The essence of value is liquidity consensus

During the stock market crash in 2015, the market value of A shares fell by tens of trillions of yuan, and many investors had a question at that time: where did these trillions go?

At that time, I explained to them that the market capitalization of A shares is an empty thing. The market capitalization of 10 trillion does not really mean that there is 10 trillion money in it. The market capitalization reflects the confidence of investors. In a bull market, people's confidence is high, the market value is high, when the stock market crash comes, confidence collapses, the market value will plummet.

This is my understanding six years ago. If I were to explain it again now, I would say that market capitalization reflects the consensus and liquidity of the whole society.

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When the virtual currency soared a few days ago, I discussed with my readers what wealth is.

Wealth is presented in different ways in different ages. Shells, pottery, gold, silver, copper and iron, slaves, land, credit currency and stocks are all used to represent wealth in different periods.

What these things have in common is that you can trade them for what you want. Therefore, the essence of wealth is the equivalent that can be exchanged, and consensus and liquidity are the basic conditions for exchange.

Twenty years ago, there was a craze for Tibetan mastiffs in Chinese society, and a purebred Tibetan mastiff could sell for millions. Now that the price has collapsed, no one is playing with it. This is a typical case of quickly accumulating consensus and liquidity in a short period of time, and then collapsing quickly.

Some people think that this is a bubble and a hoax, but in fact, it is only because the cycle of the Tibetan mastiff is too short. If we lengthen the cycle a little bit, we imagine that a person holding 10,000 yuan 30 years ago and instantly traversing to 2021 will feel that the RMB is also quite frothy and fluctuating no less than that of a dog.

Wealth can not be solidified, like water flows between the various carriers of society, one after another, where there is a new consensus convergence, wealth will flow in the past.

From this point of view, it is clear to understand the expansion of virtual currencies over the past decade-quickly gathering a lot of consensus and liquidity, thus becoming a new type of wealth.

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After I put forward this view the other day, some netizens said that the digital coin was always empty, with no application value and no state endorsement. One day, everyone's consensus suddenly collapsed like a Tibetan mastiff, and the currency price would be worthless.

This statement is possible in theory, but it is not that simple in practice. Although the virtual coin has a coin in its name, it is not a currency, but a commodity, similar to a diamond.

In recent years, many popular science articles on the Internet have revealed that diamonds are only hard glass beads, and I have always thought that people who buy diamonds are idiots, but after so many years of quarreling, the value of diamonds is still strong.

I thought about the reasons, first, diamonds have reached a wide range of consensus around the world, and second, there are a wide range of people who hold diamonds, and as vested interests, they resolutely safeguard the consensus on diamonds. And the Tibetan mastiff is a lot of onlookers, but there are still few people with dogs in their hands, so the basic plate for maintaining consensus and mobility is too thin.

By contrast, the mass base of virtual money has expanded quite rapidly, especially the sudden wealth effect of this decade. The more new people on board the ship, the more buttocks that determine the head, and the more solid the base of consensus and mobility will be.

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Many people think that wealth must be endorsed by political power in order to be safe.

I said a piece of news I saw yesterday: the largest fuel pipeline system in the United States was hacked and extorted $5 million worth of bitcoin, and operator Colonial was forced to pay a ransom. Because the payment is in digital currency, the police are unable to trace the whereabouts of criminals and black gold. Hackers attack important databases and then demand Bitcoin ransom, which has been a mature industry abroad in recent years.

The demand for global grey trading is not small, so breaking away from sovereign endorsement and regulation has in many cases become an advantage.

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That's all for tonight, and the point I want to make is that consensus and liquidity define wealth, rather than clinging to the appearance of old thinking.

As for the original intention of writing this article is not to encourage everyone to speculate in the currency market, this round of economic situation in the currency market has entered the second half. At present, the rate of long-term intervention in this position is low, and I dare not buy it myself, let alone advise you to rush in. Please be calm.