“The so-called “I don’t invest” means all in legal tender”: The instability of currency price is the biggest problem of Bitcoin?

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I have heard “The instability of the currency price is the biggest problem with Bitcoin” a hundred times, and I will expand the comments and analyze them.

Let’s first look at the assumption behind this statement. Subtext 1, if the currency price is stable, Bitcoin will improve a lot. Here comes the question, is “Bitcoin” with a stable currency price useful? Today, 12 years after Bitcoin came out, the world has discovered that encrypted stablecoins are very useful, but is stable Bitcoin still Bitcoin?


Bitcoin core value is different from US dollar

The second subtext is buried deeper, and there is a sentence “in terms of the dollar standard” in front of it. “All stability in the world is relative.” When someone says that Bitcoin is unstable, it must be a relative thing, but it is not mentioned in the daily context. It is the most powerful currency on the surface, the US dollar. Not talking about economics or physics, when we say that the cup on the table is stable, there is also a subtext, “relative to the earth”. For many, the dollar is the law of physics, even though it is only a few hundred years old and the logic of its minting has changed over and over again.

Six weeks after the explosion of Lehman Brothers in 2008, the Bitcoin white paper was published, depicting an unprecedented, completely different approach from the U.S. dollar and other fiat currencies, a transparent and orderly issuance of a new asset from the private sector. More than two months later, in January 2009, Bitcoin was officially launched. The first block, the so-called genesis block in industry terms, reads “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” [1] . We have no way of checking whether the folklore that Yue Fei’s mother tattooed “serve the country with loyalty” on his back is true, but the inventor of Bitcoin used the headline of “The Times” on its birth paper to accuse the national government of excessive currency issuance, but anyone can verified facts.

It can be seen that the core value of Bitcoin has been completely different from that of the U.S. dollar since Genesis. Rather than saying that the instability of Bitcoin’s price relative to the U.S. dollar is the biggest problem, it is better to say that it is its core value. Criticizing the unstable price of Bitcoin is like when Elon Musk made a car suitable for Mars, but you criticized that this car is not suitable for the roads of the earth.


A pure dollar standard is blinding

It is a fact that the basic needs of life are paid for in dollars or other fiat currencies, so there is nothing wrong with focusing on the profit and loss of the dollar standard, and I am not so far off the ground that I ignore these basic concepts. However, it is a blind spot not to realize that the dollar standard is just one of many ways to see things. It’s like we know the longitude and latitude coordinates of where we are, but we don’t know that there is a much wider universe beyond the earth, which is still unknown to human beings with a short history.

I think it’s too far-fetched, so I’ll come back to explain how the dollar standard can cause blindness in a daily context.

I just explained that when we say that stability is based on the dollar standard, even when we say “buy bitcoin”, it is also the dollar standard, because if we start from the bitcoin standard, it is “selling dollars.” If you don’t realize this, your perception will be missing a big piece. For example, when Bitcoin drops by 50% tomorrow, everyone will come to scold me. You see, Bitcoin has fallen; but if Bitcoin rises by 100% tomorrow , probably very few people say, you see, the dollar has fallen by 50% again. This is a lack of perception.


Looking at the world based on Bitcoin

To break through the above blind spots, try not to think in terms of “buying and selling”, but instead use “conversion”. Since we are talking about investment, capital is the idle assets that meet the basic needs of life. This part of the surplus must be stored in a certain type of asset, which is the so-called store of value. If you only know how to measure the return on investment based on the US dollar standard, it is a big mistake to think that you have not lost money if you keep the US dollar. In fact, this is the biggest gamble, all in dollars, and continuous losses without knowing it.


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