– Answering the concepts in the article “Invite Satoshi Nakamoto to Welcome the New World“
This section continues to discuss the characteristics of the basic concepts of the Bitcoin system and blockchain. Although the initial version of the Bitcoin system has only more than 10,000 lines, it is profound. It represents humanity’s advanced ideas and development direction. Technology involves as little detail as possible so that everyone can understand. This section focuses on currency and answers basic financial concepts to further supplement the answers to “Bitcoin Basic Concepts Q&A Part 4.”
Defects and innovations of currency
84. There are two basic requirements for a currency ruler:
- The ruler requires the scale to be constant.
- The ruler itself is objective to the measured object.
Whether it is legal currency or the gold, it is the unit of measurement for commodities and must satisfy the ruler’s invariance.
As human beings have come to this day, the definition of the function of currency is inaccurate and imperfect. All financial chaos arises from this. A ruler can only do the work of a ruler. Decision-makers make the ruler longer and shorter at one moment, which is a trick. The trick also creates theories and is labeled as orthodox through the Nobel Prize.
It is common sense that a ruler remains unchanged. Modifying the measurement results of the ruler is a liar’s behavior. Isn’t it nonsense to modify the economic theory that the scale of the currency ruler can be expanded by 2% every year? Isn’t it a liar?
Practice has proved that so far, no monetary system can achieve the requirements of the above two goals.
Is there an objective object that can measure the economy? Satoshi Nakamoto tried to make a ruler to measure economic development. It is the significance of Bitcoin. But he has a cognitive defect on the ruler issue.
85. The law of currency issuance
Currency issuance must be equal to economic development
The Fisher formula revealed the principle of currency issuance, and the mainstream economics community recognizes this point. Some people believe that moderate inflation is conducive to economic development, and this moderation is an annual inflation rate of 2%. As a result, the unit of account has continued to expand, forming the root cause of the bubble economy.
86. Neither the gold nor legal tender meets the law of currency issuance
Gold as a currency is constrained by mining and cannot equal economic development. The issuance of legal tender is based on feedback from economic data. Theoretically, it can reach equilibrium, but the measurement uncertainty principle constrains it and often produces an overshoot. Moreover, the amount of issuance itself is a 2% inflation model.
Inflation will reduce the actual income of those with fixed monetary income and reduce their actual living standards. Inflation will reduce the value of long-term savings and harm the interests of depositors. This is an obvious fact.
Keynesian theory has a positive significance in solving deflation. The economic crisis that broke out in many countries in the late 20th century showed the loopholes of Keynesian theory. It also gave birth to Bitcoin.
Currency issuance must be equal to economic development, which is impossible under the gold standard and legal tender mechanism. Legal tender has already started the Ponzi phenomenon and entered the end of its life.
87. Currency is not a means for the government to develop the economy
It is wrong for the government to use monetary policy for economic development. The government’s use of currency should be the same as the financial operation of the family, which is the principle of living within one’s means. Excessive borrowing is a risk for the family. Why can the country borrow excessively? Because it is possible to over-issue currency and arbitrarily modify the scale to avoid bankruptcy.
88. Employment is not a monetary problem
The employment problem is not a monetary problem but a problem that the government should solve. It should not be solved through inflation. Economic development should develop naturally when the monetary scale remains unchanged. Legislation should be enacted to prohibit the government from moving the scale. Basic social security should be achieved through taxation and private charity.
89. Currency is neutral
Monetary policy is not omnipotent. It can solve the liquidity crisis in the financial market, but it cannot fundamentally solve the problems of the real economy. As Friedman said when explaining stagflation, in the long run, currency is neutral.
90. Bitcoin standard
Only when currency issuance is equal to economic development can the value of this monetary system be achieved. Through the practice of blockchain stablecoins, humanity has finally found a Bitcoin standard solution.
In the Bitcoin standard, Bitcoin measures the total amount of the wealth, and as the total amount of the economy rises, it relies on market regulation to maintain synchronous growth with the economy. The DW20, which was invented later, overcame the defects of central issuance and became an objective scale with less volatility than the US dollar. See the DW20 white paper. DW20 is used as a ruler of the Bitcoin standard to measure specific commodities.
91. Money saves life
Under the Bitcoin standard, ]currency issue can only be used as a life-saving medicine, not as a means of conventional economic regulation. It can only be used to solve financial crises. For this, you can refer to the DW20 white paper, from the point-to-point cash system to the bubble-free financial system. The new world needs a financial ruler with an unchanging scale.
92. Reconstructing the financial theory system based on Bitcoin standard
In the eyes of Satoshi Nakamoto, the current financial and economic theories are ridiculous. However, since Bitcoin was not invented, legal currency is the optimal solution for humanity. With the emergence of Bitcoin, current monetary theory will no longer be needed in the future, and economics and financial theories will be rewritten.
The most important thing is to restore monetary neutrality. Do we humans have theories about rulers? There are only different rulers, such as tape measures and rulers. Scholars studying monetary theory are also among the unemployed.
93. Reorganization between countries
Countries will also go bankrupt, like families, and the failure of national operations will bear the consequences of enterprise bankruptcy. Countries will reorganize, just like corporate mergers and acquisitions.
The EU model serves as a compelling example. Many countries’ desire to join the EU underscores the appeal of reorganization and unity. It reminds us that reorganization between countries and the unity of humanity should be achieved through negotiation, not war.
94. Bitcoin standard is a financial revolution
Satoshi Nakamoto used the Internet correctly and laughed at the second bailout that the UK was about to start on January 3, 2009. He opened the door to a new world. The new world does not come instantly; it is a process that originated on January 9, 2009. It was the birth date of Bitcoin. The second node is a day in 2025, the birth date of the Bitcoin standard. We will officially launch the chainless platform that matches the Bitcoin standard. All articles are public and can be viewed on the chainless website. People from all walks of life are welcome to give us advice.
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