Is Bitcoin a currency or an asset? It’s time to end this problem.

I. Disagreement

With regard to Bitcoin, the biggest difference is whether Bitcoin is money or assets?

There are other questions about this question, such as: Is the core function of Bitcoin payment or value storage?

Second, controversy

Some people say that Bitcoin is of course currency, because Nakamoto's title in the white paper is "Bitcoin: a peer-to-peer electronic cash system", cash, of course, currency.

And the entire bitcoin design, whether it is from UTXO or the total amount of 21 million, or public key, private key password pair or workload proof, is to support this currency system, if only need to create an asset, Don't be so motivated .

Bitcoin has been in development for 10 years now. In the past 10 years, this kind of voice should be regarded as the mainstream.

But at present, this kind of voice has also been challenged. More and more people on the market now say: "Bitcoin is not suitable as a currency, but it is suitable as a value storage asset."

Why not do it as a currency? Because its volatility is really too high.

At the height of the day, the fluctuations of the day and the day can reach 30%. Now the fluctuation is slightly smaller, but the fluctuation of the day is also more than 10%. When the market is extreme, it will be close to 20%. And it can be expected that even if the market value of Bitcoin continues to expand in the future, the 5% fluctuation of one day should still exist.

Under such high volatility, it can't afford the function of money. If you want to use Bitcoin to buy daily necessities, such as buying a bag of salt and buying a bucket of oil, at the moment you pay, the price fluctuation of bitcoin may have exceeded the price of your salt and oil itself. In this case, it is unrealistic for people to pay with bitcoin.

Because of these problems, Bitcoin is now basically divided into two factions, one is the currency group, and the other is the asset group. The two factions have been arguing over the Internet and have played a lot of slobbers. This situation has been going on for a long time.

But I think this problem can already be conclusive, because the conclusion is very obvious: Bitcoin is both a currency and an asset, a bit like the wave-particle duality in physics. Bitcoin has both the image of money and assets. Sex.

This is not an opportunistic answer, but a fact.

Third, the currency attribute of Bitcoin

First, bitcoin must exist as money, and currency is its fundamental attribute.

There are already thousands of assets in the world, and we don't need another asset.

Now the monetary system of the entire traditional world is flawed, and Bitcoin can be used to make up for this shortcoming. This is the original intention of Satoshi Satoshi's design of Bitcoin, and the purpose of designing an entire system behind Bitcoin. Payment is the core attribute and essential attribute of Bitcoin.

The development, reform and improvement of Bitcoin must be mainly around the perspective of money, because this is fundamental.

Some people will say that Bitcoin is a currency, so what about the existence of these problems in the payment? For example, in China, everyone uses WeChat and Alipay. Who will use Bitcoin to buy coffee and buy burgers? How to solve its high volatility problem?

The answer to the question about buying coffee and hamburgers is: In China, there are not many people who need to use Bitcoin to buy coffee to buy burgers.

But when you go abroad, for example, if you travel to the United States during National Day and don't have enough dollars in your hands, this bitcoin, bitcoin cash, etc. is a very good solution.

In a foreign country, you can use Bitcoin, Bitcoin cash to buy coffee, buy burgers, if you don't have to go hungry. Between starvation and volatility, you certainly won't care about such a little volatility.

So, think about this sentence again: Bitcoin is a perfect complement to the current legal currency system.

They are not who will replace who, who will be the life of the people, but each has their own target market, the two can coexist harmoniously. In fact, there are a lot of empty space in the current French currency payment system. This time, the space is the target market for digital currency payments such as Bitcoin.

I have summarized these target markets in four words: cross-border, innovative, illegal, and limited.

1. Cross-border: At present, cross-border transactions and cross-border transfer of French currency are very inefficient. If it is fast, it will take several days or several weeks. If it is slow, it will be inaccurate, and the cross-border transfer of digital currency is the minute level. Efficiency can be said to be very high, and as technology advances, future efficiency will only be higher. Not only trade, but even traveling abroad, studying abroad, you can not carry a lot of cash with you, and foreign exchange is also very troublesome, can be completely solved with digital currency. These scenarios are the concentration camp for the real demand of digital currency, the base for the development of digital currency, and the future business volume will be very large.

2. Innovation: In order for traditional enterprises and merchants to accept digital currency, the difficulty of the audience may be greater considering the accuracy, legal and compliance issues of the audience. But for emerging companies, Internet companies, high-tech companies, especially blockchain-original companies, whether they sell products or pay wages internally, they should be the most acceptable to accept digital currency payments.

3, illegal: such as drugs, gambling, etc., this is a bit embarrassing. However, these behaviors do have the strongest need for digital currency, and the anonymity of digital currency also objectively facilitates illegal activities. However, this is a violation of the law after all, and it is not in line with the good public order of the society, so we do not encourage this, but it is difficult to put an end.

4. Restricted: Under the current payment and settlement system with the main currency as the main body, there are many restrictions on behavior. For example, when the industry such as P2P and equity crowdfunding was just new, access to the legal currency payment system was restricted. For example, some special industries need to go through many procedures to access existing payment systems, as well as large-value transfers. Limits on quotas, such as exchange rate effects that are difficult to eliminate in cross-border payments, etc., where these payments in French currency are limited, are also the main areas of digital currency development.

The goal of digital currency is not to replace the legal currency, or to compete with the legal currency, but to make up for the shortcomings of the legal currency, to compete with the foreign currency where the competitiveness of the currency is insufficient, thus bringing greater convenience to the society.

As for the volatility problem in bitcoin payment, there are specific technical means to solve it.

Before I read the news, I said that Bitcoin Cash has launched a software that is essentially equivalent to an OTC service that can solve the price fluctuation problem in payment.

For example, if a cup of coffee costs 20 yuan, then you pay a bitcoin worth 20 yuan. This off-exchange service provider will convert it into a dollar (RMB) worth 20 yuan and then pay it to the merchant. For merchants who accept digital currency payment services, In fact, there is no impact. He will always receive 20 US dollars. He will not bear any fluctuations in Bitcoin. He only has to bear a small fee. It is similar to the handling fee of credit card. This can greatly expand the acceptance of Bitcoin. The range of merchants and applications paid.

Fourth, the asset properties of Bitcoin

Bitcoin has the property of currency, the currency property is its fundamental property, but bitcoin also has asset properties.

Bitcoin has a big difference with traditional French currency. Traditional French currency can be over-issued. Generally, it is based on the current circulation of goods and services on the market, and then the corresponding additional issuance. If necessary, it can even be Unlimited issuance.

It is in this case that the French currency can maintain price stability. Of course, in this case, there will be some fluctuations in the price, which is the inflation and depreciation that we usually say, but it will only take a long time span. There is a clear feeling, and the short-term feeling is not obvious.

Bitcoin is a fixed amount. In the case of a fixed total amount, if the ecology of bitcoin coverage is wider, the more merchants accept Bitcoin, the wider the demand for bitcoin, then the price of bitcoin is indeed It will continue to rise. In the short run, there will be a decline, and its price will always fluctuate constantly. No matter how much its volatility will decrease in the future, it will always exist.

The inherent characteristics of Bitcoin determine that price fluctuations in Bitcoin will always exist, and an attribute derived from Bitcoin outside the currency attribute is called an asset attribute.

Similar to the currency attribute, the asset property of Bitcoin is also objective and cannot be denied.

This is why Jiang Zhuoer said that Bitcoin has a real use value of 1%, a value storage value of 10%, and a 90% speculative value. This is what ahr999 said, mapping the current world of fortunes to the bitcoin, and bitcoin will be worth 160 million yuan. Both of these arguments talk about the same thing, the bitcoin asset attribute.

V. Conclusion

Bitcoin is both a currency and an asset. It can be used for both payment and value storage. The two are not one, not one or the other, but they exist at the same time.

The payment attribute is fundamental and is an essential attribute. If there is no payment function, the value storage function no longer exists.

Asset attributes are an attribute derived from the special design of Bitcoin. This attribute is also an important feature of Bitcoin. It is not because Bitcoin is not a currency attribute.

Without the payment function, Bitcoin becomes a passive source of water; without storage value and asset attributes, Bitcoin cannot obtain enough consensus.

Because Bitcoin is a currency, we have to find ways to promote the functions of money. We have to increase the scope of use of money. We have to increase the efficiency of the operation of the currency. This requires the efforts of the whole society. At the same time, because Bitcoin is an asset, Therefore, this asset needs higher liquidity, requires higher turnover, requires more people to participate, and needs to bring more rewards to everyone.

Therefore, I think that everyone can no longer entangle the question of "what is the bitcoin in the end?" It is no longer necessary to spend more energy on internal consumption. The most important thing now is that everyone should unify their thinking and work together to make bitcoin. Push to the bigger next step.

After all, Nakamoto said: "After 20 years, the volume of transactions on the Bitcoin chain is either huge or not."

It’s been 10 years since the 20-year deadline, and only half of it’s time left.