Tips for Change#
Bartering, Nuwa creating humans, Cangjie creating characters. Over five thousand years of history, countless legends have been forged. People started using shell coins as currency for transactions since the Xia Dynasty, and with the development of human civilization, metals, gold and silver, paper money...
Tips, this artificially created currency, is so novel, but also so niche. Why is money valuable? Why does it have purchasing power? It's because it has the backing of a country and is recognized by everyone.
Merchants passing through the town, scholars who come after hearing the news, reporters who join in the excitement, more and more people are discussing the value generated by this train. When the first person tries to exchange tips for food, his value is gradually recognized by the world.
When it is recognized by people, it has value. The more people recognize it, the more stable it becomes. This is the power of consensus. When it has enough value, it can be equated with fiat currency.
You can despise the ignorance of "calling a deer a horse," but what you cannot deny is that what people saw at that time was indeed a "horse."
- Tips: BTC
- Fiat currency: Currency issued by the government, RMB, USD...
Value#
Every item has value when it is recognized and trusted by people.
From the gift economy to bartering, the basic value of goods is maintained based on the environment and the previous consensus among people. This fairness continues to the later shell coins, and even paper money and the gold standard, which is also a form of distrust.
Why is money valuable?#
Currency as a medium of paper, how to reach consensus
Distrusting the value of the other party's currency, it is exchanged into gold at the local price. Because the consensus among people is the value of gold, this is the gold standard. Later, paper money became detached from the price of gold and became what is now called "fiat currency." The floating exchange rate system based on the market's supply and demand relationship is also the exchange rate commonly known to people now.
- The exchange rate system is not entirely determined by the market. Different countries have different strategies.
- BTC's transactions are based on the secondary market. Although it has a value system and exchanges with fiat currency in the secondary trading market, it is not recognized by most countries. (Many people say that BTC is a Ponzi scheme, which can also be understood as it lacking rules and endorsements with credibility, growing recklessly)
- Various countries are trying to promote orthodox digital currencies.