The Essence of Currency is Imagining

After 2017 hot market, the development of digital money is becoming more and more attention, a variety of currency more and more, and the consequent controversy is increasingly fierce, that is said to be the world bank, digital gold, and some people say tulips, for a long time it seems to be worthless.

One thing is certain, however, that opportunity is born in doubt. When everyone agrees, the answer is clear and the opportunity is no longer there. So the best time to learn is now.

However, before discussing whether digital currency or bitcoin can be widely used in currency, we should solve a problem first——
What is money?

A famous economist once said that there are two ways of becoming money: one is a government endorsement, that is, French currency, and the two is that it has intrinsic value, such as gold, which circulates in the world because of its use.

But the answer, right, is not complete, he did not point out the reason why money is the essence of money, but only by enumerating the way to postpone the problem.

——Why the currency can be money? Is it because the decree has to be used under the bayonet?

——Why can it become money with practical value? Gold has good heat resistance, conductivity and ductility, but this is not the reason why it can sell US $1300 an ounce today.

The real reason lies in the above two ways. However, its underlying and universal causes are the real reasons——
Money is actually a kind of imagination.

《Homo Deus》says,

People are different from other animals in that they have the ability to imagine and imagine things that do not exist at all. Furthermore, human beings can not only imagine in their own universe, but also achieve common joint imagination with others, that is, "interconnected subjectivity".

And the essence of money is a kind of imagination -- you recognize it, accept it, and are willing to pay for products or services to recognize its purchasing power. You are the money.

At the mahjong table, the poker cards in the hands of the four people can be exchanged for cash. At this time the poker card is currency; when World of Warcraft is all over the world, it is said that many of the arms and drug transactions are settled in the interior of the orange, when the rare equipment in the game is money.

If there is any flaw in the above example, that is, the "territory" of the currency. Playing cards can only be circulated on the mahjong table, because it is only a joint imagination of four people; orange is only transferred among the players because it is only the combined imagination of the players of the game. In order to truly circulate in a wide range, more people need to participate in this joint imagination.

So how to establish and maintain this joint imagination? The way in the past thousands of years, that is, two points in the beginning of the article:

1.It is dependent on centralization of force, that is, legal tender; mandatory domestic citizen transactions can only be settled in this currency.
The government firmly controls the right to seigniorage, and all kinds of benefits follow. On the other hand, it is precisely because of the protection of force, 9 million 600 thousand square kilometers can not be lost(for China,my country), the users can naturally be accustomed to the "joint imagination", so do not have to worry about the invalidity of the currency.

2.Attached to valuable objects, such as gold and other precious metals.
In addition to having some objective properties, such as the use of the scene, not easy to wear, and storage, it also needs a prerequisite - the generation of people's mouth and ear, "love than Jin Jian", "thousand gold hard to buy", "the book has its own gold house"... Generation after generation of brainwashing, it has been molded into an everlasting IP.

These two ways have been popular for thousands of years until the maturity of technology and the emergence of a genius. His familiar name is Satoshi Nakamoto.

He relies on cryptography, distributed system, peer to peer network, transaction verification system and a series of technologies, and puts forward third unprecedented ways——

3.Attached to the objective criteria of common inspection criteria.

To sum up, to calculate a difficult mathematical problem and combine the solution link with the settlement of transactions and the issuance of new coins. The advantage of doing this is that there is a public standard from now on, no longer needs the center of high and high center to co-ordinate the overall situation, any node can be involved, the user itself is the system maintainer.