Encrypted Currency and Stratum Crossing (1): Bitcoin is your only chance to "slap the table"

If there is a network hot word that has been the most concerned about the last two years, then "level solidification" will certainly have a place in it. In order to get rid of the destiny whose own destiny is locked, many young people can be said to be racking their brains and spare no effort. The "knowledge payment", "time charging" and "lifelong learning theory" of the fire since 12 years are largely for the sake of A product that alleviates this anxiety. However, after a fierce operation, many young people were frustrated to discover that many of the courses and teachings of “network instructors” did not help them change their own destiny. Instead, they seemed to be simple. The rude way – that is, buying bitcoin, but let the parties earn a lot of money, and realize the freedom of wealth at a young age.

The question is: Why, for many young people, the high morale and systematic learning, the final result is far less than the "blind cast" cryptocurrency? Is it just the reason that "the time is not here?"

First, the root of class solidification: the imbalance of incremental resource allocation

To answer this question, we must get the right medicine.

First of all, it is necessary to find out what causes the class solidification. On this issue, the conclusions on the Internet are very diverse, but the importance of one factor is relatively recognized by everyone – that is, the development of the economic environment. In concrete terms, when an economy has the following two types of changes, the original social class is most likely to undergo dramatic changes:

The first, holistic and systematic changes.

It is well understood that when an economy as a whole is in a state of rapid growth, all walks of life may give people the opportunity to cross the hierarchy. For example, the rapid economic development after the reform and opening up. At that time, there was a popular saying in the society – "Three hundred and sixty lines, the best in the line", which reflected that there were huge wealth opportunities in many industries at that time.

Second, local and structural changes.

This situation often occurs when the economy is slowing down and the incremental cake is limited. Only a certain type of industry or enterprise can achieve its own high-speed growth only by squeezing the survival space of competitors. Compared with the above situation of “win-win”, this situation is more like “zero/weak and game”. A typical example is industrial structure transformation. Therefore, we can see that the young people now don't believe in the "three hundred and sixty lines, the best of the best", but more importantly, "choice is more important than hard work."

From the above summary, there seems to be a lot of opportunities for the economic society to give people a chance to cross the class. However, through daily life experience, it is not difficult to find that there are only a handful of people who can seize these opportunities and achieve class crossing. The reason is that although there are many opportunities in the world that can change people's destiny and class, compared with the highly complex economic activities, it is a complete and small probability event. First, the medium and high-speed economic growth, Originally, just like adolescents in adolescence, it often only appears in the stage when the economy has just started from a low base. When the time passes, this golden time will never return. As for the transformation of industry and enterprises, it is a "fate" that can be met and not demanded. Although there are certain inevitable factors in this process, more often, it needs some accidental factors, such as technical Breakthroughs and the promotion of policies.

Table: From the history of East Asian economies, high-speed development often only occurs at the beginning of the low base.

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From this point of view, in this era of the times, the opportunity that society can give ordinary people "class crossing" is actually very rare. To make an analogy, if the development of the economy is like the normal operation of the human body, the probability of "class crossing" is probably equivalent to the genetic mutation of the cell. Although each part has theoretical possibility of variation, the probability is Quite low. For many people, they may not be able to shoulder this opportunity with their career. In the end, you can only spend a lifetime in the original social class. This is the “level solidification” that has been mentioned in recent years.

Photo: "Unlike your young masters, we must do our best if we are alive."

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In contrast to the positive propaganda of many successful people, in the desperate period of "level solidification", no matter how the ordinary class charges, adjusts and struggles on the original track, it may be difficult to change their own destiny. What is even more tragic is that even if it is only the gap between the classes, it will not shrink with the "struggling and hard work" of ordinary people. The reason is that when an economy is in the “solidification of the class”, the distribution according to the “two-eighth law” can be not only the existing stock social resources, but also the incremental social resources that the ordinary class relies on to turn over – For example, education, information, and networking resources are also true. And for some reason, the distribution of the latter is often higher than the "two-eight ratio", and in this process, the individual's efforts to allocate resources can only play a small, or even close to zero, It is one of the important sources of “sadness” and “powerlessness” among many young friends in the attempt to cross the class.

Second, financial resources: the last steel nail on the class solidified board

It should be pointed out that although social resources including education, information, and connections are disproportionately distributed, even beyond the "two-eighth principle," the so-called "talk is better than nothing". For ordinary people, how much they still It can make children have the ability to learn, and they can barely form their own personal connections in society. However, there is such a kind of social resources. Although they are extremely important, their distribution ratio is disparate to the point of horrifying. If other social resources are only "more and less" for the ordinary class, then this kind of problem Resources are simply the question of "with and without." In the process of solidification and differentiation of the social class, it can be said that it is indispensable, it is – traditional financial resources.

Let's take a look at the process of generating and allocating this kind of incremental funds. Generally speaking, the supply of money in the whole society is roughly determined by two factors, one is the base currency and the other is the currency multiplier. Among them, the decisive factor of the supply of basic money is the social value created by the economy, such as the income from the goods and services it provides. The factors that determine the currency multiplier are the various policies introduced by the regulatory agencies such as the central bank. The so-called “expansion/neutral/tightening monetary policy” we often see in financial news refers to a series of measures by the central bank to raise/flat/fall the money multiplier.

From this description, it is not difficult to see that for an economy, the money it produces comes mainly from two aspects: First, by the general public to provide various goods and services in the international market. The two earned are “printed” based on the base currency in order to maintain the smooth flow of social funds. Generally speaking, the cost of obtaining the former funds is very high. Only when you work hard can you earn them. The cost of acquiring the latter funds is very low. Just modify a few numbers on the account. Considering that the growth rate of M2 in many economies in recent years is higher than or even higher than the growth rate of GDP, it is not difficult to judge that a considerable part of the increase in currency is “printed” by the central bank. Non-ordinary classes "earn". For enterprises and individuals in these economies, if someone can obtain the right to use these ultra-low-cost funds, and want to achieve class crossing, fate reversal, not to mention immediate results, but also double the effect.

Dear readers, you can guess, is there really someone who has passed through this part of the resources and realized the class crossing? Whose use of this part of the extremely low-cost incremental currency, or even ownership, ultimately fell into the hands of it?

I am sorry, the answer is still – the elite.

The question is: how can the massive low-cost funds issued by the central bank flow into the pockets of the elite?

Specifically, there are two ways:

The first way is in the circulation of funds. By controlling financial institutions, the elite has eaten most of the funds "tolls."

As is known to all, the low-cost incremental funds “printed out” by the central bank require traditional financial institutions such as commercial banks to carry out circulation and docking in the process of circulation from the central bank to non-financial institutions. In the process, the latter A very lucrative profit can be obtained from it, and a considerable part of the investors and practitioners of these financial institutions come from the elite.

Figure: As a media circulation intermediary between the central bank and enterprises, the banking industry's ability to make money is breathtaking. In the 2018 Fortune China 500, 15 of the 20 Chinese companies with the highest profit margins were banks, and among the remaining 5 non-bank companies, the securities companies accounted for 3 more.

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In fact, if you are interested, you can check the curriculum vitae of the children of political and business elites in various countries. It is easy to find that unless there is a family heritage enterprise that needs to train the successors, quite a lot of wealthy children are studying at the top. The financial institutions, but after graduation, are not subordinate to the father's business, but work directly in the vital departments of financial institutions. When the central bank releases water to stimulate the economy, the elites behind these financial institutions will earn a lot of money. The children of the ordinary class, due to a series of reasons such as education and contacts, are often extremely difficult to get into the fate of the financial sector. Even if they enter financial institutions, many of them have to spend a lot of time on the peripheral hard work of the lobby manager or the front desk teller. As a result, it is naturally impossible to share the development dividend of the capital circulation.

The second way is the consumption (submission) of funds, and the large enterprises under the elite are more likely to obtain the right to use these low-cost funds.

This is actually a better understanding. Large companies have always been easier to finance from traditional financial institutions than small ones, which in turn makes the business more sustainable during the downturn or more aggressive during the boom period. Therefore, we can see that it is very normal for large enterprises to survive for hundreds of years, and small enterprises and even individual households who have lived for ten years will not dare to become old-fashioned. As for many startup companies, the average life expectancy is only 2.5 years. An important reason for this situation is that SMEs and individuals lack the necessary financial resources, so they can only rely on themselves when necessary. The cash reserves can only be borrowed through ordinary private loans, and the effect of the operation will be limited.

This is actually the secret of the traditional financial industry to aggravate the solidification of the class and even the division of the class. For the elite, in the period of solidarity, because they monopolize the right to use low-cost additional funds, the cost of obtaining funds is decreasing sequentially, while the ordinary class is just the opposite. They are even lower. The cost of the additional funds can not be found on the side, how to make money hard in the past, how hard to make money now. Even with the increase in social cash flow, the cost of acquiring the same purchasing power is often not increasing, and it will become more and more difficult in the future. This strong contrast is specific to real life, and it is expressed as a popular truth that many people agree with – that is, it is easier for the rich to make money, and it is increasingly difficult for the poor to make money.

Third, the cryptocurrency: the key to break the fate of the ordinary class

It is not an exaggeration to say that in the process of solidification of the hierarchy and even the widening gap between the rich and the poor, the impact of the allocation of financial resources may be the highest of all factors. If the social resources such as information, education, and connections are still barely distributed according to the "two-eighth law" or the "one-ninth law," then the capital resources are simply in accordance with the "1-99 law" or even "0.1- 99.9 Law" to distribute. As a result, the solidification and differentiation of the hierarchy is naturally natural. For example, a 2016 data shows that the top 1% of the wealthiest people in the United States have taken control of 38.9% of the nation's wealth. This extreme gap between the rich and the poor is largely due to the QE of the Fed for 10 years after 2008. In developed countries where the bottom-level public opinion still has a large influence and the tax adjustment effect is relatively obvious, many developing countries need not say much.

Figure: The Fed’s asset size rises. The central bank’s expansion has restored the economy to some extent, but it has also increased the differentiation of social class.

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Strictly speaking, people do not fail to notice the impact of the traditional financial industry on class solidification and differentiation. Under the efforts of all sectors of society, the financial industry ills mentioned above have improved in recent years. However, due to the limitations of the industry reform in terms of schedule, scope, and effect, it is certainly not enough to expect these limited financial resources to get rid of their own destiny. At least during the golden period of professional development, you can’t Count on them to achieve class crossing. However, fortunately, the financial changes we are facing now are not only from the “moderate improvement” like “inclusive loans”, but also have a “strong type” that will have a great impact on your destiny. Subversion" – that is, the author will focus on the introduction of the cryptocurrency in the future.

How can cryptocurrencies help ordinary people "squat the table"? The context of the answer to this question, in the second part of the previous, the author has spent a lot of time and energy costs to pave the way. Taking Bitcoin as an example, like traditional industry finance, it gives great opportunities to ordinary people in the two aspects of “funding consumption” and “funding”.

1. In the capital consumption link, the traditional financial system will distribute most of the funds to the elites. Due to the lack of traditional elites caused by information asymmetry, most of the bitcoin is difficult to mine, and the circulation price is low. At a lower time, distribution through various channels has been brought to the hands of the ordinary class (accurately, mainly the middle class of some idle money), so that these ordinary people gather a lot of wealth in an instant, thus completing the class crossing.

2, and the flow of funds is the same reason. In the process of bitcoin circulation from the "digital bank" of the mining pool to the ordinary investors, it is not the banks, brokers and other institutions that perform the information matching work. OTC dealers, as well as institutions such as digital currency exchanges, and these positions are theoretically unemployed – well, there are certain requirements for practicing qualifications and business levels, but at least there is no need to apply for a license. . As a result, many non-elite groups have enjoyed profit margins at the bank level from these businesses.

Figure: The cryptocurrency gives opportunities for ordinary people to cross in many ways.

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From the above two points, it is not difficult to understand why the peripheral areas related to Bitcoin, such as mining, currency, trading, or over-the-counter trading, can earn early participants. The pots are full, because they inadvertently enjoy the two financial rights that belong to the top elites – that is, the circulation and consumption of low-cost funds, if you consider the concept of "decentralized currency" in Bitcoin The currency price brought by the dividends has increased, and this money-making effect has been magnified by the index level.

Under such circumstances, the value cryptocurrency represented by bitcoin, through the fierce "financial affirmation" behavior, is likely to give the ordinary class the largest level of opportunity to cross the class in history. What needs to be pointed out is that the class crossing here is not the "one-way behavior" that many friends imagine, that is, the bottom-up "rich overnight", and it may be top-down "returning from poverty to poverty" ", that is, two-way crossing. Specifically: if the cut-in is right, the participants are likely to fly to the sky; and if they fail to make mistakes, they will burden themselves with unnecessary burdens; but if they are absent from this feast, they will only choose to be a bystander. People who have not invested in real estate for 20 years. In fact, for many people, the value of the cryptocurrency is no less important than the real estate in the first-tier cities of the past, and even to some extent, the value of its participation and the potential to be tapped may be greater than real estate. N times multiple. From this point of view, the cryptocurrency is likely to be a giant spree given by the times, and one of its main target audiences is those who are stunned by real estate opportunities.

Strictly speaking, cryptocurrency is not a perfect tier crossing scheme. Even those who have a loyal faith may roll over when the market is extremely irregular in the early days. However, the problem is that if you do not choose cryptocurrency, this What other options does a generation have? Do they still have to spend a few more years to find a new turning point in fate? Nothing, in this world, fleeting is not just an opportunity for the times, but also a short period of youth that has been enough to change its destiny for a few years.

Author: Sun vice president, Information This article first appeared Babbitt, reproduced shall retain the source.