The past life of money

Let us look at how we have developed in human history. In fact, human history has nothing to do with two things. One thing is the transmission of our information and the other is the transmission of value. The transmission of information is the beginning we shouted. Later, by writing a letter, and later by telegraph and telephone, and later by e-mail, we finally came to WeChat, that is, the revolution of the Internet has allowed us to pass on the information to the big bang. We have also walked thousands of miles recently. At the same time, we also have to pass on our values. One of the core tools that we use when we deliver value is the so-called currency.

Then the value, the value itself, the things in the world, we all say that there is value. What is the value? Value is a concept that is formed in people's minds. For example, hairy crabs are garbage in Germany. There is a need to clean up to throw it there. But in China, it becomes a kind of food. Then in the German community, the value of hairy crabs is almost zero, even negative. In China, it is food, so if you sell the crabs from Germany to China, you will earn money. In other words, this value is in different ethnic groups, different countries and different countries, he has different measurements. Therefore, in order to measure this thing, it is our ancestors that were originally exchanged for things. Later it was very inconvenient and needed a currency.

Then the currency, first of all, is formed from some geographical differences. Make a metaphor for the emperor and live at the beach. You live in the mountains. Where is the shell, by the sea. He must not be a shell used by people on the beach, it must be a shell in the mountains. Then what do you use to live in the mountains and use shells? Because there are rocks in the mountains, because the shells are scarce, they form value in the mountains. So first and foremost is because of something scarce. Everyone is used to expressing some kind of value with scarce things. This is the original primitive currency. However, these shells are too fragile and should not be preserved, so they have evolved. Metals are easier to divide than easy to save. In the metal currency, there is a natural weakness, that is, he will deflate his flow rate, and now it is slow, so that the economy of the world cannot develop quickly. After the Industrial Revolution, the metal currency will not It is too suitable for humans.

As a result, there were banknotes. The earliest in the world referred to Sichuan in China as the so-called “children”. The earliest in the Western society’s modernization of banknotes was first proposed by John Law in France and should be called. The first wave of banknotes appeared in France. The original paper money, in order to allow him to be stabilized, must be tied to the gold and silver that people have already established in their minds. In order to allow him to trade, but after binding with gold and silver, it still limits the entire range of liquidity, so do. By 1971, when the Bretton Woods system collapsed, the entire world became pure credit notes, and the "gold standard" has since withdrawn from the market.

However, pure credit paper money also has the trouble of pure credit paper money. Compared with metal money, pure credit paper money has the advantages of easy segmentation, easy preservation, easy portability, and easy turnover. And it's easy to activate the economy, but what's wrong with it? Its circulation is relatively determined by people. Therefore, inflation often occurs, which means that the so-called coinage tax brought by banknotes is the highest. Why is this why various countries are staring at inflation for financial regulation? In fact, from 1971 to today, pure credit notes have continued to increase for more than 40 years. With this kind of expansion, after the expansion of credit, its bubble accumulation has been very large. In 2008, it was a bubble burst.

What is the financial bubble and the financial crisis? We can tell you that this was the case. Before 1971, in the era of the gold standard, there was a cyclical economic crisis at that time, which meant that currency and economy were not matched with each other, leading to the results. The economic recession, but after the recession, I need a long time to recover. Later, after leaving the gold standard, we used financial means to avoid a large number of economic crises. The typical economic crisis in more than 40 years is not even greater. However, the financial crisis broke out periodically and a financial crisis broke out every ten years. It was actually a paper currency. It has a good effect on the economic crisis, but it has the side effect that the financial crisis is the credit expansion of the whole society, and then the cyclical collapse of asset prices.

After this asset price collapsed. So there is, in 2008, the encryption punk campaign, hoping to do electronic cryptocurrency, hoping to do this kind of decentralized will never increase, there will be no such electronic cryptocurrency currency, so Bitcoin came out. I am so embarrassed to talk about this history, I hope everyone. From the perspective of history from the perspective of the entire macro. Understanding how the entire social development trend is, that is to say that digital currency has emerged in history, he is an inevitable process. What people think of as currency is such a long-term trend of being virtual, easy to divide, easy to transmit, easy to save, and best not to be controlled by a single entity.

Next, I will share a few stories for everyone. In the metal era, I didn’t talk much about it. When we came to the era of paper money, many people said that Bitcoin was a tulip bubble. In fact, when the tulip bubble was only a few pounds, and a pound of high-priced tulip, it soared and plummeted. . What is actually more relevant to us is the Mississippi bubble. The Mississippi bubble was France, the bubble that brought humanity's first large-scale use of banknotes. It began when John Rao wrote a booklet that could be used by the future world. Then it was not accepted in the United Kingdom. Then France encountered financial difficulties. The Duke of Orleans asked John to come to the Chancellor of the Exchequer. He endorsed the national land and issued new banknotes. As a result, France entered a very prosperous scene overnight.

That is to say, the paper money has a very good influence on the economic prosperity and economically stable society, that is, people. People's economic turnover is fast, of course, of course, will get a lot of benefits, and then it. But this Duke of Orleans, he felt that the paper money was good. Did I make more money every day? Then I started over printing. After the over-printing, slowly there is not so much land to support the banknote. So I said that I was engaged in mining gold in a state in the middle of the United States. That is, in the central part of the United States today, there is no gold. Later, this lie was also punctured. As a result, the entire French banknote collapsed completely, and the first human banknote test failed. However, everyone at this time knew that bad news would be overprinted, but it would also promote economic development. After decades, a large number of countries have adopted banknotes.

As we all know, the first banknote in the world is endorsed by the land. When was the pure credit banknote issued? It did not appear in 1971. It was quoted by Americans in the Civil War, that is, the Lincoln notes issued by Lincoln. That is the first credit banknote the world has made. The so-called credit banknotes rely on the country. They use credit to endorse books, saying that my country controls the circulation, guarantees everyone’s safety, protects everyone’s well-being, and the armed forces of the country As his endorsement. For example. In the United Kingdom, the British Empire, his foundation was based on the pound in gold. From the very beginning, the United States was based on the gold dollar. Later, the dollar decoupled from the gold. It became a petroleum-based dollar, which means everyone. It is called petroleum dollar.

Later, when the Bretton Woods system collapsed, it meant that the world began to use credit notes. In fact, Satoshi Nakamoto had a birthday called April 5, 1975. His birthday is a matter of stress. What was 1975? It may be that Satoshi Satoshi is indeed the birthday of the day. On April 5th, it should be that he was laughing at the U.S. government. In order to save the economic crisis, the U.S. government had robbed the people and robbed the gold of the people. That is, the U.S. government introduced the policy on April 5th, 1933, and it is illegal for the people to hold gold. In this case, we can actually tell everyone that credit notes can be issued and gold can be robbed. The bitcoin cannot be added or robbed.

After our legal currency met our Internet, in fact, especially in China, we have rapidly developed into electronic money based on the information industry. In fact, the amount of banknotes we currently use in China is already swiftly declining, and then a large number of them are paid in electronic money. In fact, it already has the basic start of digital currency. So, believe the electronic currency on the currency. This itself is also an advancement to the next generation, and it is based on the letter currency. In fact, the turnover rate of our society will be higher and higher.

The higher the turnover rate, the easier it is for banks to expand credit, and then the people are more and more likely to borrow. However, the ushering in of the problem is that our actual inflation will be higher and higher. In fact, if we say that the impact of the currency increase on us, I have also seen a picture some time ago. In the past 40 years in the United States, the wealth of 10% of the richest people has been growing, and in the past few years, especially after 2008, there has been a tendency to accelerate, while the overall income of the common people, the actual income is in a continuous decline. In the process. For ordinary people, this day is getting worse and worse. This is actually due to the increase in the amount of this legal currency. The subsequent follow-up distribution is uneven, resulting in a huge problem.

With regard to these issues, everyone is thinking about how to solve it. how. In the United States, there has been an encrypted punk campaign or teaching in Chinese called encrypted punk. Directly called cyberpunk, we must not overlook the cultural and cultural circle of cyberpunk. He actually hopes to use technical and scientific means to solve many problems related to human society. So from the research on electronic cryptocurrency in the 1990s, Bitcoin was one of the ultimate achievements of this movement.

What is the blockchain?

So what exactly is the blockchain? Everyone often divides the currency circle and the chain link. Here, they are labeled. Heck, you also want to separate the coin and the chain. From my point of view, currency and chain are inseparable. Many of the blockchain technologies are old technologies. It is Nakamoto's genius to put them together to use the incentive mechanism of the currency inside. The whole system has been run up and quantified, so that means that we must look at the blockchain to see the currency and the chain together. What does the blockchain do? It is the lightest human collaboration tool, remembering that there was a Babel tower before humans. To the Tower of Heaven, the sky leads to the heavens. God can't see this, but there is a cable, so people have different languages and can't collaborate with each other. So people even if they scattered around, the Tongtian Tower is not repaired.

And for bitcoin, the blockchain that was started is, to a certain extent, doing a common collaboration and large-scale collaboration for everyone, because it is normal, that is, the new Babel, because the normal population cannot break through. One hundred and fifty acquaintances in the cooperative area. A normal manager is unable to break through the direct management of six to seven subordinates. But using this blockchain, we can use this kind of incentive mechanism to realize that although we don't know, but in the whole society, this collaborative boundary is infinite, so in fact, he completely changed our previous organizational structure, Social organization structure and many organizational structures, so it should be more from the humanities and. Observing and observing the blockchain from the perspective of economics to design the blockchain, rather than just designing the blockchain from a technical point of view. This is a misunderstanding of the blockchain practitioners we are currently encountering.

Blockchain economics

My next question, that is to say, since what we just said from the perspective of humanities and economics, then what is the economics of blockchain? Many of us may have learned microeconomics. Macroeconomics is what we used to quantitative Economics. No, blockchain is not based on quantitative economics. Blockchain is based on the combination of game theory and institutional economics. There is a well-known prisoner's dilemma in the game theory, that is, the two children were caught in the prison. Say everything, give it a few more years. No explanation, it may be released. One person confessed, one did not account for it, and the one who confessed it would be released directly. It does not confess to that person for many years. In that case, if there is no one to provide strings, basically everyone will explain. So this result is not the best result.

This theoretically requires non-cooperative game theory. So what kind of result is better, then we two people may have pulled the line. Two people know each other that they don’t know what they think and then finally get the best results. What is this line? The line that the blockchain does is to achieve the goal of mutual cooperation when people do not trust each other. This is its greatest value. And in this case, it is also very powerful to pass on values ​​without mutual trust. Then because everyone can pass values ​​without trust, it means that everyone’s trust costs are greatly reduced. After the trust cost is lowered, there will be problems. That is, the transaction cost is decreasing. According to the Coase Theorem conducted by the system, the first transaction cost is a good direction.

The Coase Theorem, Article 1, what was said, that is to say, the transaction costs fell. Then, when property rights are clear and the market has high degrees of freedom, social welfare is maximized. In other words, the transaction costs are reduced to zero and the market is very free, and then the property rights are very clear. The entire population is the highest earner, and the entire population has the highest level of happiness. Therefore, these two economic theories are what we call the basic economics theory of the Bitcoin blockchain. I hope everyone will be interested. You can go to see the related books of Game Theory and A Institutional Economics.

In fact, the development of our digital world did not begin today. Instead, it is our transaction costs. In our digitalization, we have also been promoting the Internet since 1995. The situation of our transaction costs that has been for a long time today is actually continuing to decline, right. Then, what kind of impact does this decline in transaction costs have on us?

Why in the history of the emergence of companies is actually equivalent to our humanity and we must do business together. We must take into account one of our transaction costs, that is, when partners go out to sea, if they say that they do not trust each other, if they say that the interests of the people are not bound. What will happen if this stuff goes out? Therefore, at the time, social transaction costs were so high that they did not trust each other, so the organization of a company allowed internal trust. To reduce the internal transaction costs, the company will make money. So this is why the company developed particularly fast when it was young. When the company is big, it will slowly meet the ceiling, which means that the company is big and it becomes a big society. His transaction costs and social transaction costs are even. It will no longer grow up.

Then everyone may also know the past two decades. There are a lot of companies that collapsed. Many large companies have fallen. Why, because of the development of our Internet, the cost of social transactions has dropped. And we had a six-space theory before anyone who knew every six people. I think that today has become a three-dimensional space in the WeChat era. Everyone at a time or two can know anyone. As a result, social transaction costs have fallen. However, the company's transaction costs are still there, so many companies do not adapt, and they lose out, which means you either have to dismantle your company or use new information technology to reduce the company's internal transaction costs, otherwise you The company can't survive. That's the theory of the company based on this transaction cost.

Then blockchain, in fact, it has a tendency to go company, which means that we can personally, personally carry out personal cooperation. That means coordinating everyone. For personal collaboration, then. Over time, we actually reduce the internal transaction costs of the company to a minimum and the social transaction costs will also become lower and lower.

The characteristics of the digital economy

1. Non-profitable
   Because of what, we have to reduce transaction costs to zero, and of course we must make any profits that are not profitable. All are manufacturing competitive advantages The so-called competitive advantage is the manufacture of competition. At the threshold of competitors' entry, you create a threshold for competition. For the entire society, it is the increase in transaction costs.
2. To corporateization
   After cooperating together, P2P, people-to-person collaboration, is to go corporatization. The second feature is the de-corporate
3. Security transfer value
   The third characteristic is that it is safe to use value and transfer value to our humanity.
4. Decentralization
   The fourth feature is that the most talked about is the decentralization of the blockchain. He is relatively speaking about its decentralization and makes the entire system more resilient.
5. Multi-centered
   However, the characteristics of our humanity make it impossible for us to go completely to the center. Human beings are all this multi-centered. It must be that even if you are completely decentralized today, tomorrow's differences with humanity, mental strength, and other factors will lead to it. 3, 6, 9 and so on will also lead to a variety of situations, so what? Decentralization is a relative concept that is a single point of balance between a single, absolutely centralized and fully decentralized decentralization.

Why is a digital system valuable?

So since we talked about this feature, I'll talk next about why a digital system is worth the money. He does not make money or make profits, and collaboration makes money. He makes money on tokens. Why? It is actually an agreement that we use internal economic principles to internalize all the cooperation of all our work. Therefore, in the first economic era, there is a difference. The Internet age is that the value of the agreement layer is not high. The application layer is of very high value. For example, BAT is hard-based. So today, there are many tokens of many diagrams that are applied. Application-type tokens are in my heart are to be greatly reduced. What is valuable, then, is that you can put the protocol layer of the blockchain era, that is to say, the large public chains like Bitcoin and Ethereum are all very valuable.

So should we use cryptocurrency anywhere?

Digital currency is rarely used everywhere. Actually, our legal currency has done a good job in resolving our exchange of goods. Therefore, I believe that the future number of digital currency will still appear in large numbers in normal exchanges. Now every country is also studying the number of digital coins in various countries. So I do not think that will be a substantial replacement. So. This encryption or what crypto currency is used is more suitable for use. Intangible assets, such transfers, such as human wisdom. In fact, today's human patents and human design talents must be indirectly achieved through material exchange. This, in fact, has caused many values ​​of human beings to be unresolved. In fact, human beings have been transformed by their hands in their own intellectual world. This is the greatest value.

Bitcoin has just created a miracle, that is to say, a bunch of lazy peasants have compiled a program and finally become wealthy. Therefore, the digital economy or blockchain is the most suitable for value transfer and value discovery of intangible assets. . Therefore, I must pay attention to this point. Compared with me, I am optimistic about the direction of the main operation of this type of intangible assets rather than the need to replace people’s homes with traditional thinking. Think it is inappropriate.

What is intangible assets, intangible value?

In fact, behind him is the value of the community. Everyone knows that we are very concerned about the community as a digital economy, but we build a community. Not everyone pulling a few WeChat groups is a community. Not so. At most, that's called WeChat Group. It's not called a community. The community is common in all people who share common interests. The best in the field is the more valuable the geek community is, the more valuable it is. Only in this way can everybody contribute to this dedication. So I think that the geek community is really valuable in this world. Are you a geek? Everyone is a geek. In fact, many people tell me that they are not geeks because they think that only technology is a geek. No, everyone is a geek. If you have a hobby you are a geek, if you like this No, you are really boring.

So geeks, for example, are all doing paintings. For example, they are all doing clothing. For example, they all do things. For example, they do food, OK, and this geek community. If I send a token, it represents the value of this collective community. This is a value. Another value is the value of numbers. The value of the community is first. What is the value of the value of the second number? It means that we are actually all people today. Generated data. We are not in our own hands. We are all in monopolized institutions and hands. Is this right, wrong? In fact, it is the data used by the direct monopoly organizations to make money again. We mentioned the concept of data sovereignty. In the future to the blockchain era, there must be a huge concept of data sovereignty, and then let the value of assets, data, and data generated by our data be truly reflected in the blockchain.

Well, from here, I will tell you about the development trend of blockchain. In the future, the so-called good blockchain projects are nothing more than three kinds:
One is that you really can represent the geek community.
One is data sovereignty that can represent a certain field.
One is a system that can realize value exchange well.

That is, these three areas, we can think about it carefully.