原文作者:Marius Farashi Tasooji
原文来源:coinlive
原文标题：The Bitcoin Revolution: Just Beginning
Compiler: Qin Jin
To fully understand Bitcoin and what it means, one must first understand what value is and what money is. And what gives value to an asset? The question may seem silly, but it's actually very interesting. Our lives are determined by the price of the items we consume or sell. However, do we really understand what value is and where it comes from? (I invite you to ask yourself this question before reading on, there is no wrong answer). There are many ways to think about value:
1. Labor theory
This theory, developed by classical economists, holds that the value of a good or service is determined by the amount of labor required to produce that good or service. Although this theory emphasizes that labor value is the source of wealth, it does not take into account factors other than labor in determining value. For example, it does not explain the value of the artwork.
2. Use value
Developed by neoclassical economists, this theory holds that the value of a good or service depends on its utility to consumers. While this theory emphasizes the importance of satisfying consumer needs in determining value, it fails to take into account the broader economic and social factors that may influence demand.
3. Subjective value
This theory, developed by Austrian economists, holds that the value of a good or service is determined by an individual's subjective perception of its value. While this theory takes into account individual preferences and perceptions when determining values, it does not take into account the broader economic and social factors that may influence perceptions.
4. Exchange value
This theory, developed by some economists, holds that the value of one good or service is determined by its exchange rate with another. While this theory provides a clear way to measure the relative value of goods and services, it does not take into account the broader economic and social factors that may affect exchange.
5. Scarcity value
Developed by ecological and institutional economists, this theory holds that the value of a good or service is determined by its scarcity and opportunity cost. While the theory takes into account ecological and institutional factors in determining value, it does not take into account broader economic and social factors that may affect scarcity.
Have you ever wondered if the currency you use is a good currency and what are the characteristics of a good currency?
1. Rare
Rare currencies maintain their value by limiting the supply, thus preventing currency depreciation (suffering from inflation) and ensuring its stability. In addition, a low supply encourages demand, which leads to currency appreciation.
2. Severability
The divisibility of currencies allows for transactions of different sizes, making them more practical and flexible when exchanging.
3. Portability
The portability of money makes it easy to store, keep, and transport, making it easy to trade. This also facilitates long-distance transactions and allows money to circulate between different regions.
4. Censorship resistance
Censorship-resistant guarantees financial freedom and transaction privacy. This also allows the currency to operate without excessive restrictions or control by the government.
5. Durable
The durability of money allows it to maintain its value and utility over the long term, avoiding depreciation due to inflation, manipulation, and/or technological obsolescence. This also guarantees the confidence and stability of the currency by users.
6. Verifiable
Verifiability of currencies ensures their authenticity and prevents counterfeiting, which is essential for maintaining monetary value, user trust, and reducing the risk of fraud.
Here's a brief overview of the history of the currency:
1. Bartering is a system of exchanging goods or services between two parties without using money, and has existed since ancient times. In pre-monetary societies, bartering was often the only available method of exchange, whereas today it is used more informally and, in some cases, as an alternative to money. For example, the Romans traded salt, which was rare at the time, for Indian and Asian spices, which were equally valuable. Salt-for-spice has been one of the main forms of commerce in the region for centuries.
2. Shell currency is a form of currency used by many ancient and tribal societies that uses shells as a means of exchange and measuring value. The practice dates back thousands of years and is used in many different cultures around the world, including Africa, Asia, and South America.
For example, before European colonization, Native Americans such as the Iroquois, Algonquia, and Lenapu used the term "wampum." Wampum is a belt or necklace made from shell beads that is used in business transactions, political agreements, religious ceremonies, and marriages. Their value is determined by their rarity and quality, and they are considered a symbol of wealth and social status. Wampum was used until the end of the 18th century, when European coins began to replace them.
3. Gold has been used as currency since ancient times, initially in the form of gold bars and later in the form of gold bars. The practice dates back thousands of years and is used in many different cultures around the world, including China, India, and the Mediterranean region.
4. Gold coin currency is a form of currency that has been used in many cultures around the world and has a fixed weight and quality value of gold. This practice was common in antiquity and continued until the 19th century with the modern gold standard, with gold coins issued by the state, banks, and private institutions. For example, the U.S. "Double Eagle" gold coin issued from 1849 to 1933 had a face value of $20. During the Gold Rush and the years that followed, the gold coin was widely used as a form of currency in the western United States.
5. Banknotes are a type of currency issued in the form of banknotes or banknotes that represent the issuing agency's commitment to pay. This practice first appeared in China in the 7th century, but became increasingly important in the 18th century with the rise of central banks and the adoption of the modern paper money standard.
6. The gold standard is a monetary system in which the value of the currency is pegged to gold. This system was widely used during the classical gold standard, which lasted from the mid-19th century until World War I. An example of the use of the gold standard is the Gold Standard Act of 1900 in the United States, which established the gold standard as the foundation of the U.S. monetary system and fixed the price of gold at $20.67 per ounce.
7. The fiat monetary system is a monetary system in which the value of money is determined by people's trust in the issuer of the currency, rather than by intrinsic value such as gold. This system emerged in the 20th century, with the rise of central banks and the end of the gold standard. Now, fiat currencies are everywhere around us: euros, dollars, pounds, and more.
In the past, inflation simply referred to an increase in the money supply. These two things may seem similar, but they are actually different. In fact, if the liquidity created by the central bank will be used to develop a new activity without affecting any other activity, then the value of the currency will remain the same. When new liquidity is mixed with old liquidity, the value of the currency decreases because the new liquidity gives users more purchasing power, and they can consume more or more expensive things. Therefore, we can say that an increase in the money supply leads to a decrease in the purchasing power of money, but this is not systemic. The risk of increasing the money supply is that the currency depreciates more than expected, which can lead to hyperinflation. Historically, periods of hyperinflation have almost always been triggered by the concentration of monetary power. For example, Germany in the 20s of the 20th century, Venezuela since 2016, etc. Here are a very simple six steps on how we can go from inflation to hyperinflation:
1. Centralization of monetary power
When a country concentrates monetary power, it tends to push the limits by creating more liquidity, which is advantageous in the short term.
2. Loss of confidence
As soon as the state starts playing with the rules, currency users lose confidence in the currency and start selling it in exchange for other assets and/or currencies.
3. Severe devaluation
As fewer people want this currency, there is a selling force that causes it to depreciate outright.
4. Rising consumer prices
If the currency of a region depreciates, then the actors of the region will lose purchasing power on the currencies of neighboring regions, which will raise the price of imported goods and increase the cost of living.
5. Assistance from government agencies
To help consumers, institutions provide financial assistance to residents and businesses, which will help them in the short term, but will create more liquidity.
6. Increase the money supply
This aid will only support currency depreciation, since this aid is achieved through the creation of new liquidity or tax exemptions, which will increase their purchasing power in the short term, but will exacerbate inflation in the medium term.
The only way out of the predicament is to go through a period of recession or financial crisis, or to completely change the monetary system: replace it with another currency, eliminate debt, etc. Here's a brief summary of Bitcoin's history:
90's times
Cypherpunks is a privacy and cybersecurity defense movement that emerged in the 90s of the 20th century and advocated the use of cryptography to protect personal data and communications. They were also behind the creation of Bitcoin.
31 October 2008
In 2008, a person under the pseudonym Satoshi Nakamoto published the Bitcoin White Paper, describing how a peer-to-peer electronic payment system based on cryptography and using a distributed database called blockchain works. The publication of this article marked the birth of Bitcoin, an unverifiable currency.
3 January 2009
The genesis block is the first block on the Bitcoin blockchain, mined by Satoshi Nakamoto, the creator of Bitcoin, on January 3, 2009. This initial block cites the first page of The Times that day, reporting the news of the bank's failure.
12 January 2009
The first Bitcoin transaction took place on January 12, 2009, between Satoshi Nakamoto and Hal Finney, a developer and cryptography advocate. Satoshi Nakamoto sent 10 bitcoins to Finney, which was the first transaction recorded on the Bitcoin blockchain.
May 21, 2010
Bitcoin Pizza Day is celebrated annually on May 21 to commemorate the first time Bitcoin was used for business transactions. On this day, Laszlo Hanyecz bought two pizzas for 10,000 bitcoins, which are now worth hundreds of millions of dollars.
December 12, 2010
The disappearance of Satoshi Nakamoto, the creator of Bitcoin, is an unsolved mystery. Beginning in December 2010, Satoshi Nakamoto ceased to be involved in the development of Bitcoin and gradually disappeared from public life. Although several people claim to be Satoshi Nakamoto, his identity is still unknown. The disappearance of Satoshi Nakamoto has made Bitcoin a decentralized, autonomous currency with no central influence or control, increasing user confidence in the technology. Since then, neither Satoshi nor anyone else has been able to attack the Bitcoin network, and disappearing is the way to eliminate its greatest weakness.
Bitcoin's numerous innovative features allow it to compete fiercely with the current monetary system. First, the 21 million unit limit guarantees that Bitcoin is a finite asset, shielding it from potential inflation and providing a long-term monetary stability. In addition, Bitcoin's decentralization makes it resistant to censorship, which means that Bitcoin is not controlled by any entity and is not manipulated by any government or individual, providing stability and financial freedom to its users. However, Bitcoin's price volatility is also a factor hindering its adoption. Although price volatility will gradually decrease over time and will continue to decrease as Bitcoin's valuation increases and adoption increases, price volatility remains an obstacle to overcome for most people to fully embrace Bitcoin as an alternative to the traditional monetary system. Today, more than 400 million people are using cryptocurrency, which is about 5% of the global population. Usage varies from person to person, but it mostly depends on their quality of life.
1. In 2021, El Salvador became the first country in the world to accept Bitcoin as legal tender. El Salvador now has two currencies: the US dollar and Bitcoin.
The adoption of Bitcoin has brought two main benefits to the population.
First, it gives 70% of unbanked people access to a Bitcoin address that is safer and more efficient than cash.
Second, more than 22% of El Salvador's GDP comes from abroad, from immigrants (mostly in the United States), who send money to their families, pay huge transaction fees (20% to 50%), and take days to complete. Bitcoin is a way to send money instantly for just a few cents.
2. In Iran, Bitcoin has become an important financial instrument in the face of severe inflation and international sanctions. As the Iranian rial faces a significant depreciation, Bitcoin offers stability and a hedge against inflation.
Bitcoin enables Iranians to bypass sanctions restrictions on the banking sector, conduct international transactions, and access global markets. In addition to its financial uses, Bitcoin represents a form of digital freedom and a silent protest against government control, reflecting a shift towards a culture of autonomy.
As a result, Bitcoin has become a symbol of the resilience, innovation, and empowerment of the Iranian people in a challenging economic environment.
Bitcoin significantly facilitates international transactions, avoids excessive control by certain governments, and more. In conclusion, Bitcoin offers several advantages over traditional banking systems, including greater security, lower transaction fees, censorship resistance, greater privacy, and global accessibility. Bitcoin transactions are also irreversible, which means that chargeback fraud is impossible. In addition, Bitcoin users don't need a traditional bank account to send and receive payments, which provides more financial services to millions of people around the world who don't have a traditional bank account.