Author: Daii Source: mirror

Today's title is imitated from an article in the American Newsweek 30 years ago, "The Internet? Pooh! 》(The Internet?Bah!).

Today, Bitcoin fell below 80,000, and you will be quickly surrounded by various criticisms and doubts about Bitcoin. My article wants to play a little bit of the role of a vaccine, so you are not surprised.

Although the title of the article is a bit hilarious, the topic we are going to discuss today - economic demand - is very academic.

The reason I want to talk about this very academic topic is that a heavyweight expert took advantage of the opportunity of Bitcoin's sharp drop and used a very academic tone to say that "Bitcoin has no real economic need."

This expert is named Jürgen Schaaf and is an advisor to the European Central Bank. He said in an interview with Cointelegraph that "Bitcoin reserves at the level are a risky idea." Although it is reasonable to maintain reserves of energy resources such as oil and gas, "bitcoin has no real economic demand" because this cryptocurrency has no "actual economic necessity or related uses."

1. Bitcoin’s “small fall” echoes “no economic demand”

It is obvious that he said this to deny that Bitcoin can become a central bank reserve asset. Because, before, the president of the Czech Central Bank had expressed his views opposite to him.

Schaaf In order to support its own point of view, it also points out other shortcomings of Bitcoin, such as extreme volatility, possible illegal use, and susceptibility to manipulation. He believes that Bitcoin is not suitable as a central bank reserve asset because it cannot provide guarantees for currency stability and may instead encourage speculative behavior and wealth redistribution.

Jürgen Schaaf As an adviser to the European Central Bank, he has a deep financial background and extremely high authority. His views have attracted widespread attention in the industry, because he is not only the voice of a theorist, but also an important member of the European financial system. As one of the most important financial institutions in Europe, the European Central Bank's decisions and positions directly affect the economy of the entire euro zone, and Schaaf, as the bank's adviser, undoubtedly plays a pivotal role in currency and economic governance.

When he said this, Bitcoin had just fallen below 90,000 (February 25), and 2 days later (February 27), the price of Bitcoin fell below 85,000 again, and today (February 28), it fell below 80,000 again, which seemed to perfectly echo Schaaf's point of view.

But, I don't know if you noticed that Schaaf's assertion has a fundamental cognitive bias - he equates "economic demand" completely with the dependence of industrialized society on physical energy. His thinking still stays in the traditional paradigm of "oil is power" in the 20th century, but ignores the leap in demand in the era of digital civilization.

2. The value of Bitcoin comes from the new system

The emergence of Bitcoin is not to meet the traditional "use value", but to deconstruct and reconstruct the value consensus in the global economy. Bitcoin’s contribution to human civilization will far exceed that of oil.

Bitcoin is rewriting our definition of "demand", which represents not a dependence on physical energy or traditional financial instruments, but a deep need for trust, decentralization and security in the digital age. Just like when the Internet was first born, it was also questioned that it could not produce food, but it was the Internet that promoted global information circulation, innovation and economic development.

Bitcoin has created a value transfer system that can cross national boundaries, decentralize, and trustless value transfer system, which is almost unimaginable in the traditional monetary system.

Especially in the development, Bitcoin has become a financial haven for many people. Especially in the face of crises of hyperinflation and currency depreciation, many families have begun to save their wealth with Bitcoin.

In Argentina, the peso has depreciated rapidly in the past few years, and many people and businesses have chosen to convert funds into Bitcoin in order to cope with rising inflationary pressures. According to statistics, in Argentina, the penetration rate of Bitcoin has reached nearly 10%, while in Venezuela, this proportion is even higher, exceeding 20%. These numbersIt reflects the huge "economic demand" of Bitcoin for these people.

In Venezuela, an average family began investing in Bitcoin in 2016, and over the years, their funds have increased by more than 4,000%. Bitcoin helped them save the wealth that should have evaporated in the depreciation of currency, not only successfully, but also create opportunities for wealth to increase value.

In Nigeria, despite repeated adjustments to regulation of cryptocurrencies in Nigeria (including the bank ban in 2021 and the loosening of 2023), Bitcoin transaction volumes continue to grow, reflecting strong public demand for it. Of course, Nigeria was angry about this and sued Binance in its own court, claiming $79.5 billion.

Not only that, the decentralized nature of Bitcoin makes it have strong cross-border payment capabilities worldwide. According to data, between 2018 and 2023, the number of users of Bitcoin cross-border payments increased by more than 200%.

Of course, not everyone sees the potential of Bitcoin, just as the value of the Internet could not be recognized in 1995.

3. "Internet? Pooh! 》The famous article in the American Newsweek is famous for its pessimistic predictions about the Internet. He questioned the commercial potential and social value of the Internet and made the following specific criticisms:

"No online database can replace your daily newspaper." - Questioned the Internet's threat to traditional media.

"No CD-ROM can replace capable teachers." - Doubt the role of technology in education.

"No computer network will change how it works." - Denied the impact of the Internet.

"We are promised instant catalog shopping—just click to get a good deal. We will book air tickets online, book restaurants and negotiate sales contracts. The store will becomehour. So, why does my local mall have more business in one afternoon than the entire Internet handle in a month? ”——Questioning the feasibility of e-commerce.

Now, you already know that all the above criticisms have become reality.

Clifford Storr is the author of the article, an astronomer, who is 74 years old this year. Stor is not an old stubborn person. He reflected on his article as early as 2010 and admitted his mistakes.

I mention this article by Stor again today because it perfectly reflects the current critical logic of Bitcoin.

When ECB adviser Jürgen Schaaf declared that "bitcoin has no real economic demand", its essence is exactly the same as Stor's underlying thinking of denying the value of Internet business - a paradigm revolution that frames digital civilization with the "demand" of industrial civilization. Just as Stor could not imagine Amazon's trillion-dollar market value back then, traditional financial elites also found it difficult to understand how much productivity the new economic needs such as "censor-resistant transactions", "algorithm trust" and "time sovereignty" created by Bitcoin will stimulate.

Conclusion

History never repeats, but it always rhymes.

The value of all disruptive technologies will eventually lay a solid foundation for growth in the cracks of the old paradigm.

Bitcoin's plunge and doubts are just like the darkest moment when the Internet bubble bursts. In 2000, the Nasdaq index plummeted 78%, and Amazon's stock price shrank by 95%. The Wall Street Journal asserted that "e-commerce is destined to be a flash in the pan." But 24 years later, the global e-commerce transaction scale has exceeded $6 trillion, and Amazon's market value is 30 times the peak that year.

Price fluctuations never negate the value revolution, just as a tsunami cannot deny the existence of the ocean.

The steam engine brings not a faster carriage, but the entire railway era; Bitcoin does not change the existing currency, but a new value network based on mathematical consensus.

Stander-style misjudgment always reminds us:

The real power of technological revolution has never replaced anything but created a new world.