Editor's Note: This article comes fromBlockchain Camp (ID: blockchain_camp)Editor's Note: This article comes from
Blockchain Camp (ID: blockchain_camp)
, Author: BALAJI S. SRINIVASAN, Translator: Katie Gu, reprinted by Odaily with permission.
Bitcoin presents a precise encoding of the tech community's earlier hidden value, not just software but a hallmark of technology. Therefore, Bitcoin is bound to become the benchmark for technological progress in the 1920s.
To understand this better, we need to clarify what is "technology", what is "symbol", and why Bitcoin is a token. Next, let us read it together.
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But usually these are not fully displayed. To list them all, we will find that technology is international, capital, decentralized, hyperinflationary, Internet, encrypted, digital, unstable, ambitious, and reforming. And these are the nature of technology.
Bitcoin (cryptocurrency) presents its core value in code, and it is also an investment tool. Developers study the code, investors are attracted, and the value is reflected. If you believe in its value, you will want to buy Bitcoin.
Bitcoin: Intellectual Representation and Focus
Each flag has a specific meaning, some representing social movements. Let's say the Garson flag or the rainbow flag. In a sense, Bitcoin is also a banner, representing the code of the above-mentioned technological value, which is on the ideological level rather than the real thing.
There is also another introduction to Bitcoin becoming a banner: it is a kind of strength, and it is the appeal of the entrepreneurial community.
This appeal occurs when a community does not have a clear identity for itself. The classic example is when two people who don't know each other agree to meet in New York, with no time or place fixed. That way they have to guess what the other is thinking. Usually people meet at the information point at Central Station at 12 o'clock.
Similarly, if we randomly ask two people from the global technology community how to position the community, we will find that scientists from China and Russia may not agree with the value of Bitcoin.
For example, Twitter founder Jack Dorsey, LinkedIn founder Reed Hoffman, and Facebook executives Mark Anderson and Pete Thiel are all Bitcoin supporters. Likewise, Binance founder Changpeng Zhao, who is now Canadian, and Paul Durov of Telegram, who renounced their Chinese and Russian citizenships, respectively, are Bitcoin supporters. They come from different countries and have different backgrounds, but they all have the same belief in digital currency.
It's hard to get people to fully agree on something, if you think about the fact that the global tech community is no longer under Google or Facebook or WeChat or Yandex. Even if the founders respect the products of these companies, as capitalists, they are very sensitive to the future direction of economic development. What's good for Google isn't always good for you.
If technical personnel jointly develop an open source project, the material and monetary investment is less, and the quality of the result will be higher. Bitcoin has such characteristics.
For open source, the closest thing to Bitcoin is the Linux operating system. Like Linux, it can be profitable through Bitcoin and is not prone to crashes. For example, Google and Facebook are strong competitors, and they both cooperate on Linux. Because Linux is a decentralized system, no party can steal their contributions on it. Microsoft may also have its own operating system, but now it has to pay attention to Linux.
The same situation exists in the cryptocurrency community. Although many duplicates are developed in the technical community, it is not the same thing. No matter who starts a project in the community, people's first reaction is to know that it is Bitcoin, and they will believe that this project may also start with some cryptocurrencies. Whoever runs the exchange will be backed by Bitcoin. No matter who writes a guide to cryptocurrencies, they believe that there will always be users who know about Bitcoin.
Bitcoin has thus become the first choice for many and the second choice for many. This means that Bitcoin will become the first choice of the technology community. This is why Bitcoin has appeal and gathers some people with the same beliefs.
Bitcoin redefines the value of technology
But when the global tech community is working together to study Bitcoin, what exactly is it researching?
As mentioned above, we reveal the hidden value behind Bitcoin technology: international, capitalistic, decentralized, highly inflationary, Internet-style, encrypted, digital, unstable, ambitious, There are reform purposes. Let's explore them one by one.
globalization
Bitcoin and technology are inherently globally applicable.
The same is true for Bitcoin. There are millions of cryptocurrency traders all over the world, there are many offline Bitcoin meetups in every city, and every country is aware of the importance of cryptocurrency.
Capitalization
Capitalization
Bitcoin and technology are essentially products of capitalization.
Bitcoin is also about capital. Bitcoin is a distributed ledger, a speculative investment, the digitization of money, a cross-border transaction of property, and a risk return. Bitcoin has changed the entire economic development through the blockchain. So, Bitcoin itself is capitalized.
decentralized
decentralized
Both Bitcoin and technology are highly decentralized.
As Benedict Evans recently mentioned, the most important thing about technopoly is how much choice there is. The market map of any technology company has the same characteristics: in any industry, there are thousands of companies competing for the market. There are a large number of websites and five million startups on the AngelList website, as well as tens of thousands of angel investors and hundreds of thousands of venture capital management companies. There is no single option in technology, no one financier or platform is your only choice for success.
The same is true for Bitcoin, and cryptocurrencies more broadly. Satoshi Nakamoto designed that no miners could hack into its network to trade bitcoins. It is also known as a fully decentralized payment system without any servers and central supervision. However, there is still a long way to go in optimizing and improving decentralization. The entire ecosystem includes miners, nodes, exchanges, developers and investors. Each has a conflict of interest, and ideally none of them can ban Bitcoin.
Left: Types of Cryptocurrencies Right: Bitcoin Network Expansion Chart
There are also different levels of decentralization. There are many different approaches to consensus and privacy, but cryptocurrencies are not going away in thin air. The disadvantages of proof of work are not the same as those of proof of stake.
Therefore, when the global situation of cryptocurrencies is not good, Bitcoin can also survive the difficulties. We also expect more distributed ledgers of cryptocurrencies and Bitcoin to be incorporated on-chain. The Bitcoin distributed ledger has such a high replication ability because the ledger is owned by more than one person, so the data cannot be deleted at all, and the original network is closed, and the data will continue to be replicated.
severe inflation
Both Bitcoin and technology are highly inflationary, and the most important embodiment of technology is Moore's Law. There's a story about severe inflation: If the number of transistors on a wire doubles every two years, the cost of computing is cut in half over the same period. In other words, even with the inflation factor, the same price can buy more computing power tomorrow than today.
Not only computing power, but also prices plummeted in this industry due to different technologies. If we compare the different hardware installed on Apple mobile phones, we can see that the prices are different. We can think of this as quantitative, but if we compare the cost of viewing Wikipedia or Spotify (music player) to an encyclopedia or a hard drive. It can be found that it is obviously unrealistic for us to compare the long-term costs of TV, software and mobile phones involved in the company's technology development with areas that have not yet been involved in development (education, healthcare).
Bitcoin also suffers from severe inflation. The best investment choice in the 2010s was not only Bitcoin, but the US dollar has also continued to appreciate in value over the past decade. The past ten years have been nothing short of miraculous.
The performance of Bitcoin inflation and Moore's Law are complementary but different. If Moore's Law creates more value by reducing the cost of computing, Bitcoin captures value by avoiding inflation. Like the picture below:
If Bitcoin does succeed, BTC will become the new unit of account. This is also known as Bitcoin mainstreaming.
internet style
Bitcoin and technology are both based on the Internet.
Obviously the technology is web-based. It's about social networking, distributed cooperation, routing algorithms without geographic constraints. But at a deeper level, the geodesic distance between social networks becomes more important than the distance around the surface of the earth.
This is also the case with Bitcoin, or cryptocurrencies. Perhaps only 1 out of 100 people owns Bitcoin today, and the maximum number of people who own it does not exceed 50 million. The number of early Bitcoin holders is very small.
But actually through the network, we can bring these people together. No matter how far apart they are geographically, they all share the same beliefs, brought together by the power of the Internet. They can also choose not to use the currency issued by their country and have new options.
In this way, you can connect with anyone, and actually anyone can share bitcoin and technology with others through the Internet, which is completely different from the ancient times.
Encryption
Bitcoin and technology both have encryption.
Likewise, Bitcoin emerged as a result of a number of assumptions combined with the use of cryptography. Without concepts like public key encryption, digital signatures, hashing, hashcash systems, and concepts like SHA-256, PIPEMD-160, and secp256K1, Bitcoin would not have been viable. The underlying cryptographic framework needs to be able to express, transfer and secure funds, otherwise Satoshi Nakamoto's invention would not be possible.
Digitizing
Digitizing
Both Bitcoin and technology are digital.
Two more points to point out, the technology industry over the past 30 years has seen the emergence of e-books, e-magazines, digitized movies, e-news, photos, e-mail, advertisements, music, documents, radio, television, and other forms of media. Technology has digitized so many things we couldn't even believe in the 1880s, from fitness bracelets to favorite apps on your phone. Digitization makes it possible to copy, share, edit, and upgrade files.
Bitcoin, or more correctly cryptocurrency, is the next new phase of digitization. When the technology industry digitizes everything, knowing Satoshi Nakamoto believes that we have not fully realized the shortcomings of digitization. PayPal uses a centralized database to supplement the lack of digitization, but it does not do this in essence. Bitcoin's blockchain has changed everything.
Once people realize that Bitcoin's blockchain is a public database of people who hold cryptocurrencies in a cryptographically secure manner, they quickly understand that the same applies to digital stocks, bonds, commodities, financial derivatives, Each financial asset such as a loan. And, as technology digitizes, we will be able to develop new applications through secure digital finance, ranging from electronic identification, property rights, and even government systems.
instability
Both Bitcoin and technology are highly volatile.
There are only two kinds of ups and downs you can experience in a startup: excitement and fear. I've found that lack of sleep amplifies both of these conditions.
— Mark Anderson
Startups are volatile, and many startups fail. Failure is frowned upon, but budget is acceptable and possible. Venture capital is all about the laws of power, where a single investment succeeds and pays for all the other investments. Strong entrepreneurs can sometimes succeed, and patient long-term capital has the opportunity to win 1000 times returns.
The root cause of this situation is that the smaller the sample size, the larger the variance. When you only have ten employees, one person quitting can put the company in a bind. Conversely, if you only have 10 clients and it brings in a big deal, a single event can increase the company's revenue by 10%, attract key investment, and lead to long-term success for the business.
Bitcoin is also volatile. The price chart alone shows multiple 80-90% declines over the past decade and the number of failed Bitcoin startups is high. The same goes for the number of new Bitcoin millionaires. In many ways, Bitcoin is the world's first publicly traded hypergrowth startup.
Ambitious
Both Bitcoin and the technology are breathtaking, but very ambitious at heart.
Tech entrepreneurs are often mocked for their ambitions. But if no one believed that it was possible to build a spaceship, create an electric car, organize information around the world, or connect billions of people, we simply would not have the companies we have today. The power of technology is realistic ambition, rational ambition, ambition based on calculated risks and quantified upside.
Bitcoin's ambition is nothing more than to develop a new digital currency to compete with the US dollar. Ten years later, it's clear that every central bank and financial institution in the world has heard of Bitcoin. Now, with digital dollars at multiple scales, China most likely launching a blockchain-based digital currency, and Bitcoin ranking 40th in fiat market capitalization, it’s no surprise that Bitcoin has changed and It is possible to compete with the dollar.
But crazy to think that bitcoin could compete with the dollar in 2009. However, in the first communication after Satoshi released the white paper, it became clear that Hal Finney and Satoshi were both ambitious and ambitious. Hal calculated a scenario where each BTC is worth $10 million per coin:
As an interesting thought experiment, imagine that Bitcoin is successful and has become the primary payment system used around the world. Then the total value of money should be equal to the total value of all the wealth in the world. I found that current estimates of total global household wealth range from $100 trillion to $300 trillion. With 20 million coins, each coin is worth about $10 million.
So generating coins for pennies of computation time today could be a good bet with a payoff of about 100 million to 1! Even if the chances of Bitcoin succeeding to this degree are slim, are they really 100 million to 1?
He based his estimate on Fermi’s valuation on a series of logical premises, given that some believe Bitcoin will work on a technical level. Once Bitcoin's technology proved to work, and once others understood the premises, BTC took it to $10,000 per coin in its first decade. Of course, this is not yet $10 million, but a proxy for dollars. But as they say, the first billion dollars are the hardest.
revolutionary
Crucially, both Bitcoin and technology are revolutionary.
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what happens next
Likewise, Bitcoin is not about bringing about change through civil action. It was a web-based phenomenon that revolutionized monetary policy through billions of private actions rather than shouting slogans on street corners.
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what happens next
I believe that in the 2020s, as part of a broader international restructuring, the technology industry will finally align behind Bitcoin and cryptocurrencies. Cryptocurrencies simultaneously reflect many fundamental American values (e.g. freedom of expression, freedom of contract, freedom of community, protection against unreasonable search and seizure, the right to privacy, etc.), while also demonstrating broad international appeal to millions of people around the world .
Original link:
《Bitcoin becomes the Flag of Technology》
