Who is Yuan Wei?
- One of the seven writers of the book Bitcoin;
- Computer major at college;
- Stock enthusiast for years;
- A tech-savvy;
- Never sell one bitcoin in the past 4 years.
How has my Attitude to bitcoin changed as I’ve learnt more about it?
I always believe that we should hold bitcoin for long, but my understanding about bitcoin has changed.
On May 2013, this is how I told people what bitcoin is.
“Bitcoin is a revolutionary technology and it is the money of future. “
However, in 2016, I realized that bitcoin is actually anti-human. It will never and must not be a mainstream currency.
Bitcoin belongs to digital or virtual precious metal. In the long term (10 to 50 years), bitcoin price will be going up stably. It can also be understood as a global development index fund, representing the average level of global development, which is also going up. It is undoubtedly worth holding, but if you take it as a world currency, it would be nonsense.
Here I’m not going to talk more about the greatness of bitcoin. You can just google it.
I will focus on why bitcoin is anti-human.
History has repeatedly showed us a clear link between inequality and social instability. We are not asking for absolute equality, but it would be catastrophic if you reach a breaking point. And what is most likely to cause inequality? The answer would be when means of production (with a fixed amount) are owned privately by a small class. This is what we learned from the history of class struggles.
Anything that is fixed will lead to the 80/20 rule and thus widens the gap between rich and poor. For example, everyone in the world has 100 acres of land to be self-sufficient. Let’s just say one day A gets sick and must lie in bed for two weeks. So he sells 20 acres of land to B for food. As a result, the new ratio becomes 80: 120.
What does this mean? A gets more vulnerable to risks and B enhances his anti-risk capacity. With 120 acres of land, B can not only feed himself, but begins to store surplus grain. A, however, has only 80 acres of land, he can hardly feed himself and is getting weaker.
5 years later, both A and B get sick. B has surplus food and he doesn’t have to sell his land, but A can do nothing but sell land again. This time he sells 20 acres and now the new ratio is 60: 140 …… This goes on and on. As we can see, once the balance is broken, as the total amount remains the same, the result is bound to B has more land than A.
This is a zero-sum game. If A suffers a loss, he will become less competitive and thus become more vulnerable to losses. On the contrary, B will become more competitive.
Means of production
Means of production such as labor forces, land and capital are indispensable for any mode of production. They are basic needs for human survival. We should make clear the difference between “means of production” and “personal property”. Many people confuse the two and demonize public ownership.
As the land now belongs to B’s personal property, you cannot reallocate the land or do some adjustments about it. You could only expect that trickle-down effect and charity will narrow the gap between A and B. But history tells us that neither of them is effective enough to remedy the widening wealth gap.
Put simply, because of fixed amount, the 80/20 rule is a must-be. Because it is the means of production, so no one can live without them. Because of private ownership, the rich do not have to be responsible for the poor. Therefore, everyone will be enslaved by private capital in a world where the total number of currency is fixed, which will worsen inequalities.
Therefore, if Bitcoin becomes the world currency, it will inevitably lead to the polarization of wealth and cause social unrest. This is exactly why gold, silver and other commodities are no longer used as currency and we are now in the age of credit money.
I assume that some people would say gold and silver are real money, and credit currency is nothing but a means by which the government enslaves the people and deprive them of their wealth. It only indicates that these people know nothing about finance. Hypothetically, A has 10 dollars and B has 10,000 dollars and the total wealth of society are 10010 dollars. Then the government slowly issues another 10010 dollars and ideally A gets 5015 dollars and B gets 15005. Now can you tell the gap between A and B gets smaller or bigger?
It may be said that the modern banking system is the very scourge behind the gap between rich and poor. Bank loans causes an increase of inflation. That’s true, but don’t forget that when inflation is caused by loans, banks tend to lend money to the rich first and when the poor get the money, its value has depreciated. This indeed has caused the polarization between rich and poor. However, inflation can also be caused by infrastructure improvement. For instance, making water, electricity, communications, the Internet, healthcare and education available to the poor in remote areas, which is common in welfare states in Northern Europe and socialist country like China, but is rare in Anglo-American capitalist countries.
- Bitcoin in its very nature is anti-human society, it must not be a world currency.
- Bitcoin is the world’s first decentralized digital currency, which has made it historic and unique. This is extremely important to long-term investment in bitcoin.
- The total number of bitcoin is fixed. Anyone anywhere in the world can buy it and plus its uniqueness, it will keep creating an upward trend.
PS: Don’t invest in Bitcoin now as the price is skyrocketing. Buy bitcoin when it slumps and regularly invest in it once every quarter. In other words, the best timing is when you see such negative media coverage as:
“Those miserable bitcoin investors.”
” I pity those bankrupted bitcoiners.”
” Bitcoin: worst investment of the year. “
Bitcoin is worth holding for a long time, but it will not disrupt world economy or the current monetary system. Don’t even think about it.
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