Bitcoin: A Financial Weapon in the US-China GameYears ago, a friend complained that I missed the opportunity to invest in Bitcoin, suggesting that I missed out on a chance to become rich. However, I always believed that Bitcoin was a scam targeting China, aimed at harvesting its wealth
Bitcoin: A Financial Weapon in the US-China Game
Years ago, a friend complained that I missed the opportunity to invest in Bitcoin, suggesting that I missed out on a chance to become rich. However, I always believed that Bitcoin was a scam targeting China, aimed at harvesting its wealth.
Bitcoin's decentralized nature seemingly bypasses the regulations of China's banking system, but it actually facilitates the private transfer of Chinese assets to Western countries. The US, the UK, and other nations can seize and sell Bitcoin at any time, while Bitcoin has no impact on the functioning of Western economies.
On the surface, Bitcoin did create wealth, as Zhao Changpeng, the founder of Binance, once held a net worth of $90 billion due to his involvement in Bitcoin. However, in reality, the Americans cleverly harvested Zhao's fortune. The case of Qian Zhimin, who laundered 60,000 Bitcoins in the UK, is also shocking. These incidents demonstrate that Bitcoin is not a truly decentralized currency, but a virtual currency controlled by the West.
Despite its manipulation in politics and economics, Bitcoin does offer the possibility of a virtual economy from an internet technology perspective. Drawing inspiration from Bitcoin's design, foreign countries have developed over 500 virtual currencies, some of which have found applications in specific fields. Therefore, in countries where Bitcoin is not banned, it does possess monetary functions.
During the 2020 US presidential election, Donald Trump boldly declared that if re-elected, he would legalize Bitcoin in the US and include it in America's strategic reserve assets. This seemingly audacious move actually concealed a deep-seated conspiracy.
Why did Trump suddenly elevate Bitcoin to such a level? The reason lies in the fact that Bitcoin is considered a foreign currency in the US, and the US government legally holds around 212,847 Bitcoins, worth approximately $15 billion. In comparison, the US gold reserve stands at 261.5 million troy ounces, valued at roughly $600 billion.
Trump's idea of incorporating Bitcoin into America's strategic reserve assets is not a recent concept. On July 25, 2020, Republican Senator Cynthia Lummis from Wyoming proposed legislation for a Bitcoin strategic reserve. This bill aimed to instruct the Federal Reserve to purchase Bitcoin and hold it as a reserve asset, similar to how the US central bank holds gold and foreign currencies.
Researchers claim that the US possesses 200,000 Bitcoins, making it the second-largest holder behind Satoshi Nakamoto. If Satoshi is a creation of the CIA or the Federal Reserve, then the US effectively holds absolute control over Bitcoin, and Trump's actions are merely clarifying its future prospects.
China promptly shut down Bitcoin's legal status, preventing the US from extracting government wealth. While the US suffered no losses, it essentially harvested global Bitcoin investors at almost no cost.
The true purpose of Bitcoin entering the US monetary system is to enable the US to pay off past debts incurred from borrowing once it gains legal currency status, circumventing the obligation to repay with real gold and silver. At that point, the US could manipulate Bitcoin's value to its advantage.
The Chinese government does not recognize Bitcoin's legal standing and has severely cracked down on Bitcoin trading, therefore refusing to accept the US's Bitcoin-based debt repayment plan.
China's suppression of Bitcoin's legal status infuriated the Americans. Further aggravating them is China's continued production of Bitcoin mining machines, making it the world's largest producer. These machines, primarily exported to the US, have generated significant profits for China.
The Americans have labeled Chinese-made Bitcoin mining machines as "spy tools" in an attempt to block their entry into the US. However, security experts believe that these devices do not contain any memory for espionage activities.
Today, the majority of Bitcoin is mined in the US. Bitmain has signed a contract with the US stipulating that all Bitcoin devices must have an "origin country other than China" or any other sanctioned nation. Bitmain has been forced to shift some of its production capacity to Southeast Asia, but it cannot shake China's dominance in Bitcoin mining machine production scale and capabilities.
Both the US Republican and Democratic parties covet the profits China gains from Bitcoin mining machine production. Bitcoin mining consumes 0.6% of global electricity consumption, and after China banned Bitcoin mining, the practice migrated to the US.
US President Joe Biden has demanded that a Chinese Bitcoin mining farm called "Mine One" relocate from its 12-acre site near Cheyenne, Wyoming.
Core Scientific, a Bitcoin mining company based in Austin, Texas, has deviated from tradition and ordered Bitcoin mining equipment from a subsidiary under Jack Dorsey's control, but its largest investor remains Bitmain.
During a Bitcoin conference, Trump declared that cryptocurrency should be "mined, minted, and manufactured" in the US, aiming to snatch the global Bitcoin mining machine market share from Bitmain.
However, Trump's plan is not popular in the US. Trompeter from Sphere3D believes that the US should offer alternatives of the same or better quality.
The US-China rivalry in the manufacturing sector is comprehensive. Through a deep understanding of Bitcoin and Bitcoin mining machines, I have grown reluctant to see Trump return to power, as he is far more cunning than the bumbling Biden.
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