Sunday , September 22 2019
Home / indonesia / When Bitcoin rusts in your mind

When Bitcoin rusts in your mind

Bitcoin is very difficult to understand unless we understand how money and banks work. The news reads the rupiah as a legitimate payment instrument. However, few can not answer this question: If the rupiah is a legitimate instrument of payment, then it is considered to have a value (value). Why then the rupiah has value? Bitcoin has grown to a high of Rp300 million, does that mean value? For us, the lack of understanding of the basic money mechanism is the beginning of the sinking of Bitcoin in your mind.

I asked this question to a student in Medan at a seminar recently. The student was just silent, unable to answer. There may have been a lot of speculation in his heart, but it did not come out of his mouth. A moment later, his friend said behind, trying to answer: Rupiah's money has value because Indonesia has declared it legitimate as a payment instrument in Indonesia. For example, paper money is quoted by the Governors of the Bank of Indonesia and the Minister of Finance. That's why rupees are worth.

In a way, the answer is very true. Money or any kind of object can have value because there is a "usage agreement" against it. Simply, that is true.

For example, a social consensus on gold. Gold as a valuable object, for example, because people agree about all its advantages compared to other types of minerals, including in comparison with money. Gold has not faded, can be easily worn anywhere, easily replaced for the hole, accepted globally in any part of the country, is seldom easy to buy and sell whenever and wherever. In terms of "purity", it is in gold. Therefore we call gold noble metal.

Gold is older than the era of human civilization, created by nature in the womb of the earth as a result of God's masterpiece. Gold obviously can not be a man because it comes from nature. People play a role only in mining and then sell it as valuable property. Both are aspects of shaping a special value of gold: they come from God of God and have to work hard to make it out of the womb.

There was a pure Gold Premium Premium Photography

The social consensus on gold was created for thousands of years, long before people knew the alphabet and served as a standard for paying goods and services in the past. Because of the value of the gold and the favor of the people, kings tried to take over, control gold, and limit his circulation in the community. Restrictions by the ruling party regulations are aspects coersif (force) against the weak side (subordination).

Does the gold circulation limit also contribute to the added value of gold? Yes, because they like authorities, businessmen and banks. The golden value in this context is obviously not "natural" because it is cut with the lowest human wishes: greedy. In this case the gold is different. It is necessary to separate the meaning from its value.

Since 1971, the US dollar (the original term is bill) is no longer related to the rare amount of gold deposits. Before that, the banknotes were actually some kind of "certificate" or "written agreement" that guarantees you have a physical gold in the bank and can be called back in gold. Since the currencies of other countries are based on US dollars, the real currency of the country is worthless.

Results figure for 1971 nixon no gold

Money is based only on state policy, in this case the central bank cooperates with the finance ministries and banks. Because American dollars and all modern money since 1972 are no longer "related"With gold the money does not actually have real value and is vulnerable to inflation." Clean modern money is based only on the law of demand and supply, the more dollars being used for trading, the higher the dollar value, however, the lack of physical goods behind it, the dollar and the rupee they are actually worthless.

The more money in the circulation, the more valuable money. There is no money fundamental value chiefly, namely, a genuine shame. Since money is based on state policy (the central bank and the finance ministry), this is called fiat novac. command (Latin) meaning: let it be done.

In practice command"That is, money is being built with the" debt principle ": money is created only when there is interest (interest) in borrowing and borrowing mechanisms. The money you hold in a bank, the bank has the right to the name of laws and regulations to lend much of your money to other parties. When a party returns the principal of the loan and the interest (it is worth it), then the interest is the new money that has created and absorbed the market (in the form of paper money and metal, and even electronic money that is commonly used today). Continues in a continuous cycle.

Lah, is not it, when I check the account book, the money still records? Yes, it was only recorded but moved to the other side. Lah, can not I withdraw money in cash? Yes you can. Indeed, that is the principle of work. The money you withdraw is new money from the previous debt.

Well, in the situation of a monetary crisis, and you and a large number of people need cash, does your bank allow it? Not. Not through narrator, not by ATM, because your money is on the other side, who lends money but does not return principal and interest. What is the central bank doing here? Yeah, just give up the money again. It is easy but actually increases circulation in the community, and increasing inflation, the price of goods also increases because the production of goods does not flow.

In endless situations like this, technology takes over again its role. In various paper money, the technology of printing machines has played a big part. Thanks to the inventor, Johannes Guttenberg.

Then, when computer technology is cloud all the more powerful, he has the role of creating an electronic form of money command it's easier and easier to send. Printing banknotes or metal is certainly expensive, not to mention the cost of shipping to other regions. So it is not surprising that the government has promoted the electronic money campaign for efficiency.

This is where money is easier to "bail," when you want to owe the bank, the bank simply type in your account. What you want and that is the amount of interest you have to pay back.

Also, with electronic enrichment, it's easier for governments to keep track of your financial activities while simultaneously reflecting your social activities. If the ruler is "good" (which is impossible), that does not matter. But what if the person behind can be corrupted? There was a crisis of confidence after the financial crisis in the future.

Bitcoin amid the economic chaos
Bitcoin is in the middle of the flow of change. He was born by Satoshi Nakamoto in the middle of the global economic chaos in 2008, He generates funds (referred to as electronic money systems) peer) that mimics gold features: rare, very limited quantities, which are periodically published, are easily transmitted over the Internet and are not controlled by a state or unity that dominates the system. He did not forget to imitate the mining process (mining) gold, where only large computer power have great chances of gaining a new Bitcoin prize. It's a real digital currency.

To emphasize its superiority, Satoshi has not forgotten to set up the system must be decentralized and open, where transaction data is identical on each computer and everyone can see the transaction flow. At the same time, the system is much safer.

In order to overcome hacking, periodic transaction data is stored in the "block" for 10 minutes. Each block stores the chronological order of the previous and subsequent block identities.

And this is indeed an absolute requirement for the electronic money system to be superior. If the mechanism remains centralized, there is no simulation of scarcity, value, and privilege. Then, it's hard not to be surprised what the virtue of blockchain, especially Bitcoin, is to preserve data. After you save the data on the blockchain, it is stored forever, can not be deleted. He is eternal.

Although Satoshi Nakamoto uses the many technologies that have ever existed, in fact Bitcoin is truly recognized as a superior technology that has never existed until there is human civilization. What is clear is that Satoshi successfully merged all the details of the "open cooking recipes".

Top quality when the economy softens
Based on research The latest gray tones, mark the magnitude of the crisis, can refer to degrees liquidity risk (the risk of a number of assets decreases considerably compared to the purchase price). One measurement component is the amount of debt in the financial system. Grayscale refers to the global debt ratio of 2018, which reached USD 250 trillion, and the debt ratio to gross domestic product (GDP) reaches more than 300 per cent. Clearly Grayscale, despite the decline in volatility over the last few years, but the liquidity risk is still high.

How is Bitcoin successful against the liquidity risk of another asset? Grayscale has the following five best examples.

Greek debt
The events of all banks in Greece were closed for 3 weeks in 2015, as more and more Greeks raised cash in cash. This is because the Greek government has failed to pay its foreign debt, and Greece wants to leave the European Union. The chaos is happening for up to three months. When most of the stock index and currency prices fell, Bitcoin could even print profits by 28 percent in the period from April 20 to July 10, 2015, while the remaining assets averaged less than 1.7 percent. Bitcoin competes only with a pound of 4.1 percent.

Yuan was weakened by the master
In August 2015 – December 2016, the Chinese central bank reduced its benchmark interest rate by 1.9 percent. But investors in the capital market in the country have already sold their risk assets. In the period from 20 August 2015 to 2020, Bitcoin achieved a yield of 53 percent (10 August – 20 January 2016). While other asset classes have an average of minus 10 percent. Since December 2016, the value of yuan has fallen by 11 percent against the US dollar. It is a buyer of Bitcoin to protect the value of money.

Sip "Brexit" in England
In Great Britain on June 24, 2016, the world was astonished when the results of the referendum showed that the British wanted to be separated from the European Union (Brexit). The day after the publication of the pound price fell to minus 8.1 percent, and the euro fell steadily to minus 2.4 percent. Meanwhile Bitcoin bullish with yields up to 7.1 percent. Bitcoin competes only with the COMEX gold price index, which is 4.7 percent and yen 3.9 percent. By the end of 2016 pounds and the euro continued to weaken.

It is obvious that Bitcoin is an antithesis of money command who does not have that value. Satoshi was very fond of the golden character and managed to create an electronic system that was imbued with the "scarcity" of the physical object. The lack of interest and ease of property transaction is also a natural interest of human beings. So it is no wonder Bitcoin is increasingly looking for private and institutional circles.

Above all, if the global economic crisis comes in the near future or maybe so predicted a number of parties comes in 2020, so this is a big risk for Bitcoin, whether the price will rise or vice versa.

Remember, Bitcoin is indeed superior when the economy deflates in a small extent, as Grayscale has shown. However, Bitcoin did not feel the serious wave of global scale, although it was born in 2008, the time of a very severe crisis. Era 2008-2009 was the era of the introduction of Bitcoin, born at the right time, as if to remind people of the next crisis.[[[[Red]

Follow our social media

Do you want to advertise? Click here

Source link