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Author: Liam Wang88; Source: Medium
Just a few days ago, the price of Bitcoin exceeded $70,000 to reach an all-time high.Since Satoshi Nakamoto released the Bitcoin White Paper in 2008, Bitcoin has been developing for 16 years.In these 16 years, Bitcoin has never been believed to be to be slowly accepted by the public, from being worthless to hitting a record high, which is very typical of a tortuous development path of a new thing.
There is no doubt that the rise in Bitcoin prices has brought huge investment/speculation opportunities.Whether it is a long-termist, speculator or bystander, it is inevitably shrouded in a huge FOMO sentiment, and everyone is keen to discuss the next stage of Bitcoin’s highs: $80,000, $100,000, $150,000Even $200,000… Although the answers given are different, the expectations of continuing to rise are surprisingly consistent.
In my opinion, the high sentiment helps help Bitcoin form a broader consensus base.But the more in this atmosphere, the more we should be withdrawn from it. It is necessary to look back at the path of the birth and development of Bitcoin.
A brief history of Bitcoin’s development: milestone moments
On October 31, 2008, a man named Satoshi Nakamoto published an article titled “Bitcoin: A Peer-to-Peer Electronic Cash System”papers.In this paper, Satoshi Nakamoto elaborates on the feasibility of electronic currencies based on timestamps and proof of work.
Of course, many people will ask, why did Satoshi Nakamoto publish such a paper?To answer this question, we have to look back at what happened in the world in 2008.
On September 15, 2008, Lehman Brothers, a large American financial company, went bankrupt, triggering a global financial crisis.
In order to respond to the crisis, the US government launched a large-scale rescue action against the domestic financial system. The Federal Reserve launched a money printing machine and adopted quantitative easing policies to release large amounts of money, which seriously endangered the stability of the global financial system.In that year, whether in New York or London, Tokyo or Hong Kong, every financial practitioner felt in danger and was worried about whether he would lose his job tomorrow; influential media such as the Wall Street Journal, Bloomberg, the New York Times, and the Financial TimesThe page discusses the issue of what to do almost every day; every large-scale event in the world discusses only one topic, that is, how to save the market.Anyway, that year, global finance fell into a wail, and everyone was shrouded in the shadow of the recession.
The collapse of the financial intermediary system and the self-result of the motive for evil, coupled with the inflation, exchange rate turmoil caused by the over-issuance of sovereign states, and the slow global market rescue efforts, all reflect the inherent fragility of traditional finance and the global monetary system.and defects.It is also in this era that Bitcoin came into being.
On January 3, 2009, with the official launch of the Bitcoin system, Satoshi Nakamoto mined the Genesis Block of Bitcoin (block number 0), and the Bitcoin network was officially born. He himself also obtained 50 Bitcoin coins.Rewards.Interestingly, there is a message written in this block: “The Times 03/Jan/2009 Chancellor on compromise of second bailout for banks”
On May 22, 2010, a programmer based in Florida, Laszlo Hanyecz, had a sudden idea to try to buy something in reality with the bitcoin in his hand, and eventually he used 1Ten thousand bitcoins were exchanged for two pizza delivered by a local pizza restaurant in Florida.This is the first time Bitcoin has exchange value, and May 22 is therefore called “Bitcoin Pizza Day” by crypto enthusiasts.
On November 28, 2012, Bitcoin ushered in its first halving in its history.On that day, the price of Bitcoin was about $12 per coin. Six months later, on May 28, 2013, the price of Bitcoin rose to $130 per coin.
On July 9, 2016, Bitcoin began its second halving in history.That day, the price of Bitcoin was about US$660 per coin. On January 9, 2017, the price of Bitcoin reached US$900 per coin.
On May 11, 2020, Bitcoin experienced its third halving.The price of Bitcoin that day was about $8,600 per coin. Six months later, on November 11, 2020, the price of Bitcoin rose to $15,700 per coin.
The magic of Bitcoin is not over yet.On June 9, 2021, the El Salvador Parliament passed a bill that approved the use of Bitcoin as the country’s fiat currency.Bitcoin was officially accepted by a sovereign state for the first time in history.
On January 21, 2023, Bitcoin developer Casey Rodarmor launched the Ordinals protocol. Inscription opportunities emerged in large numbers, and Bitcoin ushered in a historic moment in creating an ecosystem.
On January 10, 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs, meaning retail investors and institutional investors in the financial market can buy Bitcoin to enrich their diversified portfolios, thus becoming Bit.An epoch-making milestone event in the history of the currency.
Looking at the development history of Bitcoin, if a new thing wants to become an asset that is particularly worth investing in, it is inevitable to constantly establish and consolidate consensus, but more importantly, it is the “perfection” of multiple accidental and inevitable factors.Integration: ① A special era background may be related to the opportunity of systematic change in human society; ② Showing scarcity, 21 million Bitcoins determine that its supply is not without limit; ③ It has innovative but mysterious attributes, No one knows who Satoshi Nakamoto is now; ④ Uniqueness, no one will deny that Bitcoin is the first product to demonstrate the spirit of blockchain decentralization.
The value of Bitcoin: Not just digital gold
It is these “perfect” integration of multiple accidental and inevitable factors that create the difference in Bitcoin and also give it unique value.
The broadest consensus on the value of Bitcoin is to regard it as “digital gold”, which means that Bitcoin is a very good safe-haven asset to fight inflation, just like gold.
Such a metaphor seems reasonable, after all, the two have many similarities in their characteristics.The most obvious are two points: ① The supply of both is limited; ② Both can be used as substitutes for legal currency.
According to this logic, let’s take a look at the gap in the current market value of the two.According to companiesmarketcap data, as of March 12, 2024, gold had a market value of US$14 trillion and Bitcoin had a market value of approximately US$1.4 trillion.[1] From this perspective, Bitcoin still has at least ten times more room to grow.This logic is seen by many as a strong argument to support the continued rise in Bitcoin prices.
If we look at the lengthening cycle, take the decade from 2013 to 2023 as an example, as shown in the figure below, except for 2014, 2018 and 2022, Bitcoin’s overall yield far outperforms gold, the S&P 500 index, etc.assets.It also once again demonstrates Bitcoin’s superiority in investment appreciation and fighting inflation.
The low-market value of “digital gold” role has brought considerable room for growth to Bitcoin.But in my opinion, it is far from enough to understand Bitcoin from the perspective of “digital gold”.In other words, I think Bitcoin is far more than just “digital gold”, its imagination is higher than gold.There are two main views:
1. Gold is currency, but Bitcoin is currency + technology ecosystem.Since the emergence of currency in human society, it has mainly carried three functions: ① value storage; ② value measurement; ③ medium of exchange.From a currency perspective, there is no doubt that both Bitcoin and gold have such functions.But the advantage of Bitcoin over gold is that Bitcoin is not only the attributes of currency, but also a new technological innovation.This is incomparable to gold.
Because of its technical attributes, blockchain represented by Bitcoin is more flexible and expandable and easier to derive and develop a technological ecosystem.Today, with the emergence of new things such as inscriptions, the Bitcoin ecosystem begins to rise rapidly.Although it is uncertain what kind of situation the Bitcoin ecosystem will show in the future, it is very certain that the technical attributes of Bitcoin will bring greater imagination space combined with its monetary attributes.
2. Gold is prepared for human society, while Bitcoin is prepared for new intelligence and human society.The so-called human society includes different social forms such as slave society, feudal society, and capitalist society.In these forms, gold has been with us for thousands of years.
In my opinion, the understanding of the new intelligence human society is a completely different social form created by humans through stronger intelligence in the future:
① Interstellar society: We are no longer just earthlings, but cosmic people.Musk’s plan to immigrate to Mars has shown that some adventurers in human species are strides in this direction.
② AI human society: Yes, I am not talking about human + AI, but AI people.This means that not only will people survive with the AI they create, but they will also have some kind of AI function. If you implant chips into your brain, is it possible that nothing is possible?Similarly, OpenAI has shown us the powerful capabilities of AI, and we have also heard too many new terms about virtual society: meta-universe, digital humans, virtual avatars… In the process of promoting the transition from real society to virtual society, humans have alsoNever stop exploring.
Whether it is the interstellar society or the AI society, it is necessary to establish a social and economic system, and money also needs to serve as a medium for value storage, value measurement, and value exchange.At least from the moment, no other item is more suitable than Bitcoin.Of course, just as many people are worried, as quantum computing becomes more mature, perhaps one day, the Bitcoin code will be cracked and no longer has scarce attributes.Some people will also question that if humans really immigrate to Mars one day in the future, they will find items similar to gold on it, and Bitcoin is not the final option.
No one can predict what the future will be like. In the long river of history, every new thing is actually a social experiment of major changes in human society. But looking at the future from the present moment, Bitcoin, which has been developed for 16 years, is far from over.At that time.
Bitcoin’s Opportunity: Standing at a New Start
Since the birth of the Bitcoin Genesis block in 2009, early participants in Bitcoin have received great rewards.When you prove that you make money on Bitcoin, either prove that you have a deep enough awareness or prove that you have good luck.With the recognition of Bitcoin spot ETFs in January 2024, I think Bitcoin has stood at a new starting point.At this starting point, my judgment is:
① The role positioning of Bitcoin safe-haven assets is becoming stronger and stronger, and the overall chips will become increasingly concentrated in the hands of institutions and large investors. Retail investors’ investment demand for Bitcoin will be stimulated, but new supply needs to be provided.
② The attributes of the Bitcoin technology ecosystem have just begun to appear.Whether long-termists or investors/speculators will intentionally or unintentionally create and discover new alpha opportunities.The appearance of the inscription can be said to be an attempt. The reason I use the word “try” is because I don’t know if the inscription is the correct answer, or there are other possibilities.But if one day when you make money on Bitcoin, it is still the same thing, either proves that you have a deep enough understanding or proves that you have good luck.
