Many theories about Bitcoin are based on the view that Bitcoin is challenging the monetary system. In a limited way, it is. If many people start to use the dollar-priced digital currency for indirect netting instead of directly buying goods in dollars, this may affect the surface of the monetary system. I also use Bitcoin for netting transactions on many occasions. But make no mistake. Just as children exchanging balls for toys will not destroy the Federal Reserve system (all the dollars issued by the Federal Reserve are priced), exchanging dollar-denominated bitcoin for dollar-denominated goods will not fundamentally change the structure of the monetary system.
In fact, only when Bitcoin is priced in US dollars in the speculative market, the reciprocal transaction of cryptocurrency can be established, which in turn allows it to exchange with other items at the price of consumer goods market. This is fundamentally different from the actual monetary system used to establish relative value among different commodities in all markets. We can say that Bitcoin has a very high reciprocal transaction, which is not a trivial asset, and it is very useful. However, it is very important to be able to distinguish between “offset transaction” object and currency, and few people can do this now, which is why the media is full of stories about bitcoin as “currency”. Unlike football, which is obviously not money, Bitcoin is surrounded by currency language and brand packaging, and is pre-packaged into a currency myth (imagine a movable ball with a currency pattern attached to it). This makes Bitcoin easily confused with the actual currency.
Only when a child (or adult) holds Bitcoin and imagines how many goods can be bought in the supermarket, instead of thinking about how much money can be sold, Bitcoin will become a real currency. The key sign of money is that when you hold it, your mind will not think of money, but of goods on the shelf. At present, Bitcoin is just the opposite. It comes from the digital shelves of digital supermarkets, and then reminds people of dollars (or other currencies they use). This means that Bitcoin can be used for “offset transactions” instead of “purchases”. Finally, we use this theory to analyze the latest news in El Salvador. President Nayib Bukele of El Salvador claimed that Bitcoin was the “national currency” there. This is not true. Bukele is just pushing citizens to use Bitcoin for “offsetting transactions”. They don’t use bitcoin to set a “price” for goods. The currency price of Bitcoin is still based on the international speculative market (far from El Salvador and separated from local activities). But in stores in El Salvador, you can use Bitcoin to calculate the netting ratio with dollar-denominated goods (El Salvador uses dollars). Where are the miners going? Big miners choose North America, small miners choose Asia.
Where are the miners going? Big miners choose North America, small miners choose Asia.
For miners, they should choose Central Asia, with more countries closer to China. Why don’t they go to America? There are many inconveniences, the causes of the epidemic, the transportation in North America, and the huge difference in cost, so the small miners are basically in Central Asia or South Asia.
What are the impacts of miners going to sea? Mine input is lost, but computing power is expected to be decentralized.
Mining enterprises going to sea for related industries, first of all, infrastructure investment is a loss for many miners. Then, the mines have basically all stopped, which is also a loss for the local power enterprises.
If an industry needs to develop, it needs this investment. If it can’t be invested in China, many people’s capital investment will be transferred overseas. Then, everything related to blockchain technology research and development will lag behind, which will have a huge and far-reaching impact on the whole blockchain technology industry. It may lead to the extremely slow development of blockchain industry in China, and it may also lead to a high degree of development in North America or Central Asia. This is the aspect that I think has the greatest impact.
However, the mine built by myself, such as the abundant water mine built in Sichuan, has a great influence, and the mine cannot be electrified. From this point of view, I think we will speed up the construction and layout of overseas mines, and we will improve both hardware and software, and services.
However, going out to sea may have a positive impact on the decentralization of computing power. I have said before, how to decentralize computing power? In fact, it is de-Chinese. When all computing power is de-Chinese, computing power will be distributed all over the world. This allows all the people around the world who are interested in blockchain technology and Bitcoin to participate. The participation will be higher, and the promotion of blockchain technology will be faster.
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