It is a more revolutionary invention than the payment network of the Internet age.

Original Author: Fernando Ulrich | Austrian School Economist, Brazilian Cryptocurrency Expert

Authorized translation: Carrie | Chain Hill Capital

Original link:

Original link:https://medium.com/@Ulrich_98986/bitcoin-as-the-ultimate-asset-e4707eaa8acc

This article is translated and reprinted by Chain Hill Capital authorized by Fernando Ulrich. For the reprinted translation, please contact the Chain Hill Capital (Qianfeng Capital) public account. The following is the translation:

This is the last article in this series of articles.

Using Bitcoin as a universal currency is not the smartest thing to do right now due to (broadly defined) transaction costs being too high. Its price remains volatile, illiquid, and in many cases throughput, confirmation times, and fees pose serious obstacles.

Usability issues can be resolved by improving technology, increasing capacity, and improving user experience. However, the volatility issue can only improve as adoption increases, which requires Bitcoin to be attractive, used as a cash balance, and held. This can be achieved if we manage to develop Bitcoin into a good store of value.

We have made related arguments with sound economics in previous articles. The willingness to hold money lies in its value (i.e. purchasing power). Therefore, being able to be used for payment is a consequence of the monetary value, not its cause.

The writings of Satoshi Nakamoto are not sacrosanct. But one thing he got right was the economics, and for a non-national fiat currency to have value, you have to have the right economics.Bitcoin can serve as a good store of value and medium of wealth transfer, and ultimately a universal currency that is both sound and stable. In fact, with a predictable, finite, and mathematically provable supply of the asset, it promises to be the hardest-core currency ever, scarcer than gold.

Censorship-resistant digital sound money is the foundation upon which all other applications are built.Payment networks, exponential capacity, off-chain asset issuance, distributed marketplaces, smart contracts, and decentralized applications offer endless possibilities. However, they all depend on a sound currency.

There are a number of reasons that separate Bitcoin from the rest of the cryptocurrency market. Among them, two factors are important and both reinforce each other. First, Bitcoin has a clear first-mover advantage. Network effects, while not insurmountable, create huge moats. Of course, the advantage of Bitcoin is not only in the wider user network and corresponding Metcalfe's law.

Second, only Bitcoin has been developed with a focus on enhancing and maintaining its utility as a store of value. Only Bitcoin has a firm attitude towards security and value preservation. Other cryptocurrencies don’t even realize that beating Bitcoin means beating it at the store of value function. And being a store of value is a game of confidence built in time and past history, so Bitcoin is the far and away only player in this race.

inevitable trendinevitable trend. From a technical perspective, there is also a tendency for a single protocol to survive as a single standard. Because cryptocurrencies are both currencies and protocols, the two reinforce each other. So, for Bitcoin, network effects are a monetary and technological phenomenon.

I am not advocating that all cryptocurrencies other than Bitcoin will go to zero anytime soon. The fact that many cryptocurrencies have value now does not invalidate my above argument. Because we are in the experimental stage, the market has not yet separated long-term potential from mere short-term speculation.

Finally, I present a final thought experiment here.

Gold has been a recognized useful commodity for millennia. Its properties are well known and understood by all. It is a chemical element with atomic number 79 and is considered the most malleable of all metals. It is still scarce, and to this day, no alchemist can replicate gold.

Now, what if chemists could "fork" gold by changing its appearance while retaining its key properties? turned it from a red-yellow metal with a density of 19.3 g/cm³ into an electronic and virtual. What used to require massive physical vaults with safes for secure storage, transported by trucks and ships, now requires only unforgeable digital cryptographic signatures (secure storage and transport).The nature of these technologies is that trying to break into a digital vault is much more expensive than defending against intruders, while allowing it to travel anywhere in the world at the speed of light.

Given this unrivaled security and utility at a fraction of the cost, isn't this forked gold even more valuable? Isn't it an advanced version of the original version?

If precious metals have been freely chosen by different societies through a gradual and competitive market process over the centuries, is it reasonable to imagine that the same would happen with gold, a technologically enhanced version that provides true monetary sovereignty?

Bitcoin forked gold. Although, in terms of monetary maturity, it is roughly equivalent to gold around 3000 BC. However, this avatar is growing exponentially. Given enough time, solid protocol development, and immutable social rules could make it an alternative to precious metals.

We're running a marathon, not a sprint. We are designing and building parallel monetary and financial systems for the digital age. It's monumental, it's historic. For those involved in this process, this comes with a huge responsibility.

Bitcoin hopes to replace gold as the reserve asset and the unified currency of the world. It is bigger than fiat currency and goes beyond mere payment networks in the internet age.

Supported by a professional team with multicultural backgrounds, members of the core departments - Investment Research Department, Trading Department, and Risk Control Department are all from well-known universities and institutions at home and abroad. They have a solid financial background, excellent investment research capabilities, and a keen sense of the market Sensitive ability, highly awe of the market and risks. The Investment Research Department combines rigorous basic research with mathematical and statistical models to obtain investment strategies such as "Pure Alpha" and "Smart Beta", and will soon export institutional-level research reports and project due diligence reports.

About Chain Hill Capital

Since its establishment in 2017, Chain Hill Capital (Qianfeng Capital) has focused on the value investment of global blockchain projects. It has created early-stage and growth-stage equity investments and encrypted digital asset investment matrices of Alpha Strategy and Beta Strategy. Global resource relationship network, strategic layout of Chicago, New York, Tokyo, Beijing, Shanghai, Shenzhen, Hong Kong, Xiamen and other city nodes. With a wealth of overseas investment institutions and a global high-quality project resource pool, it is an international blockchain venture capital fund.

Supported by a professional team with multicultural backgrounds, members of the core departments - Investment Research Department, Trading Department, and Risk Control Department are all from well-known universities and institutions at home and abroad. They have a solid financial background, excellent investment research capabilities, and a keen sense of the market Sensitive ability, highly awe of the market and risks. The Investment Research Department combines rigorous basic research with mathematical and statistical models to obtain investment strategies such as "Pure Alpha" and "Smart Beta", and will soon export institutional-level research reports and project due diligence reports.