hong Kong-New York consensus realized the bitcoin standard, and the dollar is pegged to bitcoin; the two issues and forms are the same. So that is the reason for c

alling the bitcoin standard the new Bretton Woods consensus, and the meaning of the system is not the same as follows:

1. That is not an agreement, just a consensus, the free to come and go. The Fed’s strong position is a product of the market.

2. Unlike gold, Bitcoin is separate as a reserve currency and a unit of the denomination. U.S. dollar is still the unit of measurement, only from a credit currency with an air component into an asset currency backed by scarce resources. In blockchain practice, Luna (UST), which does not have 100% USD backing, instantly goes up in smoke. And USDC and USDT, which have a 100% USD margin, hold up despite fluctuations. We don’t need to go back to the gold standard, and we can’t. A dollar standard backed by Bitcoin, the Bitcoin standard, is required. Blockchain is a free ecology, completely unregulated. Stablecoins naturally grow out of it. Blockchain has allowed us to see the natural ecology of each in its way, as well as the riches and rapid disappearance of speculation. Blockchain quickly condensed thousands of years of human history mapping, an ideal social and financial ecology laboratory. The lack of blockchain cognition needs to be remedied; otherwise, the Bitcoin standard is beyond their imagination. The earliest discovery of gold may be effortless; today, a gram is difficult. Early discovery is value; early convincing yourself is value.

3. The financial system has not changed, and commercial banks have not changed, but the business is affected by the need for significant changes. The main difference is the central bank. After 100 years of efforts of two to three generations, completed the establishment of the “Currency Standard Scale,” i.e., the Value ruler.

The Hong Kong-New York consensus will come to fruition because all parties gain. Satoshi Nakamoto gains, Bitcoin holders gains, newcomers gain, the Federal Reserve gains, and the U.S. government gains.

The world benefits from the bitcoin standard. The world is no longer at the mercy of U.S. domestic monetary policy. However, the constantly changing scale of the ruler will confuse people’s thinking, which is the source of chaos. The state, institutions, and the public are equal in the face of the bitcoin standard. Our descendants will thank their forefathers and create a fair environment to purify minds and morals.

12.11 The Bitcoin Standard turns out to be so simple

Economic development and inflation are the fundamental contradictions to which fiat currency has no solution. The idea of this section is inspired by Satoshi Nakamoto’s Cryptoeconomics, using the techniques and results of Cryptoeconomics to solve the fundamental problem of economics. This problem is like the Byzantine General’s problem, which is almost mathematically unsolvable, but Satoshi Nakamoto solved it very easily by economic means. The reason why Cryptoeconomics is excellent lies in the transposition of thinking. This paper is just a few thousand words, avoiding the profound finance and lengthy monetary theories, grasping the most basic concepts and definitions of finance and monetary science, and designing solutions from the problem, not limiting what economic and financial theories of dogma, and therefore is ugly.

The Keynes and Friedman arguments are both valid and flawed, they are arguments in the same dimension, and there is no solution. They did not think of using technical means to solve economic problems. The use of technical means is not only the use of mathematical formulas to form economic theories but also includes implementation methods. Our proposed method is like Satoshi Nakamoto’s solution to the Byzantine General problem, which is simple and effective, but without theoretical height and is only an example of the application of Cryptoeconomics. Practice and theory are used together, and more emphasis is placed on implementation solutions. It is the proposition and characteristic of Cryptoeconomics.

Anyone with a college education can understand the idea of this article, and the concept of this article is the deposit appreciation method. The fact that deposits do not retain value is a travesty caused by fiat money. People deposit money in the trade-off between current and future consumption; when saving money to preserve its value, there is no possibility of over-consumption, and there is no waste of social wealth. The economy follows the laws of natural growth, money is formed by historical values, and without air money, there is no inflation. Inflation is a phenomenon unique to fiat currency.

The solutions used in this paper are proven techniques in Cryptoeconomics and have been experimented with in the Maker Dao.

This section presents one way to achieve the Bitcoin dollar standard for the first time. It solves two problems simultaneously: reducing the historical debt accumulated by the dollar and realizing the Bitcoin standard, and clarifying the Fed’s primary responsibility as the “global lender of last resort.” Everything else should be automatically regulated by the market, including keeping bitcoin stable is automatic and is not the Fed’s primary responsibility.

To understand this article, you need to know how Maker Dao works. See the next section to understand the pros and cons of fiat and the gold standard. The mortgage issuance of the central bank is no different from the mortgage issuance of commercial banks; the difference lies in the different collaterals.

In the next section, we will decipher the passcode in Satoshi Nakamoto’s 132 years, and the price of Bitcoin as a reserve currency will follow the economic growth. We plot a 132-year Bitcoin price growth curve corresponding to economic growth. What to do after 132 years? Satoshi Nakamoto of that era solved it. The solution will be the same, using methods consistent with natural growth.

 

https://chainless.hk/2023/01/24/12-realize-the-solutions-of-bitcoin-dollar-standard/

#BTC #DW20 #Satoshi @DW20 @soghita326134  @zhuweisha