## Lessons from 2008: Why is the traditional financial system so fragile?

### A catastrophic economic disaster that changes the world

The financial crisis of 2008 was not just a market fluctuation; it shook the global economic order to its core. From the chain collapse of the mortgage market to the bankruptcy of Lehman Brothers, and the ensuing Great Recession, this crisis exposed the fatal weaknesses of the TradFi system. The United States lost more than 8 million jobs in less than two years, over 2.5 million businesses were destroyed, and nearly 4 million households faced foreclosure. Ironically, the tax money of ordinary citizens was used to bail out the financial institutions that caused the crisis.

More than a decade has passed, and people still remember that sense of powerlessness—unemployment, poverty, distrust. Official data shows that the unemployment rate in the U.S. rose to 10% in 2009 and only returned to pre-crisis levels in 2016. This slow recovery has led many to reflect: Is our financial system really safe?

### How is a crisis formed?

The seemingly perfect storm was formed like this. Financial institutions issued a large number of high-risk mortgages, which eventually evolved into a massive systemic risk. When this bubble burst, the domino effect instantly ignited the entire financial system. The bankruptcy of Lehman Brothers was like a fuse, plunging both the American and European economies into chaos.

The deeper issue is that the institutions and policymakers that were supposed to regulate all of this had laid the groundwork for problems years ago. A lack of regulation, corporate greed, and flaws in system design—these factors intertwined ultimately led to this disaster.

### Has the rule changed?

Although regulators claim to have strengthened control measures and the financial system's ability to resist risks has indeed improved, the fundamental issues still exist. High-risk loans are still being issued, and although the current default rate is low, who can guarantee that this situation will last forever?

What is even more concerning is that history often repeats itself. Even with new rules in place, policy loopholes can still be exploited. The 2008 crisis was essentially a product of human decision-making errors, and such decisions can happen again.

### The Birth and Significance of Bitcoin

An interesting coincidence is that 2008 is also the year Bitcoin was born—the first truly decentralized digital currency for humanity. As the global traditional financial system was collapsing, and governments and central banks were forced to intervene, Bitcoin and its underlying blockchain technology offered an alternative.

Unlike fiat currencies such as the US dollar or the British pound, Bitcoin is not controlled by any government or central bank. Its supply is determined by pre-set code, with a total cap of 21 million coins. This means that no one can arbitrarily increase the money supply or manipulate the market. Bitcoin uses a proof-of-work consensus mechanism, where miners are responsible not only for generating new coins but also for ensuring network security by validating transactions.

More importantly, the code of Bitcoin is completely open source, allowing anyone to review, test, and even improve it. This transparency and decentralized design philosophy is a direct response to the opacity of the TradFi system.

### Future Choices

Although it has been more than a decade since the 2008 financial crisis, its lessons are still in effect. This crisis reminds us that the vulnerabilities of the TradFi system arise not only from market fluctuations but also from the concentration of power, insufficient regulation, and the accumulation of systemic risks.

Although cryptocurrencies still have a long way to go before they can truly change the financial landscape, they undoubtedly represent a viable alternative. Decentralized digital currency systems have the potential to provide economic independence for those lacking financial security, and create possibilities for building a healthier and more transparent future financial order. The crisis of 2008 may happen again, but at least we now have other options.