Yunbi Laomao: Several Views on Bitcoin

There is no such thing as a right price for Bitcoin

Most people don’t buy Bitcoin because the “price is not right” and always feel it is too expensive. This is the instinctive reaction of people who do not understand the intrinsic value of Bitcoin.

The value of RMB is anchored. For example, 10 RMB can buy two kilograms of good rice, but Bitcoin has no anchor. You don’t even know what it means to have 0.01 Bitcoin.

Therefore, you will inevitably miss 100 yuan of bitcoin, and you will not care about 1,000 yuan of bitcoin. Eventually, you will ignore 10,000 yuan of bitcoin, and then look up to 100,000 yuan of bitcoin!

But Bitcoin doesn't care about your emotions, its price is only related to demand.

You may ask: Under what circumstances will there be a demand for Bitcoin? Due to space limitations, I will briefly list them as follows:

• The circulation needs of more than 10 million holders;

• Demand for cross-border transactions and payments;

• The needs of the blockchain industry ecosystem;

• The need for investment;

• other.

10 million people is the population of a small country (please click the last link to read the original text for the data source of 10 million people). Even if we calculate it at this scale, there are only 1.6 bitcoins per person, which is exactly 10,000 RMB according to today's price. This value is just enough as a reserve fund for small transactions. If the price of Bitcoin does not rise, can you imagine that when there are 100 million users, each person will only have a reserve circulating asset equivalent to 1,000 RMB? What can you buy with that?

The volume brought by high-frequency trading has nothing to do with price

Recently, several major trading platforms have begun to charge relatively high transaction fees. Some people are bearish on Bitcoin because of this, believing that the price of Bitcoin will be cut in half.

Let me give you a word of advice: It’s wishful thinking. Just wait!

The Dow Jones Index just hit an all-time high, which is the result of expected inflows of funds into the future and has nothing to do with strategic trading and high-frequency trading in this market.

Similarly, the price of Bitcoin is ultimately determined by demand and has nothing to do with the trading volume of high-frequency trading. When there is no transaction fee, high-frequency trading provides liquidity for ordinary users and also obtains price spread profits between buying and selling. To some extent, it collects transaction fees on behalf of the exchange.

Let me say it again, the price of Bitcoin is only affected by demand, and the demand now is completely different from the demand three years ago. If you can only use static thinking and stock price-earnings thinking to look at Bitcoin, it is like using Newton's laws to analyze quantum mechanics. Another simple metaphor: looking for a sword on a boat.

Programmers don’t know more about Bitcoin than ordinary people

This passage may make some of my programmer friends unhappy. After all, programmers are the educated people in this code age, and other people may be illiterate in their eyes.

Maybe you are a programmer. You understand Bitcoin and have invested in it, but look at other programmers around you. How many of them have Bitcoin? How many of them have become speculators after playing around with it? How many programmers have been thrown off the train and unwillingly turned to Bitcoin blacklisting to make their presence felt?

Understanding Bitcoin is not just about being able to read the white paper and code logic. It also requires a broader foundation in free thinking and economics, and more importantly, one’s own values. Without these things, it would be just as easy for a programmer to be a little pink, right?

There is no doubt that programmers are one of the first groups of people to know about Bitcoin, but the future participants and holders of Bitcoin will definitely be investors and commercial users. The contribution of programmers to Bitcoin may be the same as that of making a website. Ultimately, the users of the website are the ones who realize the value.

The application of Bitcoin is a pseudo-concept

When many people question the high price of Bitcoin, they say: What applications does Bitcoin have? How can it be so expensive if it has no applications?

I have previously published an article on my official account titled "Any blockchain project that is not aimed at application is a hooligan". Why do people now say that the application of Bitcoin is a pseudo-concept?

Because Bitcoin is a currency, while other blockchain projects are "tokens". This is the essential difference. The tokens of the game hall are valuable only when the game hall is open. If the game hall is closed, the value of these tokens will naturally return to zero. This is why blockchain projects must have application support.

But Bitcoin is currency. Investment, circulation, payment, and transfer are all "applications" in themselves. Why do you have to create any applications out of thin air?

I just ask you: What is the application of RMB? You still can't answer it, right?

So, those who say Bitcoin has no applications and therefore should not be valuable, you can buy QQ coins. QQ coins have many applications, and there are countless small games that you cannot play in your lifetime.

Bitcoin is an imagined community

Please allow me to follow the trend. In "Sapiens: A Brief History of Humankind", Yuval Noah Harari proposed that what distinguishes humans from animals is that humans have an "imagined community". All countries, governments, and companies are fictional concepts in the mind for a common goal, but this is precisely one of the forces driving world change.

The same is true for Bitcoin. When more than 10 million people regard it as an "imagined community", it has in fact become a huge force for driving world change.

Even the proud Chinese central bank will launch a legal digital currency and trading system after the Spring Festival. This is not a competitor of Bitcoin, but rather proof that Bitcoin is pushing the central bank to carry out monetary reform.

Bitcoin's changes to the world are not limited to this. With the further development of Bitcoin, many countries with weak legal tender are likely to directly recognize Bitcoin's currency status. In these countries, Bitcoin will become a common trading currency along with the US dollar, Japanese yen and Australian dollar. What this paragraph wants to illustrate is that the value of all legal tender is the same as that of Bitcoin, which is an "imagined community". Compared with the government endorsement of legal tender, Bitcoin's technology and common understanding endorsement are obviously more valuable.

Any organization has zero impact on the long-term value of Bitcoin

Since its inception, Bitcoin has not required the endorsement of any government agency. Now that it has reached its current scale, it is even more impossible for any organization to interfere with its value in the long term.

The only exchanges that the central bank can intervene in are exchanges with a small number of them. While exchanges have a short-term impact on the price of Bitcoin, they do not play any leading role in the long term.

What the central bank cannot interfere with is the demand for Bitcoin. No organization can stop the demand for Bitcoin from hundreds of millions of people around the world in the future.

As for the demand for Bitcoin, some people do not have it, but that does not mean that others do not have it. For example, I have the need to convert part of my RMB into Bitcoin to avoid inflation.

Bitcoin, like flush toilets and engines, is an irreversible invention. We can no longer go back to a world without Bitcoin. Bitcoin is not a "Chinese product" either. So far, no currency can flow freely around the world like Bitcoin. The liquidity of Bitcoin may exceed that of the US dollar only in recent years. You may not have thought that in a small African country like Nigeria, the number of people searching for Bitcoin on Google would suddenly explode?