What is the nature of crypto asset value?

When the price of Bitcoin was at its highest, it reached nearly 70,000 US dollars a piece, which is equivalent to nearly 500,000 RMB. Now, even if it has fallen by about 70% from the highest point, it is still worth nearly 20,000 US dollars.

Therefore, many people have never understood why Bitcoin is so valuable, let alone why people in the industry often say "One coin, one villa". How can one Bitcoin buy a villa in the future?

Today, let’s talk about, Why are crypto assets represented by Bitcoin so valuable?

01. What is the essence of value?

Before answering "Why are crypto assets represented by Bitcoin so valuable?", let us first solve a more fundamental question: What is the essence of value?

In order to answer this question, we first ask ourselves the following two questions:

· Diamonds are forever, and one will be passed down forever. So what is the essence of the value of diamonds?

· What is the essence of value of artwork?

Whether you have the answer or not, let’s first appreciate the following Leonardo da Vinci painting “Salvator Mundi” which was auctioned for US$450 million.

Diamond is very hard, the hardest substance in the world, but apart from making drill bits, what other practical uses does it have? The clever Jew told a story that most women in the world believed. From then on, young boys had to spend all their money to buy a hard stone representing eternity for their beloved woman, and wear it on the woman's ring finger at a certain moment witnessed by relatives and friends.

The value of diamonds is just a widely accepted scam, but it doesn’t matter if we believe it.

Artworks have high appreciation value and are also scarce, so after the death of the painter, the work has greater room for appreciation. . But is the appreciation value really worth tens of millions or even hundreds of millions of dollars? Wouldn’t it be possible to appreciate the replica just as well if it is hung on the wall? High imitation works of art are not much worse than original paintings in terms of appreciation.

If it weren’t for the large art collection group, and if it wasn’t for the belief that someone would be willing to collect it at a higher price in the future, would there still be so many buyers willing to pay such a high price?

##At this point, perhaps you have realized:

If we do not assign value to one thing, many things will not Not that "valuable".

The air that is most important to our lives is free, and the food that can keep us full is extremely cheap. Strictly speaking, most of the amount we spend on our monthly bills is not necessary for survival, but it is necessary for life. These necessities of life are actually our "consensus". We all believe that these things are indispensable.

So, we can conclude:

The essence of value is consensus.

02. The value of crypto assets is also a consensus

Perhaps you think that the essence of currency is not consensus, but the coercive power of government and guns.

This view is actually incomplete. There are many ways and reasons for the generation of consensus, and government coercion is only one way of generating consensus.

In our society, there are many other ways to generate consensus: endorsement by authoritative people, corporate credit, historical inheritance, science, religious beliefs... These can all generate consensus.

Historically, Catholicism once sold "indulgences." If you don't belong to that sect (consensus group), you certainly don't spend money on indulgences.

(Picture: The church sells “indulgences”)

We cannot understand something Value, just because we don’t belong to the consensus group on that thing.
Brand is a consensus, culture is a consensus, trend is a consensus, diamonds are a consensus, currency is a consensus, religion is a consensus, law is a consensus, folk custom is a consensus, credit is a consensus... Broadly speaking, human beings The operation of the economy and society is based on various consensuses.

When there is consensus, there is value, and creating value is creating consensus. The main purpose of government rescue is to activate the confidence of private capital. Confidence is a bullish consensus. When the bullish capital exceeds the bearish capital, the market index will rise. The core of government regulation is consensus guidance.

"The market value of crypto assets represented by Bitcoin will eventually surpass gold." Because the group with this consensus is growing, the prices of crypto assets are also rising. The value of Bitcoin is essentially a consensus.

03. Conclusion

People who don’t play games will not recognize game props, but this does not prevent the skins in “Honor of Kings” from selling A set of tens or even hundreds of dollars; similarly, people who do not recognize crypto assets do not prevent Bitcoin from rising from zero to its peak of nearly 500,000 yuan in ten years.

The essence of value is consensus. The value of crypto assets represented by Bitcoin also lies in consensus. What affects the price of Bitcoin is not those who sneer at it, but those who have a consensus, and the number of this consensus group is constantly expanding.

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