Today, I want to discuss three critical points. The first two are crucial investment strategies, and the third touches on the shortcomings and opportunities at this pivotal stage in global currency development.
1. The Simplicity and Difficulty of Bitcoin Investment
Is investing in Bitcoin difficult? Compared to stocks, it’s actually simpler.
Bitcoin is not a system; it’s merely a commodity. You only need to consider supply and demand, and there’s only one investment target, making the model extremely simple.
Investing in stocks means evaluating a specific system’s profitability, which requires assessing many parameters and factors with numerous investment targets, making the model complex.
Making money with Bitcoin is relatively easy. Almost everyone who isn’t greedy has made money, as its price has continuously risen, never disappointing investors.
Because this sector makes it easy to earn money, it triggers human nature—greed.
Those who haven’t made money in Bitcoin usually fall victim to greed. They want to make much money quickly and cannot control their greed.
As long as you’re not greedy, you will make money.
To succeed in investing in Bitcoin, you need to overcome two things. One is greed. The other is overcoming mainstream cultural indoctrination and independently understanding its underlying logic instead of dismissing it as a “Ponzi scheme” or “tulip bubble.”
Suppose you don’t understand its underlying logic. In that case, you can check my previous articles or watch Zhu Weisha’s video, “Inviting Satoshi Nakamoto, Welcoming a New World,” which explains it clearly:
I’ve had many experiences, starting as a civil servant, then becoming an entrepreneur with ups and downs, even spending time as a “business prison.”
The biggest obstacle was “culture.” How can you discern what opportunity and trash are when your eyes are covered, ears blocked, and mouth shut? Most people’s “operating systems” are flawed, leading to wrong decisions.
Usually, the following statements are factual:
If encouraged to do something, it means there’s a trap you need to fill.
If you are forbidden from doing something, you have a profit that others don’t want to share.
If asked to spare no expense, it means you are the expense.
If asked to consider the bigger picture, you are not part of that picture.
The U.S. has launched Bitcoin ETFs, followed by Hong Kong. Soon, countries worldwide will follow suit.
El Salvador has adopted Bitcoin as a legal tender, and Argentina is learning from it. Weak sovereign states will soon buy Bitcoin to avoid deep financial exploitation.
Trump has publicly supported cryptocurrencies in his election campaign, claiming that the web3 world will first be realized in the U.S., with no centralized digital dollar.
The Biden administration quickly approved the Ethereum ETF.
Independent candidate Robert F. Kennedy Jr. has always supported cryptocurrencies, advocating for decentralization and fairness.
Soon, we’ll realize that Bitcoin has become the fundamental asset measuring global economic development. It might be too expensive for us to afford.
Soros once said: “The history of economics is a series of events based on falsehoods and lies. To get rich, you have to recognize the falsehoods, invest in them, and exit before they are recognized by the public.”
Once the public fully recognizes it, it no longer offers an investment premium. We profit from the “cognitive gap.”
Therefore, investing in Bitcoin has two main challenges: overcoming greed and breaking free from indoctrination to gain true insight.
2. The Unity of Knowledge and Action in Investment
You know, I have studied the philosophy of mind extensively. My “Unity of Knowledge and Action” series on short video platforms has received widespread recognition. I’ve also released a course on “The Essence of Mind Philosophy.”
Wang Yangming’s “Breaking Three Bandits” theory is famous. Applied to the financial market, it involves three areas that need refining. Breaking them will lead to investment success, which I’ll share today:
Sitting in stillness to break the bandit of anxiety.
Gaining in loss to break the bandit of desire.
Practicing in matters to break the bandit of doubt.
Sitting in Stillness: Financial markets require patience. Sitting in stillness teaches you to wait, breaking your anxiety.
Gaining in Loss: In the market, during an upward trend, be willing to give; when others don’t want something if you understand its underlying value, be willing to hold it.
Practicing in Matters: Through the ups and downs of the market, practice to break the bandit of doubt.
3. Bitcoin’s Development Shortcomings
Let’s discuss shortcomings and opportunities at this pivotal stage in global currency development.
The value of items is divided into use value and exchange value. Air has value but no exchange value because it’s not scarce.
Scarcity determines exchange value. Bartering is inconvenient, hence the need for a common medium of exchange. The scarcer something is, the more valuable it is as a medium of exchange.
When gold’s value was too high, division became necessary, leading to the concept of gold content.
It required a standard, a measure of value. Gold, due to its characteristics, became that standard.
However, gold production matched economic growth, maintaining a balance. However, gold production constrained this balance. When an imbalance occurred, it led to deflation or inflation.
Our world needs a measure to gauge economic growth and specific items’ value.
Fiat currency was invented to overcome gold’s deflation, but it led to continuous inflation, justified as promoting economic growth.
It is a flawed logic—a variable ruler is a Ponzi scheme.
Satoshi Nakamoto invented Bitcoin to measure total economic output, likening it to gold. But Bitcoin alone isn’t enough. Bitcoin can equate to global economic output, rising as the economy grows.
However, it can’t simultaneously measure the values of specific, individual goods. Some goods increase in value with economic growth, while others do not.
Thus, we need a specific measure similar to fiat currency, but not fiat currency itself, to avoid exploitation by any country.
Bitcoin’s 15-year development has been slow because it lacks a good application. Practical applications require a “ruler.”
Creating applications is China’s forte. Currently, Zhu Weisha is developing a chainless financial system, providing Bitcoin with the needed ruler, using Bitcoin to gauge global economic growth, and replacing stablecoins with DW20 (Wei Dai Coin) for daily transactions. If successful, Bitcoin’s price could soar as Hal Finney predicted.
DW20 must evolve from an air coin to an asset coin, eventually becoming a stablecoin. This process will create wealth and social mobility for many.
It tests an individual’s cognition and judgment.
PS: I hold DW20. This article is not investment advice but a record of my financial understanding and observations.
For those interested in DW20 and the chainless platform, visit Zhu Weisha’s website for research articles (over 600,000 words) on chainless.hk.
Sincerely, Pupu May 28, 2024
