Answer a big question from a kid friend

Author: Weisha Zhu

——Answers to the concepts in the article "Invite Satoshi Nakamoto to Welcome the New World"

Questioner: Robin. Graduated from the junior class of the University of Science and Technology of China and studied in the United States.

Currently the general manager of the payment system of ISUNOEN (https://www.isun1.com).

The feature of ISUNOEN products is the interface between fiat currency and encrypted currency.

Robin, I would like to ask a list of questions for you.

1. Macroeconomic outlook for 2023-2025

2. How to characterize Bitcoin

3. What is the most likely trigger for the next round of a bull market

4. How to see the relationship between artificial intelligence and blockchain

5. Why CeFi and DeFi have been the focus of debate

6. Compliance issues of USDT

written in the back

Robin:

1. Macroeconomic outlook for 2023-2025

Some prominent analysts and hedge funds feel very pessimistic, but the mainstream market, including the stock market, has gradually healed the sorrow of 2022. Judging from possible wars, a series of actions by the Federal Reserve, and the performance of several major players (the United States, China, Europe, and Russia), whether the situation in the next two years will recover slowly, or has it not yet bottomed out?

Zhu:

This forward-looking is a prediction, and I can't predict it. The market is the result of a game of various factors. For example, in a chess game between two people, the beginning cannot be predicted, and the end game does not need to be predicted. Predicting the opening is predicting the player's strength, but probability prediction is similar to gambling. A master who predicts the endgame can, at most, see the outcome of the endgame earlier than a novice. It is still the case for two-person games, and the result of multi-player games is almost impossible to predict. Significant stock market fluctuations are big money coming in and out, and masters see the signal earlier than us. The expert's profession is to guess the Fed and consumption data to formulate plans, correspond to possible data, and devise different countermeasures. Buffett abandons forecasting, analyzes the basic facts, and then evaluates them. Valuation is to judge whether the bid is cheap or expensive. This one is much easier. Cheap and expensive are Timeliness. Durable consumer goods have the longest Timeliness, so Coca-Cola is his old man's favorite.

"Big analysts and hedge funds feel very pessimistic," and so do I. Because, from historical experience, the economy should have been in a recession long ago. But this time is different from Last time. Because the game's rules have changed, the laws of the competition have changed. So if you rely on old experience, you will lose.

The economy is two things, work, and money. If the rules for getting money change, Fed can issue it casually, and all your experience accumulation is worthless. What experience can correspond to "infinity"? Randomness is unpredictable, and you can never keep up with the infinitely changing rules. When the Ponzi scheme is not broken, those who do not participate are fools. The market is out of order that liar becomes a very glamorous word. People who know this blockchain have a deep understanding. Unlimited quantitative easing means that the Fed is a market maker. Like the People's Bank of China, the central bank sets the RMB exchange rate. As long as there is no hyperinflation, there will be no pressure to release water, and it will be acceptable to keep the economy stable and not collapse. The problem is pushed back, waiting for new productivity improvements to digest the more issued currency.

"But it seems that the mainstream market, including the stock market, has gradually healed the sorrow of 2022." It is the result that the dealer wants us to see. The stock price in the United States and the housing price in China are their keep silent stable goals. They are the ruling class, and countries worldwide are fighting, but cutting leeks is learning from each other.

We all feel that life is becoming more and more difficult. Because we are all leeks. Who is Scythe? Master who issued money and those who participated in printing money. Each of us is breaking our heads and trying to squeeze into the sickle class, but we are afraid that roots will be sickled before we squeeze in. Satoshi's Bitcoin has the potential to tame the scythe. Using the contradictions inside the sickle to tame the sickle is what the working people should do instead.

Robin:

2. How to characterize Bitcoin

Judging from the current trend, whether Bitcoin will be closer to becoming digital gold, a similar risk-off asset, or it will be like its early days. It will become more of a risk-on asset with Internet attributes. Some say that the highest correlation with Bitcoin is actually Tesla stock (TSLA); you can do a little research. What do you think is the underlying cause of this phenomenon?

Zhu:

Bitcoin is not a risk asset; it has a clear price bottom. In the eyes of the world's central banks, the volatility of Bitcoin is high than safe-haven assets, so the central banks have chosen gold as a safe-haven asset for hedging fiat currency. Therefore, in this series of questions and answers, "8. How to value Bitcoin, starting from the failure of the PlanB model", it is said that Bitcoin is not an opponent of gold in terms of stored value. I want Bitcoin to go from a store value to a reserve currency. Just like the central bank reserves dollars. Gold is only a safe-haven asset and can never be used as a reserve currency; this is a god-given opportunity for Bitcoin. Brother Sun is turning his Tron into the reserve currency of a small country. He is really "smart." But the qualifications of Tron currency cannot be compared with Bitcoin; the shortcoming of Bitcoin is that no one is operated it. The big guys of Bitcoin misunderstand that there will be pies in the sky. If Brother Sun makes it successful, what about Bitcoin? Not the best stuff wins, and the internet has repeatedly proven that. Brother Sun doesn't do it, but Brother Li can do it because anyone can do my plan.

Figure 1 is the stock of Tesla. The two graphs are not comparable compared with the monthly chart of Bitcoin in yesterday's article "9. Is there still a halving market for Bitcoin in 2024?". Graphs reflect historical data, illustrating that history is not comparable. And there is no correlation between the two businesses. Concepts are also not correlated, so futures are not comparable either. Bitcoin's correlation with Tesla is weaker than commodities and currencies. I also ruled out commodities and currencies when choosing a comparison for Bitcoin. There are a group of conspiracy theorists in the world. According to Musk bought Bitcoin, and they started to imagine. We still have to make judgments based on facts so that we are not easy to be fooled.

 Figure 1 Tesla's monthly line

Robin:

3. What is the most likely trigger for the next round of a bull market

The narrative of the next round of bull market is most likely to be detonated by what?. The last bull market in 2021 was basically caused by the entry of smart money from Wall Street, which directly triggered the "Summer of DeFi" and the detonation of NFT, but it quickly moved into a bear market due to the collapse of UST and FTX. So what is the most likely narrative for the new round of bull market? As builders, how should we prepare to embrace the future?

Zhu：

The market is iterative. The fundamental solution to various problems in the market is the bright spot that will detonate the market in the future.

Question 1: Luna failed; we verified that the algorithmic stablecoin is unreliable, and this type of innovation will be terminated in the future.

Problem 2: There is a problem with the centralized exchange. Validation centralization must be regulated. Centralized supervision must be backward, and it is not Satoshi Nakamoto's original intention; decentralized supervision is the breaking point in the future. There are signs but no mature plans yet.

Question 3: More issuance of fiat currency. Bitcoin jumped from a store of value over a safe-haven asset and became a reserve currency, which was also a bursting point in the market. It is not a technical issue, and even people in the Bitcoin circle do not accept it, let alone outsiders. As long as the concept is hyped, Bitcoin will break out. When Bitcoin breaks out, the blockchain explodes. Please refer to Chapters 12-13 of the original text and this series of questions and answers.

Question X: There are other breaking points, limited to my knowledge level; I haven't seen them yet. For example, whether zero-knowledge proof will explode, I don't know.

Robin:

4. How to see the relationship between artificial intelligence and blockchain

Peter Thiel (venture capital tycoon) said a fascinating saying: the blockchain is a democracy, and AI is communism. So what do you think of OpenAI's ChatGPT, a new AI work in focus? Does it have added value to the existing blockchain and Web3 ecology?

Zhu:

First of all, I'm afraid I have to disagree with this categorization. Peter Thiel is an outstanding entrepreneur and venture capital expert. The view that "blockchain is democracy and AI is communism" may have come from a distributed and centralized point of view. It is not the case; it can only be understood as a simile. Artificial intelligence has significant implications for Web3. It is meaningless to the public chain of the blockchain, but it may be meaningful to the second layer of the blockchain.

Robin：

5. Why CeFi and DeFi have been the focus of debate

The meaning and integration of CeFi and DeFi have always been the focus of debate. Ordinary people cannot quickly get started with DeFi, but CeFi has deviated from the original intention of Satoshi Nakamoto and the original Bitcoin community. By the end of 2022, big data shows that Binance has controlled more than 80% of Bitcoin's spot market. After Binance removed FTX, a monopoly became a fact. ( Huobi is unreliable.OKX is too Buddha-nature, Coinbase only has a spot market and has compliance shackles, and Kraken has a bad experience). What impact does this have on the entire blockchain, the development of web3, and the currency price of Bitcoin?

Zhu：

The problem with DeFi is transaction speed, and DeFi will continue to exist. But not the main battlefield. The general direction in the future is to improve CeFi, but an excellent solution has not yet appeared.

Advances in the security, transparency, and convenience of transactions positively affect the price of Bitcoin because they can bring new funds into the market.

The concept of Web3 is a more significant concept than blockchain and exchanges. However, improvements to exchanges are conceptually instructive.

Robin:

6. Compliance issues of USDT

Reflections on the compliance of USDT and the monopoly position of BTC/USDT in transactions

Zhu:

USDT must be compliant and must be regulated because it is centralized. There is also the need to be transparent about the assets deposited. At present, everyone has doubts about the 100% margin issue. 

Saying that USDT has a monopoly position is not consistent with the facts. I just checked the data of Coinmarketcap; USDT is $67.8 billion; USDC is $43.1 billion; BUSD is $15 billion, etc. USDT does not meet the criteria for judging monopoly. There are so many exchanges that it is impossible to count actual transaction data. I don't know how you got your monopoly statement.

written in the back

To understand this article, you need to read chapters 10-13 of the article "Invite Satoshi Nakamoto to welcome the new world" and the Q&A articles in the previous chapters 1-9 of this series.

1. Full-text links

This article was published in Bitui Serial.

Chinese link:

https://www.bitpush.news/articles/tag/%E8%AF%B7%E5%87%BA%E4%B8%AD%E6%9C%AC%E8%81%AA

English link: https://en.bitpush.news/?s=Weisha+Zhu

2. Supplementary video explanation (over the wall in China)

This series of articles will be explained on Sun TV, and the articles and TV explanations are complementary. 10 episodes of the program have been made. The following is the program catalog:

Episode 1 Starting from the Bitcoin White Paper

Episode 2: Does Bitcoin Have Value?

Episode 3 The Reason for Satoshi Nakamoto's Anonymity

Episode 4 The Root of All Evils in Fiat Currency

Episode 5: Past, Present, and Future of Bitcoin

Episode 6 Blockchain Opens Pandora's Box; Satoshi Nakamoto Comes Out

Episode 7 Four conditions for the rapid growth of Bitcoin

Episode Eight Satoshi Nakamoto's Age, Gender, and Nationality

Episode 9 Cypherpunk - the birthplace of Satoshi Nakamoto's thought

Episode 10 None of the pioneers who died was Satoshi Nakamoto; he is still alive

It can be seen that TV corresponds to the 6 episodes of our article; that is, the program is the explanation of the focus of the article. Broadcast schedule: The broadcast schedule is as follows:

Episode 4 January 30 at 12:00 noon

Weekly 1，3，5

Sun TV's link is as follows:

https://www.youtube.com/watch?v=5dTend6oJ-8

The whole program is divided into two parts. The first part proves who Satoshi Nakamoto is, and the second part is about the Bitcoin standard. The program will continue, followed by discussions and Q&A, hoping to form a Bitcoin-based theoretical system. Users are welcome to leave messages in the TV comment area, and viewers will be selected to participate in the conversation.

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