Many people think that the reason Bitcoin is valuable is that it is a “rarity”, and if Bitcoin is no longer “rare”, then it has no value.
This is a misunderstanding. Let’s think about a question. What is the essence of all “currency”?
The answer is trust. The most valuable reason for the U.S. dollar is because of the credibility established for the U.S. dollar under the Bretton Woods Agreement, rather than the so-called equivalent exchange with gold.
If we talk about other currencies like the renminbi (currency of China), the main reason why the renminbi is valuable is because of the trust system of the renminbi in China and neighboring countries, rather than exchange with the US dollar reserves. This can explain why the currencies of some countries (such as the Russian ruble, and the Zimbabwe dollar, as you all know) have greatly depreciated because the government and the current world situation have led to a trust system that does not support the existence of this currency, so-called economic sanctions, and currency speculation is a superficial cause.
The essence of money is trust.
So, what about Bitcoin?
Bitcoin as a currency does not have a centralized trust measurement agency. The value of Bitcoin, that is, its “credit system”, comes from the distrust of centralized units. Every country finds that the seigniorage is too easy to collect. Drinking a dove to quench thirst has led to a worsening of trust between countries, and even the people of all countries themselves have no trust in the national currency.
Trust, like quality, is conserved. As the trust in centralized currencies decreases, the trust in decentralized currencies naturally increases.
This is the essential reason why the value of Bitcoin continues to increase. Therefore, for digital currencies such as Bitcoin, there are only two endings.
- Either countries want to understand that they no longer issue excessive currencies and increase currency issuance in a scientific and reasonable way, and countries have a unified and stable exchange rate and maintain a centralized currency credit system. The value of currency such as Bitcoin will be infinitely close to zero.
- Either countries continue to drink pigeons to quench their thirst and use the method of over-issuing currency to give everyone collects seigniorage tax, then the trust in the centralized currency will become lower and lower. The total value of Bitcoin, a decentralized currency, will be infinitely close to all units that do not trust the government and other governments but need to conduct international trade. The total value of labor production.
Either the price is crazy high, or it is worthless.
Then you understand this, and then you can answer this question. Will Bitcoin be replaced by other digital currencies?
Liars such as XYZ, even the old king next door can come and say “I spent 10 minutes changing the core of Bitcoin and created a new digital currency called SBC. SBs come and participate in my ICO. I pay seigniorage~”. So, if this happens, will you immediately choose to use the SBC of the next door Pharaoh?
The answer is that some speculators will participate, but the market will not participate. The reason is simple. The new cryptocurrency has not been recognized by the market, and the application has not been produced. There is no way for this currency to exchange for the means of production. Then this currency is not currency, but a virtual commodity for speculation. In other words, even if the next door Pharaoh ICOs an SBC, no one will choose this coin except for those brainless speculators.
In the current market, there are indeed many other digital currencies such as Ethereum, EOS, XRP, etc. They may have technical advantages in some aspects (in fact, BTC has also been evolving, and it will also learn from other digital currencies that have been marketed successfully. Proof of advanced technology, coins such as LTC can be said to be experimental coins of BTC’s advanced technology.), there may be more application scenarios than BTC in the future, but they will not be able to challenge the status of BTC, and BTC will always be the currency. The first consensus is the belief of many people that BTC will exist as a currency market gold for a long time, not a digital currency mainly used for circulation.