Editor’s note: This article is from,
In December 2017, the price of Bitcoin broke through $19,000 for the first time, and then fell below $3,200 within a year. But long-term Bitcoin holders finally had the last laugh, because the price of Bitcoin exceeded $40,000 this Thursday, which is twice the price three years ago.
Although the price has now fallen back to around US$38,000, the price of Bitcoin has soared by nearly 25% in the past five days, which has caused the price of cryptocurrency to break through multiple milestones.
Every time the price of Bitcoin hits a new high, it will make investors who no longer hold now heartache. Foreign media reported that a British IT engineer accidentally threw away the hard disk containing 7,500 Bitcoin private keys as trash. According to the current price of 40,000 US dollars, it is estimated to be worth about 380 million US dollars.
At the same time, this rising price continues to create new wealth myths. A programmer posted on reddit today that he found 127 bitcoins that he obtained for free many years ago by watching videos and completing online random tasks. After the price of Bitcoin increased, he found this txt file named “Keys” from the old Dell computer in the garage, and sold all 127 Bitcoins on January 3 for 34,000 USD .
Bitcoin was proposed by Satoshi Nakamoto, who is said to be a Japanese American, on November 1, 2008. In January 2009, on a small server in Helsinki, Satoshi Nakamoto created a crude open source code, and the first block of Bitcoin was born on this day. The early participants were mainly geeks. On May 21, 2010, an American programmer exchanged 10,000 Bitcoins for 2 pizzas. At that time, the market price of these two pizzas was 30 U.S. dollars. The price of 1 BTC was 0.003 U.S. dollars. This is the first BTC. Pricing in the real world once.
In the face of rising prices and a seemingly stable trend curve, is Bitcoin worth continuing to invest? In today’s article, let’s talk about the ugly side of Bitcoin.
When Satoshi Nakamoto created Bitcoin, he set a total of 21 million, which can only be obtained through online “mining”, without relying on the issuance of specific currency institutions, and using blockchain technology to ensure all links of the digital currency circulation Security. These new ideas and technologies proposed by Bitcoin prove that the “blockchain” is feasible to a certain extent.
But in the end, Bitcoin failed to fulfill the promises it made when it was born, or even completely deviated from these promises. From the moment it was born, people have been spying on and analyzing the blockchain. The blockchain is fully open, so the prying and analysis of it will never stop. With the improvement of analytical capabilities, any protection of anonymity will eventually become a joke.
The scarcity of the blockchain space makes people think that they have finally found a way to get rid of traditional banks. From debt brokerage (Lightning Network) to partial reserve banking, to Mt. Gox and even today’s “responsible” businessmen’s venture capital, countless participants have intentionally or unintentionally ignored the fact that they are The understanding of currency is precisely the stubborn disease that Bitcoin has always hoped to get rid of or even eliminate.
Driven by them, Bitcoin has become a debt-based system like other currencies. The exchange that holds the key is not obliged to seal up all savings assets as reserves; on the contrary, as long as the assets have not been used up or the user has not grasped the handle, we cannot prove whether it has assets that match the statement. .
In addition, Bitcoin does not promote microtransactions in any way. If the Bitcoin network is deployed in a university, the relatively limited amount of transactions will not bring too much burden to the network itself, so it can ensure that the execution cost of a single transaction does not exceed the transaction amount itself. But in this case, the scale of the miner pool will also be very limited, which means that mining activities will become extremely volatile and without stability, and there is no guarantee that the blockchain will not be affected by tampering activities. In fact, a similar situation occurred in the early stages of Bitcoin’s development, so Satoshi Nakamoto decided to mine wildly in order to stabilize the output fluctuation of the blockchain.
And Bitcoin mining has contributed to corruption (this is because mining requires electricity, and many government officials have begun to help Bitcoin miners steal electricity from taxpayers), wasting huge amounts of energy, giving birth to a botnet, and even in certain In some countries, unified mining activities led by the central government have emerged.
Several major players in Bitcoin have repeatedly emphasized that the continuous introduction of more miners is to resist 51% attacks; but in fact, they are just afraid that there will not be enough miners to maintain this large-scale and resource-intensive national carnival. Proof-of-work has been hit hard by the advent of dedicated mining hardware. This type of hardware is dedicated to mining and is almost useless for conventional computing. Based on this, mining capacity is no longer distributed all over the world, but began to concentrate in the hands of a few “mining giants”. They can find the lowest-cost electricity in the world, move their mining facilities over, and ultimately make all retail miners unprofitable. That’s right, Bitcoin mining has actually existed in name only, and ASICs have begun to become the only mining option.
The global financial system is undergoing major changes. In the near future, we are about to usher in central bank digital currency.
Central bank digital currency is completely different from Bitcoin. In theory, Bitcoin runs on a globally distributed system. As long as the Internet can operate, no government or individual can control it.
The central bank digital currency represents a “closed loop” system, which is similar to the current digital currency and its currency equivalents. Such a closed loop currency system can provide holders with strong control. As for the actual use of central bank digital currency, there is not much to discuss. Consumers can use it directly and enjoy the incentives provided by it, such as obtaining higher savings income or obtaining discounts on central bank digital currency payments.
The central bank’s digital currency will be a programmable currency. With the powerful ability of built-in transaction rules, it will show unprecedented flexibility. At that time, the speed of currency circulation (that is, how often currency changes hands) will have no effect. For example, when the central bank decides to save money, the funds will stop changing hands; and if the central bank wants people to spend money, it can extradite the money to certain economic sectors to promote market growth.
Now, according to the long-term development trend of the global economy, people have realized the huge energy or destructive power contained in cryptocurrency. Currently, 80% of central banks in the world are planning their own digital currencies.
Cryptocurrency brings an option to break away from the mainstream economic system. In fact, the fundamental role of Bitcoin is to destroy the country’s monetary sovereignty: without this premise, Bitcoin would never achieve such a brilliant success. Any user who wants to get rid of physical cash, get rid of negative bank interest rates, and get rid of the central bank’s control over their spending activities and payment methods has only one logical choice-the cryptocurrency represented by Bitcoin.
The advantage of cryptocurrency is not anonymity. Regarding various regulations on cryptocurrency, users have to provide at least their identity information and the work they are engaged in.
All this reminds us of the US government’s compulsory collection of gold from American citizens in 1934.
Many Americans do not understand that between 1934 and 1974, the United States issued laws that regarded private gold holdings as illegal. The United States has entered the Great Depression since 1929. The government and banks need to enhance their financial stability, and the nationalization of gold has also been included in the legal provisions. Executive Order No. 6102 was signed and promulgated under the Roosevelt Act on April 5, 1933 (see the figure below for details), which mentioned that the American people must accept the official purchase price of US$20.67 per ounce and hand in all gold bars, gold coupons, and gold. The total value of gold jewelry that the American people can legally hold shall not exceed $100. Anyone who tries to evade regulations and hides large amounts of gold will face the risk of prosecution.
They hope that everyone under the management of the system will share the pressure and jointly resist the economic difficulties. So as long as the U.S. economy cannot show substantial improvement in the short term, and if the Fed still cannot find an effective means of achieving inflation, then we will definitely move towards the situation in 1934. Gold and Bitcoin have a certain commonality, and neither of them has risks that competitors cannot escape. Whether holding gold or holding cryptocurrency, we can effectively avoid the impact of the financial depression.
At that time, the price of gold was US$20.67 per ounce, so ordinary people could also hoard a batch of “hard goods”. But today, the price of an ounce of gold is close to $2,000; in contrast, today’s Bitcoin is more difficult to obtain than gold in 1934. Just find an online exchange, everyone can buy Bitcoin for a few dollars, and this small asset will not be affected by the government’s economic policies.
The central bank’s digital currency can clearly set which products and services users can purchase with it. I believe some friends have tried to buy cryptocurrency with a credit card, right? This kind of purchase will be rejected, everything has to follow the rules, it’s that simple. You can continue to use cryptocurrencies happily, but maybe one day, governments will find that their central bank digital currencies can’t compete with other cryptocurrencies, so the latter may immediately become illegal. To be sure, experts in the government departments of central banks must be smarter than ordinary people, so they must have thought of what we can think of, and they have been fully demonstrated.
