Op-ed: Should I exchange one BTC for one month of labor?
Note: author of this op-ed is Huang Siliang. He is an opinion leader in the Chinese bitcoin circle. According to the official statistics, the average annual income of Chinese is 62,029 yuan, or ~5170 a month.
Chapter 0 Introduction
In the last three months, the price of Bitcoin has been climbing upward all the way. Meanwhile the government imposed various regulations time and time again. In this context, I have been asked by a lot of friends: is it appropriate to buy Bitcoin now?
Chapter 1 Government doesn’t like Bitcoin
Do not touch Bitcoin, which is the advice from lot of celebrities and media, especially mainstream ones. If you are a follower of mainstream media, such as the hard-copy newspaper, I believe you must have seen news about Bitcoin and you are advised to stay away from it.
They have three major arguments:
- High volatility
- Just a speculation tool
- Government would not allow Bitcoin to grow
These arguments are based on facts.
Volatility and speculation are two must-have features for anything to be an item of investment and shall be merits instead of bugs. Things without volatility would lose its charm. These should be common sense. Mainstream media advise people to stay away from the price fluctuations and speculative products as their target audience are those who have weak control over their own money. Those who could only allow positive return should stay away from assets with high volatility.
But Bitcoin is not just an asset of investment.
In the past two months, the PBoC tried very hard to interfere with the bitcoin market, which led to high volatility of price. This also confirms the reason why the mainstream media persuaded people to stay away from Bitcoin – the government would not allow Bitcoin to grow.
For the high-net-value celebrities, Bitcoin means nothing to them as their income and social status will ensure that they enjoy high quality financial services at all times. With 100 million dollar in bank account, they will be served with the best customer service in the bank. Any reasonable request will be entertained by the bank. However, they might need bitcoin when their fortune are going to confiscated by the country because Bitcoin is the most anti-regime property for now.
If you happens to be patriotic fans and recently likes to boycott Korean products, I don’t think you need Bitcoin as well. Because you believe that the government can protect everything that you own, and you also believe that there will be “no home without the country”. It’s natural for you to boycott something that your beloved government doesn’t like much.
If you are a monk that is satisfied with inner peace, Bitcoin is not your thing.
The core value of Bitcoin is that it is a kind of asset that really belongs to you. The real value of Bitcoin is a peer-to-peer currency. This is to say that Bitcoin allow two men to complete a transaction without the government backing or third party involvement. In other words, it is a property that is entirely of your own. The money you deposit in the bank and the property that you buy are actually in the custody of the bank and the state care, you can enjoy the essence of these wealth is the bank and the state also admitted. But Bitcoin does not need their recognition.
That is to say, if you are fond of liberty, you must like bitcoin.
Chapter 2 Bitcoin is indeed very expensive
At the price around 8000 apiece, bitcoin is equal to one month’s salary of most people. When you are going to exchange with something with one month of labor, it sure doesn’t look cheap.
The psychological movement of people who are always watching bitcoin price is like this: one feel regretful if the price goes up or lucky if price goes south. There is always a better entry point tomorrow and fear is always constant.
Regret and fear are the inevitable cost to be free. I have been there. I regret not having bought more when price goes up and fear the shrinking of my fortune when price goes down.
On the future of Bitcoin, I have strong belief that the following things will happen, which, of course, is only for your reference:
The government’s cash printer will not stop. There will be more and more RMB. This is the root cause why Satoshi creates Bitcoin, a digital currency that competes with the inflationary currency and cannot be shutdown even by force.
The popularity of Bitcoin is far from over. It is still the early age of digital currency adoption. Whenever we are talking about digital currency, we are talking about Bitcoin. Even at the current price of 8000 CNY, the number of wallet only amounts to millions. After the 21 million supply is securely locked by mathematics algorithm, the scarcity of Bitcoin will continue to exist in the long term.
I don’t see any potential rival to the leading role of Bitcoin in the cryptocurrency field. But I am also uncertain whether the situation remain unchanged in the future, at least I don’t see any challenger on the horizon. If you want to enter the domain of cryptocurrency, Bitcoin could never be circumvented.
Chapter 3 The government can suppress the price of Bitcoin
As the Chinese government further strengthens the supervision of Bitcoin, China’s major exchanges extends freezing of bitcoin withdrawal on Wednesday. Even Yunbi, the one exchange that insist on processing bitcoin withdrawal, succumbed yesterday. A vertical drop of 500 yuan was observed on Yunbi.
Unfortunately, if people are free to choose, Chinese may have more voice in the field of bitcoin with their hard-working spirit. The development of Bitcoin in China could have been faster and had the opportunity to become the center of the Bitcoin world. Unfortunately, Bitcoin looks evil in the eyes of the authority and it must be stopped.
The strength of market is very powerful. Capital is ubiquitous. As long as there is a tiny crack, capital will find its way in. The regulators can only suppress short-term price, the effect of which might be numbered in days.
Unless extreme measures are taken, like complete closure of exchanges, forcing all bitcoin transactions going underground; or mining farm are shut down and relocate overseas. This might have long-term effect.
You have to trust the instinctive craving for freedom of human being.
Chapter 4 Final words
Possession of Bitcoin is one way of having freedom, because Bitcoin can survive under mighty power.