Monetization Journey of Bitcoin & Pi Network
Part 1: Legal Tender and Central Banks.
“Have you ever wondered where the money comes from? Who prints money? Why are they allowed to print money and you are not? “
Fiat money or simply called money is printed by central banks, owned by the private sector, not the government. In theory, the government is owned by the people, working and serving the citizens. However, where the money is issued is a central bank that is not under direct government control, i.e. the power to issue money is not in the hands of the people but under the control of a few ones called elites.
“Money has no intrinsic value.“
First, the government must invest in the army and national security, infrastructure, and social welfare projects. To do this requires money, so the government has to borrow from the central banks. To borrow money, the government must issue bonds, also known as debentures. Simply put, the government writes a promissory note to the bank, and then the bank prints money for the government. It sounds interesting, so why can’t we write a promissory note to the bank to borrow money but have to put our house, car, and monthly salary as collateral? To borrow money from a bank, you must have collateral even though it’s the government. Thus, what does the government use as collateral? That is the tax, i.e. the government uses the tax that will be collected from its residents in the coming years as collateral to borrow money.
“Money can be printed infinitely.”
A Gold Standard is a form of using gold to ensure that money printed is backed by gold or precious metals. That is, to print a certain amount of money, you must have a corresponding amount of gold to be backed. Additionally, gold is finite so the amount of money printed will be limited. However, the gold standard has been abolished, which means that the amount of money printed is unsecured and can be printed as much as they want. The more the country owes, the higher the tax levies. Therefore, the price of goods and services literally increases due to inflation.
“We need to take back the hammer of money printing to the people.“
To take over the power to print money for the people, a decentralized digital currency was born based on blockchain technology, where everything is transparent and no one can control the monetary system. Sadly, the “cryptocurrency” market has become a place of deception and lies with centralized exchanges and “pump and dump” speculative games. Then, people no longer know the original purpose of “cryptocurrency”, instead, run after gambling projects initiated by acclaimed celebrities in society.
Part 2: Bitcoin — The First Decentralized Digital Currency System!
In 2008, an entity named Satoshi Nakamoto published a paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“ to describe a digital currency called Bitcoin, which claims to resolve all the problems of its precursors such as double-spending and Byzantine fault intolerance. Bitcoin uses cryptography to maintain security and fidelity, assign the authenticity of funds, and proof-of-work consensus to detect dishonest nodes in the network.
The first motive for Bitcoin mining is fairness as Satoshi programmed, where everyone can join the network to mine and earn Bitcoin using their personal computer(to give back the hammer of money printing to the people). Nonetheless, Bitcoin mining is based solely upon executing the hashing function SHA256 indefinitely while ASICs perform this better than low-speed personal devices. ASICs, Application Specific Integrated Circuits, are devices that do only one thing very efficiently. In this case, they compute the hashing function SHA256 to mine Bitcoin at a competitive rate. This makes it impossible for the average person to participate in mining Bitcoin. In fact, only large farms are practicing this which ended the decentralization feature of Bitcoin.
Fortunately, a POS algorithm was born to solve this problem, whereby each person can establish nodes that help maintain the stability of the blockchain network, called “masternodes”. Those who hold coins in the wallet will receive a reward called “staking”. If you set up a node, you will receive more rewards. However, it doesn’t resolve the problem in essence because people can use the VPS server to set up as many “master nodes” as they want to mine at high speed, far beyond the ordinary people who don’t have much knowledge about technology as well as money.
“I’ve moved on to other projects.“ _ Satoshi’s last word.
Part 3: Pi Network — The Most Popular Decentralized Blockchain Ever!
Pi Network is a project to popularize blockchain to ordinary people who do not know much about technology and take attendance through the phone app to receive the free Pi coin as an airdrop. The more people a participant invites, the more Pi they can get. Those pioneers, Pi miners, must pass a solid KYC to prove that they are real humans. Then, they can receive the number of coins relied on their contribution to the network. This can resolve the aforementioned problems. However, the project is causing quite a bit of controversy over the past time, many newspapers have warned of scams and also received a lot of criticism from public opinion and the online community.
In January 2015, SpaceX announced the proposal of satellite internet to provide Quantum Internet coverage on Earth. As of January 2022, 12,480 Starlink satellites have been launched in all of history. With this high-speed and low-cost internet, the old pipeline internet worldwide would be possibly shut down. If we don’t have the internet, our business can be in trouble. Quantum Internet may not be free wherein we need to hold some cryptocurrency to have access. Then, everyone should deliberately have to use such cryptocurrency for business, which eventually finishes the cryptocurrency agenda. If people need Pi to gain access to Starlink Internet, it will definitely achieve a high value. This will be the end of central banks around the world where people are using Pi instead of fiat.
Written by Dang Quan Vuong, founder of King Stock Capital Management.