You don't know bitcoin because you think it's real

The old language of 2017 is still deafening。

Original title: You Don't Underwood Bitcoin Because You Think Money Is Real

Prepared by Maria Bustillos, Popula.com, journalist, editor

Photo by Eric Foresight News

Bitcoin is often said to be an illusion, a collective illusion. It is just a number that exists in cyberspace, a mirage, as empty as soap bubbles. Bitcoin has nothing to support, except the beliefs of the fools who bought it, and the big fools who bought bitcoin from these fools。

These are indeed facts。

But it may be even more difficult to understand that the dollar is also an illusion. They also consist mainly of numbers in cyberspace, and although they sometimes exist in the form of notes or coins, they do not represent United States dollars, although they are in kind. The dollar has nothing to support, except the beliefs of the fools who accept it as a means of payment, and of the other fools who agree to accept it again as a means of payment. The main difference is that, at least for the time being, the illusion of the United States dollar is more widely and strongly accepted。

In fact, about 90 percent of our dollars are completely abstract, and they don't exist in any tangible form. James Surowiecki reported in 2012 that "it is only about 10 per cent of the United States currency supply, and about $1 trillion in cash and coins. This is now about $1.5 trillion, with a total supply of $13.7 trillion. There's nothing to stop our banking system from creating more dollars when it's coming. By October 2017, of the $13.7 trillion in M2 money supply, $13.5 trillion had been created after 1959, in other words, M2 had been expanded almost 50 times。

the us dollar is a so-called “legal” currency. in latin, the term "statute" means "prevent it," like "fiat lux" to make light appear, and "fiat denarii" to make lira, bolívar, dollars and rubles appear. historically, the temptation of national leaders to create currency was almost irresistible. one obvious result of this wanton behaviour is inflation: the dollar in 1959 now has a purchasing power of slightly less than 12 cents。

The Bitcoin block chain was created in part to address this historical weakness. The system will no longer produce more bitcoin after approximately 21 million bitcoins were dug up in 2140。

Liars and thieves always try to play with structures that are designed to control or even account for any monetary system (or any form of storage of value). (See: document of Panama, Bernard Madoff's $65 billion Ponzi scheme, the London Whale Incident, the bankruptcy of the Long-Term Capital Management Corporation and the International Commercial Credit Bank, the case of the Isabela Stewart Gardner Museum, the 2008 financial crisis, and the theft of Mt. Gox, The DAO and USDT. All means of value storage are targets, and wealth can and will be created and lost using any exchange system, whether by legitimate means or by improper means. However, while it may seem surprising at times, there are still enough people acting in good faith to prevent a complete collapse of the monetary system。

There are some fundamental differences between encrypted currencies and the United States dollar. For example, transactions carried out in the Bitcoin system were recorded in a book that could not be forged, which relied not on the authority of banks or Governments but on the power of a public computer network, and in theory anyone was free to join. Moreover, the supply of bitcoin is ultimately fixed. Of course, the anonymity of encrypted money may not be as impeccable as the anonymity of (unmarked) cash。

The currency itself is an illusion, a collective illusion. You try to earn it, increase it, preserve it, but even so, its only real thing is its symbolic strength. From a certain point of view, this is truly awe。

Our common understanding of the value of the green currency, the Krug gold coin, the Tokyo formula or the pound sterling is the most important, and that common understanding has no fixed meaning; it is constantly changing. The value of all currencies and all means of circulation is unstable and abstract, even in the face of every attempt to ensure their value by setting a fixed exchange rate for the various assets or by adjusting their flows by setting interest rates. The currency is just a dynamic network of agreements that represents the interests of all parties in the network, and it has always been a fragile thread in the human trust network。

Think of the “evading capital” that refugees are forced to trade for huge losses to cross the border, of course it's money, but what does it have in common with your “invisible” wages, a string of numbers that crash into your bank account in the air? Maybe between your payday and your market day, the price of avocado or coffee will rise or fall. In natural disasters, people must suddenly be willing to pay very high prices for a few gallons of clean water. So, what's a dollar worth

All common arguments against encrypted currencies (such as bitcoins) and the technology that underpins them fail to take into account the fact that ordinary currencies are temporary and vulnerable. An encrypted currency cannot be understood if it is considered to be real, solid or "backed" by anything other than human trust in institutions. The US dollar is supported by "all faiths and faiths in America." But what exactly does that mean

This means that if you take a dollar to the U.S. Treasury and ask them to exchange it, they'll give you a dollar. Or if you want, give you four 25 cents of coin。

Unfortunately, the currency crisis of unstable Governments, such as Greece, Venezuela and Spain, has triggered a series of spiralling encrypted currencies. When the Cyprus government tried to resolve the 2013 bank crisis by forcibly reducing citizens’ bank deposits by 7 per cent, the price of bitcoin rose sharply; probably because many southern Europeans who held the euro and were heavily indebted to the government at the time assumed that bitcoin might be a more reliable “financial haven” than the Bank of Cyprus. The Spanish depositors must also be wondering: Will it be our turn to fall

In short, our existing financial institutions are porous and always corrupt; that was the case long before the mysterious inventor of Bitcoin. On January 3, 2009, the Minister of Finance was about to launch a second round of bank rescue. Bitcoin has been a politically motivated project from the outset, with the clear objective of creating a digital trade media that is anti-false and thus provides a better alternative than the current banking system。

Underlying all encrypted currencies (including bitcoin) is the theory that records generated by distributed computer networks can be created as anti-false, thus providing better assurance of monetary integrity than Governments. So far, despite some major setbacks, the sector chain system established by Bitcoin at least partially supports this theory. Since 2009, more than 1 million bitcoins have been stolen, but the distributed books of the bottom system on which Bitcoin is based, the Bitcoin accounting system, have remained stable and unmistakable to date。

Many of the thefts and frauds that took place in the early days of Bitcoin reminded us of the film "The Blood of Gold," a story set up in the 20th century about greed and corruption. There can be no doubt that the rich prospects available are enough to drive people crazy. Note, however, that greed breeds tendencies of evil and madness and does not wipe out the value of gold。

The real warning is that the Bitcoin books remain intact not only because the system is decentralised, not only because of its sophisticated encryption protection, but also because, during its early years of truancy, a group of developers were able to protect themselves with goodwill and reason. Bitcoin is likely to have died long ago without the only firefighter, Gavin Andresen, in a town that was in constant danger in many early crises. Even today, the system continues to be subjected to "pressure tests" with numerous splits and growth pains. Right now (only on behalf of the individual): The growing loss of credibility among the core developers and the perception by many that they are focusing on their own leverage may not only cause long-term trauma to the Bitcoin cause, but may also jeopardize the prospects of an entire block chain technology。

Another problem is that early encrypted money speculators are very vulnerable to "shea" for two reasons:

1. It was difficult at that time to build safe storage programmes
2. The system for the safe transfer of ordinary currency to and from encrypted currency is not yet mature。

The theft of about 800,000 bitcoin by the Mt. Gox Exchange in 2014 has wiped out the whole encrypted monetary ecology of the original crime. The public mistakenly thought that "bitcoin was blacked" and that the biggest exchange was blacked, just as Bangladesh’s central bank had stolen $63 million from the New York Federal Reserve’s account last year, the problem was the corridor, not the currency itself。

It's just as absurd to say "bitcoin is a scam" because of the fraud, as it is to say "the whole financial industry is a scam" because Jamie Damon's company isn't clean. Some say, "bitcoin is used to sell drugs in the dark web!" "But most of the $100 bills contain cocaine residues, and if you're afraid of losing 100 dollars, send me all the extra. Can cash be used to commit a crime to deny its legitimacy? Can't. The truth is that money is born with stains。

It will not be long before the block chain system, which guarantees the trade in bitcoin, is transformed and integrated into other systems because its value cannot be measured. From Wall Street to dunes, investors have already thrown large amounts of money, time and blood into block chains. As long as humans need to verify whether something has happened, block chain technology can provide unmistakable answers through programming. Regardless of the shortcomings of the system issued in 2009, he has proved that human beings can create a record of transactions without reliance on external authority such as banks, governments, etc. This step will never go back。

Any kind of currency, its efforts to maintain stability, are always in a state of “failure”; as long as there is an opportunity to manipulate or falsify transactions, humanity dictates that people always want to cheat. Even the limited and fragile stability in developed countries requires constant vigilance, constant repair and never 100 per cent certainty on the part of countless committed people. The struggle to protect the illusion that money is real will never end, nor will it end。