The Nature of Currency and the Revolutionary Nature of Bitcoin

Currency is the most essential element in economics. Unlike physics, which studies fixed units, economics studies variables. For example, the price of a hamburger can change due to different currency units and time. This understanding has led me to re-examine the essence of economics and currency.

The emergence of Bitcoin has attracted widespread attention. It is essentially a digital asset with perfect monetary properties simulated by mathematicians and network experts using distributed algorithms, maintained by a powerful distributed computing network. All information about Bitcoin is public and transparent, and anyone can query it.

Bitcoin surpasses traditional precious metal currencies in many ways. It has a limited total supply, is decentralized in distribution, and has a low barrier to entry for participation. As a digital asset, it possesses the advantages of precious metals while overcoming some of their limitations. The Bitcoin network can also be continuously upgraded, avoiding issues similar to gold exiting the currency stage.

In terms of security, the probability of Bitcoin being forged is extremely low. The vast distributed computing network makes it difficult for a single entity to control enough computing power. Even if someone possesses a large amount of computing power, from an economic perspective, they are more likely to maintain rather than attack the network.

The Bitcoin network itself is an advanced clearing and payment system, with fast transaction speeds and low costs. Compared to traditional international remittance services, Bitcoin has significant advantages in both efficiency and cost.

Decentralization is the guarantee of security and freedom for Bitcoin. Human society has gone through two stages of currency: precious metal currency and government credit currency. The emergence of Bitcoin has opened the third era of currency. These three forms of currency will coexist rather than completely replace each other.

The credit foundation of Bitcoin is mathematics and probability. Although it does not have the backing of national credit, in certain economic activities, especially in transactions involving networks, globalization, and virtual domains, Bitcoin may become an important form of circulation.

The emergence of Bitcoin has triggered complex international games. It is not just a tool for liberals, but also the focal point of the contest of multiple forces. A new global monetary system may emerge in the future, and virtual currencies such as Bitcoin may become an important part of it.

Everyone should pay attention to and learn about Bitcoin. It is not only related to personal wealth but also to the long-term interests of the country. We should recognize the complexity of the game behind Bitcoin and strive to gain a voice in this field to avoid repeating the mistakes of last century's dollar hegemony.