People always say Bitcoin has a high threshold and is hard to learn, and even some Bitcoin enthusiasts say so too. I think this is grossly misleading. In fact, it is not Bitcoin that has a high threshold, but old knowledge that has a high threshold, to the point that people who know a lot of old knowledge are unwilling to lower themselves and admit their own ignorance in order to learn new knowledge. If everyone were starting from zero, would understanding Bitcoin’s principles really be harder than learning all those M1, M2, interest-rate cuts, reserve-ratio cuts, reverse repos, QE/LTRO/PSL/MLF/SLF, and so on and so on?
Suppose an ancient person who used gold and silver or seashells as money were to time-travel here, and I were to explain the principles of a new currency to him. I guess he would find Bitcoin easier to understand. In fact, Bitcoin returns to simplicity and is closer to the source of money; it strips away many characteristics added to the fiat currency system by central banks, characteristics that are actually hard to make sense of. What we have grown used to may not be a matter of course.
For example, learning how to detect counterfeit money seems difficult with Bitcoin: you need to understand cryptography, blockchain, and so on. But all of that is anti-counterfeiting technology, not anti-counterfeit detection skills. In practice, you only need to be able to understand the confirmation prompt your Bitcoin wallet shows you. As for distinguishing genuine from fake renminbi, do you need to learn printing technology? Papermaking? The ingredients of the ink? Watermark production? Put Bitcoin’s anti-counterfeiting technology together with renminbi’s counterfeit-detection tricks, and of course Bitcoin will seem hard to get started with.
I have argued before that so-called technology refers to “something that can be learned,” and that every technology is the product of converging forces from all directions, with many learnable dimensions and knowledge at different levels. Some levels are progressive: only after mastering one layer can you learn the next, while other levels intersect with one another and need not be ordered in advance or after. Any discussion of what one knows about a given technology always has a corresponding context; to compare things while confusing their contexts is meaningless.
For example, “computer” is a complex technology that contains many dimensions. When we talk about “learning computers” or “being able to use computers,” that may involve many different meanings. For example:
1. Being able to recognize it
Recognizing a thing also requires learning. A person from a primitive tribe would obviously not recognize a computer, whereas people living in modern cities generally have at least learned the most basic recognition skill. An old grandmother may never have touched a computer, but she can still recognize what that thing her little grandson is obsessed with every day is called, and may also know that computers are useful, expensive, power-hungry, and bad for the eyes, along with some related knowledge.
2. Being able to buy it
Knowing where to obtain a technology also requires learning. Grandma can recognize a computer, but she may not know where to buy one. It never appears in the grocery market she is familiar with; buying a computer means finding the right mall, knowing the approximate price range, and being able to tell good goods from bad. This skill of buying computers also has depths and shallows, and it relates to other deeper knowledge about computers, but is also relatively independent. For example, a professor in a computer science department may not be better at buying computers than a merchant in a computer mall.
3. Being able to play with it
“Playing” is the most general way many people begin with many technologies. The expression “being able to play with it” seems easy to understand in everyday language, but it is not easy to define clearly in philosophical terms. In any case, when we see children joyfully pouncing on a computer, we have to admit that they really “can play with it.” “Playing with a computer” also requires learning. My grandmother definitely could not play with one; my parents know how to use a computer to trade stocks and read the news, but it is also hard to say they are really good at “playing with computers.” Yet the threshold for “playing with computers” is obviously very low: a three-year-old may already be able to play, and a child in their early teens may play far more skillfully than most adults.
4. Being able to use it
Strictly speaking, “being able to use it” is what it means to master a technology as a tool; at this point, the technology is directed toward some other external purpose. Of course, within this level there are again infinite dimensions: different external purposes prescribe different uses, with no end in sight. For example, using a computer to trade stocks, to chat, to write papers, to do data analysis, and so on.
5. Being able to repair it
Technological artifacts will always break down or malfunction, so maintenance is also a relatively independent dimension. In front of laypeople, so-called “computer experts” often simply mean those people you call when a computer breaks. Indeed, in many cases people who are more familiar with playing with computers or using computers are also better at repairing computers, but after all, when one has been ill for a long time one may become one’s own doctor; that cannot compare with a professional physician.
6. Being able to analyze it
People who can use it and repair it may not necessarily understand how the technology works. For example, I know that in many situations a lot of computer trouble can be solved by “try restarting it,” but I have never understood the mechanism of the failures. I may know the rough market price and function of graphics cards and memory, but not necessarily their internal structure and operating principles. Knowing what something is and knowing why it is so are different dimensions, and they are not always a progressive relationship either.
7. Being able to manufacture it
The manufacture of a technological artifact is yet another relatively independent level. Most of the people above who can play with it, use it, or even repair and analyze it, cannot make a computer. And even within manufacturing technology there are countless links. For example, Intel can make chips, but it cannot make an operating system; NVIDIA can make graphics cards, but it does not do hard drives well. Saying that a certain computer company can manufacture computers does not mean that it has mastered every single manufacturing process required for every component that makes up a computer; rather, it means that it is good at mobilizing all kinds of resources so that they finally converge into its own product.
8. Being able to improve it
The improvement of technology is also different from the application of technology. Those who are skilled at many of the dimensions mentioned above may not be able to directly drive the evolution of technology. In many cases, technological improvement arises by chance; in other cases, especially in the context of modern mega-science and large industries, technological improvement can be advanced in a planned way. Various specialized research institutes and corporate R&D departments are all dedicated specifically to technological development and improvement. Professionals in this area of course need to learn more, but their knowledge often concentrates only on very cutting-edge narrow fields, and does not require a comprehensive understanding of all the contexts related to that technology.
The above classification is not exhaustive. In any case, we need to note that the “learning” and “being able” involved in a given technology include many dimensions; we cannot ignore context and speak in generalities.
Returning to the example of Bitcoin, after refining the different contexts, we immediately discover that statements like “to understand Bitcoin you need to know programming” are as absurd as “to understand renminbi you must know printing.” Within each corresponding context, understanding Bitcoin is almost always easier than understanding renminbi.
1. Being able to recognize it
Recognizing renminbi seems easy, because renminbi seems to have a physical form, but recognizing physical banknotes actually requires more “learning”: not only must you keep up with the times and promptly learn to recognize new editions of banknotes, you must also face the challenge of increasingly convincing counterfeit notes. Touch, watermarks, and other ordinary methods of recognition are not always reliable. And recognizing Bitcoin? That is extremely easy. As long as you download a Bitcoin wallet from a reliable source, seeing the incoming payment and confirmation information in the wallet is enough. In the case of 0-confirmation receipt, unless the other party is maliciously deceiving you, the transaction is basically already complete; at 1 confirmation, it is basically stable; at 6 confirmations, it is a done deal. Recognition of renminbi is also divided into three layers—appearance and touch, banknote detectors, and depositing it in the bank—for comparison: 0 confirmations are more reliable than touch; 1 confirmation is more reliable than a banknote detector; 6 confirmations are more reliable than depositing it in the bank. And in terms of the difficulty of learning, Bitcoin is simply overwhelmingly easier: basically, you just need to be literate.
What? You say Bitcoin counterfeit-detection technology requires understanding blockchain, computing power competition, probability theory, and cryptography?? Those are nothing more than the technical background that ultimately makes the counterfeit-detection method possible, just as when recognizing renminbi you do not need to understand the internal structure and manufacturing method of a banknote detector. The printing of renminbi and the manufacture of banknote detectors both require massive technical backgrounds, and all those technologies ultimately converge into the ding of the banknote detector’s alert.
Of course, the biggest difficulty in recognizing Bitcoin actually lies in first understanding that only the Bitcoin in the “wallet” you control yourself is Bitcoin; the balance shown on a trading platform does not really count as Bitcoin, at least not as Bitcoin you own. This is not difficult to learn, and once it is pointed out, it is very easy to learn. The problem is that many people are used to being slaves and have become accustomed to a state in which their property rights are stripped away; they do not realize the significance of controlling one’s own property, and thus find it hard to switch perspectives.
2. Being able to buy it
At present, this is basically the only dimension in which Bitcoin is harder to learn than renminbi. That is hardly surprising, after all purchasing depends more on the market environment. Renminbi is legal tender; whether you want it or not, you have to have it. Whether you are receiving wages or unemployment benefits, whether you are getting a few hundred yuan or tens of thousands, more or less everyone will receive renminbi from somewhere. But to obtain Bitcoin you first have to find a specific market. Still, comparing things on renminbi’s home turf is not entirely fair; we can change the location, for example by considering the situation of buying renminbi abroad or buying foreign currency within China. Renminbi is only easy to obtain in China; globally, it is not exactly blooming everywhere. The US dollar is widely used around the world, but in China there are many restrictions on buying dollars too (for example, individuals only have a quota of 50,000). Compared with that, obtaining Bitcoin is actually easy; even when major exchanges simultaneously suspend withdrawals, apps such as Bitpie Wallet can still let you buy coins with one click. From downloading the app to buying Bitcoin takes only a few minutes.
3. Being able to play with it
“Playing” is usually the way people first come into contact with something new, like children encountering phones and computers. But because the thing called “money” carries such strong practical utility, the dimension of “play” is not very prominent. Yet when Bitcoin first entered the vision of geeks, it really was not as utilitarian as serious money. The earliest community participants went mining and trading with one another more in a spirit of non-utilitarian play. When Bitcoin’s price shot through the roof, those old hands may well have been heartbroken, regretting the thousands or tens of thousands of coins they casually gave away back then. But even now, many Bitcoin participants can still call themselves “players.” We put in some spare money that, if it all goes down the drain, we would not even feel heartache over; if we make money, it is luck, and if we lose, so be it. Whether the price rises or falls, we are participating in a huge social experiment. I myself also have this mentality: I have used Bitcoin to buy stocks, buy mining rigs, buy altcoins, gamble, buy cloud storage, make donations, speculate short-term, and so on—trying everything out. It was not really for making money; the thing itself is interesting.
4. Being able to use it
Who doesn’t know how to spend money? But there are also various ways to spend it: swiping a credit card, online payment, mobile payment, and so on. This too is related to the application scenario. Chinese people may be one of the countries where mobile payment is most widespread; Alipay and WeChat Pay are already known to women and children alike. This is not because ordinary Chinese people are smarter than foreigners, learning faster what others cannot learn, but because of environmental influence. In the West, where card payment systems are more mature, inertia means that mobile payment is actually harder to gain traction.
In terms of the most basic payment function, learning to use Bitcoin is about as difficult as learning to use Alipay: in both cases you just scan a QR code and confirm the amount. Of course you can also enter the other party’s account to pay; the difference is that an Alipay account is usually an email address, while Bitcoin’s “account” is a string of characters that looks like gibberish, but for copy-and-paste purposes they are the same.
Bitcoin also has higher-end payment methods, such as multisignature. Multisignature technology gives Bitcoin many unique application scenarios. These application scenarios can more or less also be achieved under traditional currency systems, but they inevitably require introducing some authoritative third party to make them possible. In the current environment, these methods are indeed not easy to pick up, but these functions are not something renminbi can support in the first place, so there is no comparison.
5. Being able to repair it
Ordinary individual users rarely encounter situations where currency needs to be repaired. From the perspective of the maintenance and repair work required by the entire currency system, Bitcoin maintenance is of course simpler and easier to get started with. The hallmark of open-source software is that everyone has the right to discover bugs and submit patches, unlike traditional monetary systems where all the internal mechanisms of operation seem to be under conspiracy. Some programmers have personally participated in Bitcoin’s development. Even if they do not submit code, they can still witness every line of code being changed with their own eyes, and so they feel that Bitcoin has a high threshold, because only people who understand programming can understand it. But does the fiat currency system not also depend on digitization? Does it not also need programmers to maintain the bank’s internal settlement system? Obviously not. Those maintenance tasks may not be any simpler than Bitcoin’s programs, yet they are not open to every programmer to participate in. The illusion that “you must understand programming to understand Bitcoin” is precisely the result of Bitcoin’s threshold being too low, because no matter how well you understand programming, you may still not be qualified to understand the operation of the fiat system, whereas the mechanism of Bitcoin has no secrets as long as you understand programming.
6. Being able to analyze it
In this respect Bitcoin is overwhelmingly straightforward. All of its source code is open, every transaction is laid out in the open, and from issuance to use, every mechanism of operation is public and transparent, with no secrets at all. The corresponding operation of renminbi, however, seems elusive and ambiguous. First, it is not easy to figure out the “total amount” of renminbi: what are M0, M1, and M2? If 100 yuan is deposited in a bank, then borrowed out, then deposited again, then borrowed again… in the end it may become several thousand yuan of so-called “liquidity.” How does the central bank issue more money? Lowering interest rates and reserve ratios can increase “liquidity,” and measures such as MLF, SLF, and reverse repos can also regulate “liquidity.” So how much renminbi is there, really? Even experts and professors may not be able to explain it clearly. Bitcoin is much easier to understand: the total supply cap is 21 million, more than 16 million have already been issued, and there is no central bank behind the scenes conspiring to regulate it.
As for the principles of payment, when you hand over paper money in an ordinary “money in one hand, goods in the other” exchange, there is not much technical principle worth analyzing. But in cross-bank transfers, international exchange, real-time account synchronization, and so on, the operating mechanism of renminbi is not so simple. The financial, economic, and computer-technical principles involved are all anything but simple; a textbook like International Exchange and Settlement easily runs to several hundred pages. As for Bitcoin, almost all of its mysteries are basically spelled out in Satoshi Nakamoto’s few-page white paper, and all its technical means are open source. Although it is not so easy to fully understand the whole operating mechanism, there is not much of a threshold.
7. Being able to manufacture it
Whether by printing banknotes with a money-printing machine or by using various methods such as lowering interest rates and reserve ratios to create “liquidity,” the “manufacture” of fiat currency is completely centralized, and ordinary people have nothing to do with it at all. But Bitcoin completely overturns the centralization of traditional currency, making currency production decentralized. Everyone can participate in the activity of creating new coins under Bitcoin’s rules by competing in computing power. If one wants to overturn Bitcoin’s rules, one can also create a new coin. In this respect, fiat currency and Bitcoin cannot be compared.
8. Being able to improve it
Bitcoin’s open-source and decentralized nature also allows everyone to participate in its improvement. Small improvements are happening at every moment, while major upgrades are also being fully participated in by the community. Recently, the dispute over scaling has grown increasingly intense, and several routes have yet to determine a winner. In the world of fiat currency, there are also battles between hawks and doves, as well as “wonderful” innovations such as negative interest rates, but these improvements are all taking place behind the scenes of high-level conspiracy; ordinary people cannot even get through the threshold to sit in on them.
Translated from the Chinese original with AI assistance. The original text is authoritative.
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