Chapter 1: Misunderstandings and Truths About Decentralization
"Holdings are concentrated among early adopters, isn't this centralization? How is it decentralized?"
Confusion of Terms: Fundamental Lack of Understanding of "Decentralization"
People who fundamentally do not understand the "decentralization" of Bitcoin use the term indiscriminately.
Decentralization does not mean "how much Bitcoin is distributed."
Everyone Controls the Protocol = No One Controls It
Bitcoin is operated by numerous full nodes distributed worldwide. Therefore, it is impossible for someone to suddenly appear and arbitrarily change the rules (issuance amount, issuance schedule, etc.).
In other words, it should be understood that the entity governing the rules of the game is decentralized.
This is completely opposite to the "currency nationalism-based credit currencies" that have existed so far, including the current legal tender system.
Aren't we all holding our breath and watching what the person governing the rules of the game says?
Therefore
What Does Holding Have to Do With It?
The argument that "Bitcoin's decentralization has failed because Bitcoin holdings are centralized" is
-Weak version: A sound of confusing the term decentralization
-Strong version: A sound of not knowing anything about what Bitcoin is
The fact that a specific individual or institution holds a lot of Bitcoin
is irrelevant to the decentralization of the network.
Even, "concentration of holdings" is already a predicted phenomenon
Free Market Principles
The phenomenon of holdings being concentrated on a few is a result based on free market principles
If you make a choice that increases productivity, you get a reward,
If you make the opposite choice, you get a penalty, which is a natural process,
and bailouts distort this
If you discovered the value of Bitcoin early, worked hard to earn a lot of income,
or made the right investment decisions to increase corporate profits,
that is an economically correct choice.
It only stores as much value as it creates in society in more Bitcoin.
(If you don't like this, you can go to a country that divides it equally)
Centralization of holdings is
not only completely unrelated to the essence of Bitcoin decentralization
but it is not something that should not be, but rather a natural and predicted phenomenon
If you don't know, ask questions instead of making assumptions
Or, like the tweet quoted below (again), either stay quiet or try a transaction and then talk
Summary
Decentralization: Its essence lies in the impossibility of protocol control
Centralization of holdings: It is only a natural result of free market principles and is irrelevant to the decentralization of Bitcoin
If you don't know Bitcoin, ask questions.
If you're too proud to ask, stay still.
If you don't like that either, try a transaction
Chapter 3: Altcoins and Blockchain
"Wouldn't it be okay to buy some 'major alts' like Ethereum?"
You can buy it if you want to become a slave to the Ethereum founder (Vitalik Buterin) and the foundation. Staking or selling?
But that's not that important.
Whether you stake Ethereum that hit 0 and receive interest, or dump it, it's all fiat-like process
See the video below
Ethereum Original Sin Video:
Chapter 5: Freedom
"You keep saying freedom, freedom, freedom, but I'm curious about the exact connection between Bitcoin and freedom."
This is because it has realized the 'unalienable right, individual's right to private property,' which was only a theory.
Video link:
Chapter 6: CBDC
"I heard something about CBDC? What is that?"
What is CBDC?
CBDC is money that requires permission to use, dictating when, where, and how much you can spend. It's the ultimate culmination of socialist grand social experiments.
What is Bitcoin?
Bitcoin is the opposite, freedom money.
Chapter 7: Volatility and Currency
"To be used as currency, it has to be stable in value. Can Bitcoin, with its price fluctuating so much, really become currency?"
Is Value Stability a Condition for Currency?
A few counter-arguments reveal that [value stability] is not related to the conditions of currency.
"Is the value of 5,000 won last year the same as 5,000 won today?"
"Yesterday 1 dollar = 1400 won, today 1 dollar = 1350 won. Is this stable?"
Stages of Currency Development
Currency develops in the order of 1๏ธโฃvalue storage -> 2๏ธโฃmeans of payment -> 3๏ธโฃunit of account.
Bitcoin is currently between 1 and 2, and is excellently performing the first condition for becoming currency, "long-term value storage."
The reason why value storage is number 1 is because the core function of currency, exchange, presupposes a "future" transaction.
Why International Trade "Payment" Currency is Meaningless
While making a video that "the storage of value takes precedence over the medium of exchange" in currency, I discovered an interesting fact.
No matter what textbook or image data I looked for, there was no case where the storage of value was listed as number 1.
In most cases, it was even listed as number 3 at the bottom.
The details of this are already in the video,
In a word:
[After investing valuable current time, if you receive something to use for future exchanges, but its value is diluted naturally/arbitrarily,
Why would you receive it in the first place?]
can be summarized as.
This principle applies not only to economic activities between individuals but also to international trade.
If you keep looking at currency only as a [medium of exchange], it is easy to think like this.
"Hey~ BRICS doesn't use USD payments anymore!? They receive it in rubles!! They receive it in yuan!! Doesn't that mean the dollar hegemony is weakening?"
(Like the first thread image)
The fact that the [medium of exchange] aspect of currency is emphasized and deeply rooted in our minds is probably a product of Keynesian mainstream economics. (Brain-powered)
But currency is
0๏ธโฃ Collectible 1๏ธโฃ Value Storage 2๏ธโฃ Exchange Medium 3๏ธโฃ Measure of Value
goes through the stages of development.
In the meantime, when Saudi Arabia sold oil and China sold manufactured goods, they "settled in dollars."
But the important thing is what happens next.
What did you ultimately do with that dollar you received?
We have been holding US Treasuries to store value.
This is because you must hold this to use it as collateral in the international trade market and credit market.
But the devaluation of the dollar that has occurred over a long period of time (especially quantitative easing after the 2008 global financial crisis), and the recent rapid rise in interest rates?
The value of UST stored in the oil-selling vault was damaged.
In addition, the world witnessed the freezing of hundreds of billions of dollars in foreign currency assets after Russia's invasion of Ukraine.
So, "Wow~ I can't trust the dollar anymore!! I have to settle in yuan when selling oil. And I have to hold Chinese yuan bonds instead of US Treasuries." Would you say?
Or, "Wow...there's no one to trust anymore...shi brrr...what should I have..." Would you say?
(Judgment is up to you...) Good tweet to refer to:
Chapter 9: Do the rich get richer and the poor get poorer?
"I get it! But anyway, in conclusion, in the future, the rich get richer, right?"
Not at all.
The fact that once someone is rich, they stay rich, and the ladder is kicked away is a [distortion created by the credit currency system].
Bitcoin is a system where constant turnover is inevitable.
Left-wing Islam sticker
If you make this claim, you're likely to get labeled as "left-wing Islam."
"Bitcoin is unfair because it's concentrated somewhere/with someone anyway!!"
PoS-centric Fiat System
Conclusion: Being soaked in a PoS-centric fiat system makes you think the opposite.
Unable to build your own life due to the lack of a ladder,
A bizarre structure where you have to rely on parents, the state, or others.
That's the current fiat system.
Bitcoin is a solution to restore that collapsed ladder.
Constant Change of Hands
Those who make claims of equality of outcome like the above should keep in mind
"The fact that there is a constant change of hands in Bitcoin"
[The idea that once monopolized wealth will be held forever,
That there will be no ladder] -> All of this is fiat-centric thinking (POS)
POW vs POS
On the other hand, Bitcoin is POW.
There is always a ladder for those who do POW,
And no one can kick away this ladder.
For example, what does it matter if BlackRock or Saylor gets 500,000/1 million?
Saylor will die someday.
Strategy will eventually falter or the business will fail.
Because humans are imperfect and life is finite.
When that happens, the Bitcoins they worked hard to collect are released into the market,
And go into the hands of those who worked hard on POW.
If you think this is a problem, you need to remove the ghost of socialism from your brain, not Bitcoin.
But what about the current fiat system?
Bailouts happen!
Because it's POS, not POW, once monopolized power/wealth continues forever without changing hands.
If you don't understand this, I'll call you an ooga booga.
Chapter 10: Mining Costs and Network Sustainability
"If the mining reward halves every 4 years, miners won't be able to break even and will go bankrupt! Does that mean the price has to skyrocket by 2x? And the mining reward becomes 0 in 2140? Will they survive on fees alone?"
That argument is a tautological fallacy: [Bitcoin will fail because it will fail]
[A typical case of Stage 0, failing to recognize Bitcoin demand]
โBaseball games are becoming so advanced that it must be really hard for the players to play.
It's so hard, will humanity still play baseball in 100 years? And the tickets are too expensive!โ
How does that sound? Doesn't it sound really stupid?
If people still come to watch baseball in 100 years, the sport will still be around then.
When thinking about the perpetuity of something, what's important is not: - Does it require a lot of cost? - Does it require a lot of effort? things like that.
[Does this sport provide enough utility to people?]
In other words,
- If the human demand for a product is sustainable - If that product is valuable to humanity
Producers (players, coaches, etc.) will work hard to create this product for consumers (spectators) who want it.
The same goes for Bitcoin.
Anyway, the idea that "Bitcoin's security is at risk because of mining costs" is such an outdated topic.
Even Satoshi might see it as a cute "Eureka play"... kind of.
Satoshi himself already answered all of this back in November 2008 (before the network was even running).
Let's not make arguments disguised as questions.
Chapter 11: Bitcoin and Taxes
1
Basic Understanding of Taxes
There is no tax item called "holding tax." It is just an expression used colloquially.
What actually exists is property tax. First, check why that tax exists and where it is levied. And then think about whether there is any logic to apply this to Bitcoin.
Capital gains tax is already defined institutionally. Bitcoin is no exception. Conversely, there is no problem unless you convert it to Korean Won.
2
Game Theory Between Countries
If country A makes it difficult to live with Bitcoin, capital will flow out to country B, which treats it well! (Which country is already doing that? ๐จ๐ณ)
Then the question of the tax naysayers changes like this.
"Ah... then is it highly likely that Korea will become increasingly hostile to Bitcoin? Then isn't acquiring real estate becoming an increasingly irrational choice?"
In conclusion
I hope this material reaches those who have had difficulty accessing the numerous misunderstandings and misinformation about Bitcoin.It's rotten rice cake, but thank you, Ms. Netddalbah, for organizing it.It's rotten rice cake, but I hope those who see it for the first time will gain something.
Original author: Ms. Netddalbah (@nldd21)
Bitcoinโก๏ธStake War
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