The birth of anything must have a meaning of existence, just like the existence is reasonable. Things have causes and effects, and the moon has its ups and downs
The birth of anything must have a meaning of existence, just like the existence is reasonable. Things have causes and effects, and the moon has its ups and downs. Although Bitcoin is not the launch of the currency war, it is also a new mode of currency, which adds another layer to the means of payment. From the birth of computers to the present, human means of payment have been barter, paper currency payment, virtual credit card payment, WeChat and Alipay scanning code payment and other modes, The methods of payment are becoming simpler and simpler, but they have not fundamentally changed. Traditional payment methods are still coordinated by third-party institutions, and cross-border payments have become increasingly difficult. It seems that the world has formed a huge LAN, and every country is a part of the LAN. The birth of local currencies will inevitably cause problems such as inflation and currency depreciation in the process of social development.
Several great economists in history have expressed concerns about inflation and economic cycles, including Anton Menger, EugenBohm Bewerk, Ludwigvon Mises, and Hayek, who are contemplating not allowing one party to control currency issuance, protect private property, and maintain financial stability. In his later years, Hayek turned to the field of currency research and wrote 'Denationalization of Currency'. In the book, he proposes that if it has been proven in other fields, competition generates efficiency and good products. So can competition also exist in the field of currency production and circulation? Specifically, abolishing the central bank system and allowing private institutions and individuals to issue currency and compete freely, buying and selling at floating exchange rates. Discovering the best currency in this competition - any currency that can guarantee stable purchasing power - will eliminate other currencies that are less stable in the market.
Friedman also has a book called 'The Misfortune of Money'. In his view, the transactions of residents on the island were only marked on stone coins, and there was no difference from transactions under the modern monetary system. The monetary system does not necessarily require the credit support of powerful governments. Moreover, this kind of credit itself is not necessarily reliable.
The value of currency is not tied to national credit, and currency can be de nationalized. Isn't that what we did in the previous shell and golden age? But what are the ways to replace it and the so-called "national credit" behind it? Is it Hayek's "Discovering the Best Currency in Competition" or Friedman's "Making Technology Systems Issue"? Or perhaps even a joke about 'Bitcoin' now? Actually, the three are not contradictory.
From barter to mobile payment, there have been many changes in form, but the payment mode has not changed. The birth of Bitcoin may have been to solve problems such as the lack of intermediaries, cross-border transfers, and currency inflation. From the 2008 financial crisis to the 2009 Bitcoin proposal and the birth of the creation block, it seems that Bitcoin did not appear unintentionally, but was an inevitable result of economic development. Just like the economic crisis 10 years ago, Until the economic recession 10 years later, it was all due to the significant impact of the issuance of currency. Perhaps in the future economic model, the issuance of Bitcoin would be reasonable.
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