Bitcoin cannot be copied
When we were little, we all knew that money didn't fall from the sky. On the other hand, we are implicitly believed by the church that this is not only possible, but also a normal, necessary and effective function of our economy. Before bitcoin, central banks around the world had this privilege. When bitcoin came out, every Tom, Dick and Harry seemed to think they could make money, too. Basically, it's a kind of hubris owned by everyone trying to copy bitcoin. Whether it's through consensus hard branching (bitcoin cash), cloning bitcoin (litecoin) or creating a new protocol with "better" function (Ethereum), each is trying to create a new currency form. If bitcoin can do it, why can't we?_DJMINER
In 2019, we witnessed the first monetization of economic commodities (bitcoin) in the free market for thousands of years. Many people don't stop to think about the importance of this reality, and don't understand how and why it exists, but ignore it to focus on some derivative or some improvement method of problems they didn't see at first. Everyone wants to get rich quickly. As long as there is money, there will be alchemists. Those who are trying to copy bitcoin are our alchemists today.
They said bitcoin was too slow, so they created a "faster" replica. They say bitcoin can't handle the scale of global economic transactions, so they created a replica with a "bigger" scale. Then they said bitcoin was too volatile to be a currency, so they created a "more stable" version. Such reproductions continue to be produced. Next, they said bitcoin was not very flexible and needed to be more programmable, so they created a "more flexible" version. They even said they were not creating money, but tools for "payments" or "utilities," or "gas powered world-class computers." They also try to convince us of a world of hundreds of currencies. But don't get me wrong. In each case, they try to issue their own currency._DJMINER
If the main (if not only) function of an asset is to exchange for other goods and services, and if there is no requirement for the income flow of a productive asset (such as a stock or bond), it must compete in monetary form, and if it has a reliable monetary attribute, it can store value. For each "functional" modification, those who tried to replicate bitcoin failed to understand the attributes that made bitcoin monetary. When bitcoin's software code is released, it's not a token. You can copy a code tomorrow, or create your own version with new features. People who don't use bitcoin as a currency will take the same attitude towards your version. With the passage of time, bitcoin has become a currency because the bitcoin network has developed some new features that were not available at first, and these features are almost impossible to replicate due to the existence of bitcoin.
As people in some countries around the world evaluate bitcoin and decide to store part of their wealth in it, these characteristics emerge spontaneously. As the value of bitcoin increases, it becomes decentralized. With its decentralization, it becomes more and more difficult to change the consensus rules of the network or make effective transactions invalid (often referred to as anti censorship). There is still a lot of debate about whether bitcoin is fully decentralized or anti censorship, but although it may be true, there are other things that have not been considered too much to discuss:
Whether understood or not, all other fiat currencies, commodity currencies or cryptocurrencies are competing for the same use cases as bitcoin, and the monetary system is often the only medium because its function is to have liquidity rather than consumption or production. When evaluating the money network, if there is a larger, more mobile and safer network as a feasible choice, it is unreasonable to store the value in a smaller, less mobile and less secure network.
If the holders of Venezuela's Bolivar or Argentine Peso could join the dollar system, they would. Similarly, anyone who chooses to speculate on bitcoin replicas has made unreasonable decisions to voluntarily choose to use a currency network with low liquidity and security. Although some money networks are larger and more liquid than today's bitcoin (for example, US dollar, euro, yen), the individuals who choose to store part of their wealth in bitcoin do so because they think bitcoin is safer (decentralization → unchecked restrictions → fixed supply → value storage). And because it is expected that others will also choose to join, thus increasing liquidity and trading partners._DJMINER
Many people who create digital money neither accept nor accept that what they create must be money to succeed. Others who speculate in these assets do not understand that the monetary system is often the only one, or naively believe that their currency can beat bitcoin. None of them can explain how their chosen digital currency is more decentralized, more resistant to censorship or more liquid than the Tete. Further, no other digital currency is likely to achieve the minimum degree of decentralization or anti censorship required to have a credible monetary policy. The following is quoted from the bitcoin standard:
Bitcoin is valuable not because it has specific functions, but because it realizes limited digital scarcity, through which it obtains value storage characteristics. The credibility of bitcoin scarcity (and monetary policy) exists only because it is decentralized and anti censorship, which has little to do with software. Overall, this will drive more adoption and more mobility, strengthening and enhancing the value of the bitcoin network. As part of this process, at the same time, people choose not to use low value money networks. Fundamentally, that's why the emerging attributes of bitcoin are almost impossible to replicate and why bitcoin can't be replicated or surpassed: because bitcoin already exists as an option, and its currency characteristics become stronger (and larger) over time, while the poor currency network is directly ignored.
You may never come to this conclusion without first forming your own understanding of the following: I) bitcoin is limited (how / why); ii) bitcoin is valuable because it is scarce; iii) the monetary system is often unique. You may come to a different conclusion, but this is the appropriate framework to consider when considering whether bitcoin can be copied (or exceeded) rather than based on any set of special functions. It's also important to realize that no one's conclusions, including yours or mine, have much impact. On the contrary, what matters is what the market consensus believes and the ability it gradually demonstrates as the most reliable long-term value store.
Empirical evidence (price mechanism and value) shows that despite the noise, the market continues to understand why bitcoin is different. Before speculating, try to understand why bitcoin is successful and why it is unique. When someone tells you something better or a different function than bitcoin, remember that in the past decade, facing the same choice of market, you have considered these trade-offs very rationally and chose bitcoin._DJMINER
An article by Nassim Taleb describes how a small number of paranoid people impose their preferences on the majority, and explains why the "most paranoid" win. Bitcoin (and the money system) is a perfect example of this. If a small number of people firmly believe that bitcoin has superior currency characteristics, and will not accept your digital (or traditional) currency form of currency, and the less convinced market participants accept bitcoin and other currencies at the same time, the paranoid few will win. This is exactly what is happening in the global digital currency hegemony competition. A few market participants have convinced themselves that bitcoin is the only viable option, rejecting the monetary characteristics of all other digital currencies, while most are willing to accept bitcoin with these people. Because of their paranoia, this small group is gradually forcing their preferences to the majority. In the digital currency world, choosing these people to diversify is the same as letting them (or the paranoid few) decide what your future currency is. Before you use your hard earned money to make speculative investments, evaluate these trade-offs and think about the minority rule. Money doesn't fall from the sky._DJMINER
In 2019, we witnessed the first monetization of economic commodities (bitcoin) in the free market for thousands of years. Many people don't stop to think about the importance of this reality, and don't understand how and why it exists, but ignore it to focus on some derivative or some improvement method of problems they didn't see at first. Everyone wants to get rich quickly. As long as there is money, there will be alchemists. Those who are trying to copy bitcoin are our alchemists today.
They said bitcoin was too slow, so they created a "faster" replica. They say bitcoin can't handle the scale of global economic transactions, so they created a replica with a "bigger" scale. Then they said bitcoin was too volatile to be a currency, so they created a "more stable" version. Such reproductions continue to be produced. Next, they said bitcoin was not very flexible and needed to be more programmable, so they created a "more flexible" version. They even said they were not creating money, but tools for "payments" or "utilities," or "gas powered world-class computers." They also try to convince us of a world of hundreds of currencies. But don't get me wrong. In each case, they try to issue their own currency._DJMINER
The value function of bitcoin
If the main (if not only) function of an asset is to exchange for other goods and services, and if there is no requirement for the income flow of a productive asset (such as a stock or bond), it must compete in monetary form, and if it has a reliable monetary attribute, it can store value. For each "functional" modification, those who tried to replicate bitcoin failed to understand the attributes that made bitcoin monetary. When bitcoin's software code is released, it's not a token. You can copy a code tomorrow, or create your own version with new features. People who don't use bitcoin as a currency will take the same attitude towards your version. With the passage of time, bitcoin has become a currency because the bitcoin network has developed some new features that were not available at first, and these features are almost impossible to replicate due to the existence of bitcoin.
As people in some countries around the world evaluate bitcoin and decide to store part of their wealth in it, these characteristics emerge spontaneously. As the value of bitcoin increases, it becomes decentralized. With its decentralization, it becomes more and more difficult to change the consensus rules of the network or make effective transactions invalid (often referred to as anti censorship). There is still a lot of debate about whether bitcoin is fully decentralized or anti censorship, but although it may be true, there are other things that have not been considered too much to discuss:
- 1. Compared with traditional currencies, other digital currencies or commodity currencies such as gold, bitcoin is by far the most decentralized and anti censorship monetary system in the world.
- 2. Bitcoin can generate value because it is decentralized and anti censorship. It is these features that guarantee and strengthen the reputation of bitcoin's 21 million fixed supply (i.e., why it is an effective way to store value).
- 3. With the increase of bitcoin value and the expansion of all levels of the network, bitcoin becomes more and more decentralized and anti censorship.
- 4. repetition.
The monetary system is often unique
Whether understood or not, all other fiat currencies, commodity currencies or cryptocurrencies are competing for the same use cases as bitcoin, and the monetary system is often the only medium because its function is to have liquidity rather than consumption or production. When evaluating the money network, if there is a larger, more mobile and safer network as a feasible choice, it is unreasonable to store the value in a smaller, less mobile and less secure network.
If the holders of Venezuela's Bolivar or Argentine Peso could join the dollar system, they would. Similarly, anyone who chooses to speculate on bitcoin replicas has made unreasonable decisions to voluntarily choose to use a currency network with low liquidity and security. Although some money networks are larger and more liquid than today's bitcoin (for example, US dollar, euro, yen), the individuals who choose to store part of their wealth in bitcoin do so because they think bitcoin is safer (decentralization → unchecked restrictions → fixed supply → value storage). And because it is expected that others will also choose to join, thus increasing liquidity and trading partners._DJMINER
Why bitcoin can't be copied
Many people who create digital money neither accept nor accept that what they create must be money to succeed. Others who speculate in these assets do not understand that the monetary system is often the only one, or naively believe that their currency can beat bitcoin. None of them can explain how their chosen digital currency is more decentralized, more resistant to censorship or more liquid than the Tete. Further, no other digital currency is likely to achieve the minimum degree of decentralization or anti censorship required to have a credible monetary policy. The following is quoted from the bitcoin standard:
Bitcoin is valuable not because it has specific functions, but because it realizes limited digital scarcity, through which it obtains value storage characteristics. The credibility of bitcoin scarcity (and monetary policy) exists only because it is decentralized and anti censorship, which has little to do with software. Overall, this will drive more adoption and more mobility, strengthening and enhancing the value of the bitcoin network. As part of this process, at the same time, people choose not to use low value money networks. Fundamentally, that's why the emerging attributes of bitcoin are almost impossible to replicate and why bitcoin can't be replicated or surpassed: because bitcoin already exists as an option, and its currency characteristics become stronger (and larger) over time, while the poor currency network is directly ignored.
You may never come to this conclusion without first forming your own understanding of the following: I) bitcoin is limited (how / why); ii) bitcoin is valuable because it is scarce; iii) the monetary system is often unique. You may come to a different conclusion, but this is the appropriate framework to consider when considering whether bitcoin can be copied (or exceeded) rather than based on any set of special functions. It's also important to realize that no one's conclusions, including yours or mine, have much impact. On the contrary, what matters is what the market consensus believes and the ability it gradually demonstrates as the most reliable long-term value store.
Empirical evidence (price mechanism and value) shows that despite the noise, the market continues to understand why bitcoin is different. Before speculating, try to understand why bitcoin is successful and why it is unique. When someone tells you something better or a different function than bitcoin, remember that in the past decade, facing the same choice of market, you have considered these trade-offs very rationally and chose bitcoin._DJMINER
Minority rule
An article by Nassim Taleb describes how a small number of paranoid people impose their preferences on the majority, and explains why the "most paranoid" win. Bitcoin (and the money system) is a perfect example of this. If a small number of people firmly believe that bitcoin has superior currency characteristics, and will not accept your digital (or traditional) currency form of currency, and the less convinced market participants accept bitcoin and other currencies at the same time, the paranoid few will win. This is exactly what is happening in the global digital currency hegemony competition. A few market participants have convinced themselves that bitcoin is the only viable option, rejecting the monetary characteristics of all other digital currencies, while most are willing to accept bitcoin with these people. Because of their paranoia, this small group is gradually forcing their preferences to the majority. In the digital currency world, choosing these people to diversify is the same as letting them (or the paranoid few) decide what your future currency is. Before you use your hard earned money to make speculative investments, evaluate these trade-offs and think about the minority rule. Money doesn't fall from the sky._DJMINER
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