How to win consensus on Bitcoin as a store of value

In today's digital economy, Bitcoin, as an emerging asset class, is gradually being seen as an effective means of storing value. Many people are keen to explore the future of Bitcoin, especially whether it can gain broad consensus and become a universally accepted value storage tool. In order to deeply understand this issue, we need to analyze Bitcoin's characteristics, market dynamics, social psychology and other factors from multiple perspectives, and then explore how to promote consensus on Bitcoin in the field of value storage.

The essence of Bitcoin is first and foremost a decentralized digital currency, which makes it in sharp contrast to traditional fiat currencies. The value of fiat currencies usually relies on the credit and economic foundation of a country, while Bitcoin relies on the security of blockchain technology and algorithms. Both the scarcity of Bitcoin and its immutable nature make it have the potential to preserve the value of assets to some extent. For example, when faced with economic uncertainty, many investors choose to transfer part of their assets to Bitcoin to avoid the risks of the traditional financial system. Such behavior not only reflects the market's trust in Bitcoin, but also lays the foundation for its identity as a store of value.

However, in order to achieve a broad consensus on Bitcoin as a store of value, the problem of its price volatility must first be solved. Bitcoin prices are extremely volatile, often experiencing large increases and decreases in a short period of time. This instability makes many potential users doubt its function as a store of value. To meet this challenge, market participants and developers need to work together to reduce the risks brought by price fluctuations by improving Bitcoin's liquidity, increasing its use cases, and strengthening market supervision. For example, more and more merchants are beginning to accept Bitcoin as a payment method, which not only increases Bitcoin's actual application scenarios, but also enhances its attractiveness as a store of value.

In addition to price fluctuations, the acceptance of Bitcoin is also an important factor affecting its consensus as a store of value. Although Bitcoin has gained wide acceptance in some countries and regions, in many places it is still seen as a speculative tool rather than an effective means of storing value. Therefore, it is crucial to promote education and publicity about Bitcoin. Educating the public about the advantages and potential risks of Bitcoin through holding seminars, publishing research reports, and using social media platforms can effectively increase its acceptance. For example, some universities have opened courses on blockchain and cryptocurrency to help students understand this emerging field and cultivate future Bitcoin users.

In the process of promoting Bitcoin acceptance, the power of the community cannot be ignored. Bitcoin holders and supporters form a large community, who share their views and experience of using Bitcoin through online and offline exchanges. This positive interaction can not only enhance users' trust, but also inspire more people to participate in the use of Bitcoin. For example, many Bitcoin enthusiasts will share their investment stories on social media to show how Bitcoin helps them increase their wealth. This real case is often more convincing than any theory and can effectively promote more people's trust in Bitcoin as a store of value.

In addition, the legal and policy environment also plays an important role in the formation of consensus on Bitcoin. The regulatory policies of governments on Bitcoin vary greatly. Some countries actively embrace this emerging technology, while others take a restrictive or banning attitude. This uncertainty makes it difficult for investors to choose Bitcoin as a store of value. Therefore, promoting governments to introduce clear and friendly policies will create a good environment for the widespread acceptance of Bitcoin. For example, some countries have begun to explore the inclusion of Bitcoin in their financial system and allow it to circulate legally within a certain range, which undoubtedly provides a guarantee for the future development of Bitcoin.

On the technical level, the scalability of the Bitcoin network is also an important factor. As the number of users increases, the Bitcoin network faces challenges in transaction processing speed and rising fees. If these problems cannot be effectively solved, it will affect the user experience and, in turn, its consensus as a store of value. Therefore, developers need to continuously optimize Bitcoin's technical architecture, increase its transaction speed, and reduce transaction costs. For example, the Lightning Network, as a Bitcoin expansion solution, aims to improve transaction efficiency. The successful application of this technology will greatly promote the actual use of Bitcoin.

From a social psychological perspective, the consensus on value storage is not only the result of rational choice, but also the influence of emotion and culture. Bitcoin supporters often have anti-mainstream values, and their distrust of the traditional financial system makes them more inclined to choose Bitcoin as an alternative. This change in psychological state will directly affect the formation of consensus on Bitcoin as a value storage. Therefore, understanding and grasping this psychological change is crucial to promoting the acceptance of Bitcoin.

For example, when the global economy is facing a crisis, many people will seek new investment opportunities, and the value of Bitcoin will often increase. At this time, discussions about Bitcoin on social media will become more frequent, and more and more investors will begin to pay attention to this field, forming a collective investment psychology. The formation of this collective psychology often accelerates the establishment of Bitcoin consensus.

Among all these factors, Bitcoin's own technical characteristics and economic model are undoubtedly the basis for its use as a store of value. The total amount of Bitcoin is limited to 21 million pieces. This scarcity is similar to that of gold, which makes it have the characteristics of value preservation to a certain extent. In addition, the holding and transfer costs of Bitcoin are relatively low, and its convenience of use also provides conditions for its use as a store of value. In the context of digital transformation, more and more people are beginning to accept and use digital assets, and this trend will create conditions for the widespread application of Bitcoin.

However, facing such a complex situation, we can't help but ask, how can we effectively promote the consensus of Bitcoin as a store of value? First of all, all parties need to work together to build a healthy ecosystem. Whether it is investors, developers, or policymakers, they should play a role in their respective fields to promote the innovation and development of Bitcoin. Secondly, strengthening education and publicity to enhance the public's understanding of Bitcoin is also the key to achieving consensus. Through the sharing and communication of real cases, people's trust in Bitcoin can be enhanced and its application in real life can be promoted.

Ultimately, the consensus on Bitcoin as a store of value is not achieved overnight, but a long process. In this process, we need to continue to explore and practice to find the best path for the development of Bitcoin. Every participant is an important part of this process. Only through joint efforts can Bitcoin truly become a widely accepted value storage tool. We should embrace this new era full of challenges and opportunities with an open mind.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

For Bitcoin to be considered a good store of value, the market must understand and trust the soundness and robustness of the value proposition established by the core properties and rules of its protocol. The immutability of Bitcoin’s monetary policy (i.e., the hard cap of 21 million or 2.1 trillion satoshis), the highest level (and paranoid) of security, and decentralization are all classic examples of its protocol rules that reinforce each other.
Reliable protocol development means strict adherence to rules to protect these core properties. Developers, including core maintainers and other contributors, are part of this process and leaders in technical implementation. However, developers cannot and should not decide the future of the protocol alone, as users must also play an important role in shaping and strengthening this ethos.
Strict compliance with the rules requires Bitcoin nodes to be independent, decentralized, self-verifying, and enforcing the rules, which can only be guaranteed in the long term if the cost of running a full node remains moderate. Excessive operating costs will undermine the ability of nodes to self-verify and enforce the rules, thereby undermining the principles of decentralization and strict compliance with the rules.
Reliable protocol development also implies conservatism, including advocacy for backward compatibility and defense of the status quo (i.e., maintaining the status quo in the face of controversial changes or improvements).
Nakamoto, who championed this idea, wrote: “The nature of Bitcoin is that once version 0.1 is released, its core design is immutable for the rest of its life.”
This claim is significant and consistent with the premise that Bitcoin is first and foremost a store of value or digital gold.
For Bitcoin to become a recognized store of value, its core properties must become unwavering and immutable laws, especially its supply schedule and issuance cap properties. This is similar to the laws that protect the supply and irreproducibility of gold. Because if alchemists discovered a way to replicate gold and destroy its natural scarcity, then the demand for gold as a store of value would collapse and its status as a safe haven asset would be destroyed.
When it comes to gold, it is worth pondering why it has withstood the test of time for thousands of years across a wide variety of societies to date? Why is it that to this day, central banks around the world still hold a large portion of their reserve assets in gold, but there is no currency in the world that is backed by or redeemable for gold?
This is not because gold has lower narrow transaction costs than most media of exchange, nor because it has unrivalled transaction capabilities. Therefore, it is definitely not because it is the best medium for facilitating actual transactions.
No one is better qualified to answer this question than the central banks themselves. According to a recent survey by the BullionStar blog:
In their own words, there are many reasons why central banks hold large amounts of gold. However, there is a common thread in the central banks’ answers. Many respondents mentioned the ability of gold to be called upon in a crisis, such as: “Gold reserves can be activated in an emergency”, gold is an “emergency reserve in a crisis”, “a contingency against unforeseen events”, a form of “insurance”, or as the Bank of England put it, a “war fund” and “the ultimate asset to have in an emergency”. Therefore, almost all central banks refer to gold as a safe haven asset. In addition, many central banks mentioned the high liquidity of gold, and some mentioned the ability to use gold to obtain foreign currency liquidity, and even the possibility of foreign exchange intervention through gold. The role of gold as a hedge against inflation was mentioned in many central bank answers, which explains why central banks regard the gold price as a barometer of inflation expectations. Many banks also pointed out that due to the unique properties of physical gold, such as limited supply and mining, gold does not have any counterparty risk or credit risk, and, since it is not issued by the government, it has no default risk.
In summary, central banks around the world hold gold because it is a recognized store of value. All of gold’s other properties derive from this foundation.
Historically, gold has been in demand by individuals and businesses because it is a superior store of value and its scarcity cannot be manipulated. As liquidity increased, gold gradually transformed into a spontaneous medium of exchange until it achieved unparalleled liquidity and became a unit of account. However, because it was "designed to not scale," many ways to use it for payments were created without moving gold. Banks, banknotes (the forerunner of modern paper money), certificates of deposit, and payment networks based on the banking system are all examples of transactions (off-chain) that can be made without physically handling the underlying currency (on-chain).
As a result, gold has been the de facto monetary standard at many different times in history, again not because of its lower transaction costs in the narrow sense, but because of its natural scarcity and unforgeable production costs.
Only if Bitcoin has the same rigidity as gold can it achieve and maintain its status as a premium store of value, which requires that its fundamental protocol properties are as stable as gold. This may mean that the protocol eventually becomes "ossified", that is, it does not make non-backwards-compatible changes; this requires Bitcoin to avoid hard forks except in critical or fatal emergencies. Based on the belief that Bitcoin's core role is a store of value, being able to stand firm in the face of controversial change proposals is itself an improvement.
Bad Money Drives Out Good Money and Bitcoin HODLers (“Holders”)
When people can choose to pay with good or bad money, they will always choose the bad money and hoard the good money. In other words, spend the overvalued money while holding the undervalued money. This idea is known as Gresham’s Law.
The gist of the Law of the Currency of the World is that "bad money drives out good money." However, this only happens if the exchange rates between currencies are artificially fixed by law, as has happened with gold and silver.
As economist Friedrich A. Hayek put it,
Hayek pointed out that when buyers can (unilaterally) choose to pay with good or bad money, they will undoubtedly choose the bad money and keep the good money for other purposes. However, when the exchange rate between currencies is determined freely by the market, that is, when there is free competition between currencies, Groshen's law does not apply.
As a HODLer, I admit that paying with Bitcoin is exciting, but it doesn’t make much economic sense at this point. (BTW, I tend to use more Bitcoin when the price goes up, which contradicts the predictions of mainstream economists, but that’s another topic). Why would I give up an excellent store of value (according to my subjective assessment) if I can pay with a depreciating local fiat currency? Why would anyone pay with an asset that is appreciating (or has great prospects for doing so) instead of an inflationary fiat currency?
Economists who suffer from “deflation phobia” will immediately respond that a deflationary currency will never succeed because no one will pay with it. However, this answer sidesteps a crucial aspect of voluntary transactions: the choice of currency is not a unilateral decision. Unless you live in a country where fiat currency is mandatory (for example, in my home country of Brazil, it is illegal to refuse payment in local currency), good money tends to drive out bad money because the seller has a say in economic transactions. Therefore, the seller can rightfully refuse payment in bad currency or insist on payment in good currency. In countries with a history of currency crises, citizens have historically turned to the dollar, especially in large transactions such as real estate transactions. In these cases, the seller will demand payment in dollars and will not accept other methods (if you don’t believe me, try buying a property in Uruguay with pesos).
The same economic reasoning applies to Bitcoin HODLers. Today, if the seller has no preference, I will not give up my Bitcoin and pay him in local fiat currency. However, if more and more people realize that Bitcoin is a good store of value (good money), then I will have to give up my Bitcoin because the seller is unwilling to accept a devalued currency.
In that sense, I think what we need to see is merchants themselves wanting to receive Bitcoin payments, not just finding ways to get them to accept Bitcoin they have no intention of holding. Those who keep urging the use of Bitcoin payments today don't seem to understand sound money, legal tender, or Graham's Law.