Bitcoin broke through a 12-year high, with a market value of over 2.600 billion. What is it that supports its value?

Last night, Bitcoin broke the 20,000 mark. The Huobi market showed that it rose to 21910U, with a market value of over US$400 billion, equivalent to more than RMB 26,600 billion, and its market value far surpassed Moutai, ranking 13th in global market capitalization assets.

However, if someone in the circle comes randomly and asks him: “What is the use of Bitcoin? What is the value?” I think many people’s answers may not be able to hold back other answers except for the word “speculation”. . Sometimes, when we look up at the price and market value of Bitcoin that “rise into the cloud”, we have thought: “a virtual thing that was born with almost no value, no background and no backing, 12 years, from “from scratch” to 2 With a market value of 600 billion yuan, how did it earn it?” (Recall the birth of Bitcoin: Biography 1)

In essence, Bitcoin is just a computer software. For most people, it is just a bunch of incomprehensible code, and there is almost no way to see its value.

And to say that one piece of software can make so much net worth, the most familiar and easiest to understand is Bill Gates and his Microsoft Windows operating system. Windows has entered thousands of households and industries, and people have increased productivity and created huge value through this computer program, so Microsoft once even became the world’s most valuable company.

So, what about Bitcoin, which is also a particularly high-value software? “Value comes from consensus.” This sentence makes your ears callous. In fact, many people want to know what value Bitcoin brings to specific people and things, thus supporting the understanding of it. Consensus, and steadily push its market value to more than 26 trillion?

01Miners and other mining ecosystem participants

To put it simply, Bitcoin mining machine is a continuously profitable machine for miners. It can lay eggs like a chicken to generate value, and even go to the road of tens of billions of wealthy people. This is Bitcoin for miners, mining operators, and mining companies. The value of these people involved in the upstream and downstream of the mining ecology.

Remember that the vernacular blockchain has a popular science article for zero-based entry “Is there a difference between a Bitcoin mining farm and a chicken farm? 》It was introduced that miners are the most important participants for Bitcoin, and for miners, a mining machine that can produce Bitcoin is a “hen” that can lay golden eggs. Although the way of mining is not as simple as imagined, and it is really a bit like opening a “chicken farm”. Generally, a variety of suitable environment, maintenance, and transportation of “food” (energy) are needed to successfully lay “golden eggs”. However, miners are attracted by Bitcoin’s benefit distribution mechanism, and new miners are constantly joining in.

Today, more than ten years later, we have seen a number of self-made crypto tycoons come to the forefront from the mining industry, and it is the miners who have ensured the security of the Bitcoin system and made Bitcoin continue to be strong.

02user

The full name of the Bitcoin system is called: a peer-to-peer electronic cash system, so for users, it can be used to initiate transfer transactions. So why use it to transfer money? To put it bluntly, it saves time, effort and money.

Bitcoin does not need to be transferred through banks, third-party payment companies, etc., and directly reach the other party’s account, which eliminates the processing time, manpower and costs of third-party institutions. Banks and other financial institutions charge themselves through financial services. The high-rise buildings built can illustrate how huge this cost is.

In fact, many people do not fully understand the concept of third-party guarantee agencies. In many cases, our transfers are free, because in a credit society, small transfers are done through credit lines between different financial institutions, not real transfers.

So what if it is a large transfer? For example, what about super large transfers on the Bitcoin network that are worth tens of millions, hundreds of millions, or even billions of dollars? If you switch to using a bank to process the transfer of the money, the peer-to-peer transfer is fine, you only need to keep an account yourself, but if it is an inter-bank or even a cross-border transfer, almost all banks will tell you that the transfer is tens of millions of dollars. You need to go to the counter and make an appointment in advance. What if it is a 100 million yuan transfer? Needless to say, transfer, even if you want to withdraw the 100 million in your account from the bank, it is very difficult. You need to use various money transport vehicles, security, and a large number of people to count money.

However, to process an asset transfer of more than 100 million yuan through the Bitcoin network, the operation process is 1 minute, the handling fee is only a few yuan, and the arrival speed is fast. This is the use value of Bitcoin.

03 savers, speculators

Because Bitcoin has use value, and has many high-quality characteristics especially like gold, and some of the characteristics are better than gold, and it also has the “partial” hedging and value storage functions of gold, so it is gradually regarded as gold. Hard currency is beginning to be hoarded by many people.

And because it is only “11 years old” this year, it seems to be an extremely restless age before reaching adulthood. The constant suspicion from the outside has led to its huge volatility. The greater the volatility, the greater the space for speculation and hype. So the speculators came. So we will see: stories such as the prodigy who bought Bitcoin in the early years and became rich, and the stories of the sky-high Bitcoin buying pizza and breaking his legs, and of course, will also see speculators who broke their fortunes.

for example:

Take the previous story of miners and chicken farms. Bitcoin is a “golden egg” laid by a mining machine, just like an egg laid by a chicken. The value of an egg is self-evident to people. It is not only nutritious. It is rich in value and is a raw material for various cuisines, which can directly and indirectly bring about huge economic benefits. Most people will buy a pile every day and store it in the refrigerator to enjoy slowly.

Due to the influence of various external factors, such as the reduction of egg production caused by avian influenza, the price of eggs will often fluctuate greatly. So speculators’ favorite egg futures are here, and the eggs are also “fried” by speculators. Up.

This is the value that Bitcoin brings to depositors and speculators.

04 People in poor, backward or “turbulent” areas

Due to the low transfer cost of Bitcoin, the required time is short. In many poor and backward countries, it is not necessary to build expensive network infrastructure to transfer money through an encrypted network. Bitcoin’s infrastructure is formed by miners from all over the world and does not require the government of poor countries to pay, but it is not used to pay and pay salaries. Any intermediate cost can save a lot of money.

And these countries and regions in need of help often receive funds transferred from all over the world for poverty alleviation. There are many examples of charitable organizations all over the world who donate through Bitcoin, because this way donors can see their money transparently. Have all the transfer paths flowed where they shouldn’t be. This will help improve the openness and transparency of the charity industry, and also enable people in poor and backward areas to really get help.

So how high is the availability and value of cryptocurrencies such as Bitcoin as transfer infrastructure in poor and backward areas?

For example, thanks to the “infrastructure madman” type of vigorous investment in development, convenient and economical payment methods such as WeChat and Alipay in my country are almost impossible to use in many countries. Because of the backward infrastructure, it is difficult for them to develop similar Mobile payment.

With Bitcoin transfer, you only need a device (regardless of the configuration) that can run a simple program to send the signed and encrypted transfer information to complete the transfer, regardless of whether the other party is online or not. Even if there is no network, sending the information encrypted by the private key signature to a third party through SMS or even handwritten letters to help network broadcasting to the Bitcoin network can also successfully complete the transfer, which is impossible in any traditional way. The operation is complete.

05Energy Value Store

There are many such corners in this world, which are remote but rich in minerals or rich in natural resources such as water conservancy and wind power.

For example, there are many coal mines in some areas, but they cannot be transported outside due to high transportation costs. At the same time, due to the sparse population, the thermal power, hydropower, and wind farms built in these areas are very surplus, and the economies of these areas are often relatively backward. At this time, they very much need and welcome the entry of miners. Miners not only bring a lot of jobs, but also convert the local surplus energy into electricity resources and then generate a lot of income through Bitcoin mining. This is actually equivalent to the original The value of energy that may be surplus and wasted is stored through the Bitcoin network, and then paid to the local government and people through electricity bills, which drives the local economy.

Of course, this field is still being explored. Perhaps in the future, the emergence of 5G and other network facilities will make full use and storage of clean energy and natural resources around the world, and bring more substantial income to the people in the region.

06 “Black” and “Gray” uses

Due to the various characteristics of Bitcoin, perhaps many people have heard that the early value of Bitcoin was mostly supported by some “black” and “grey” uses.

As Bitcoin became more and more mainstream, the “sunlight” began to lift the fog, and these “dark” corners began to gradually feel the glare. Bitcoin is like a double-edged sword. It also has the transparency and traceability that criminals fear. With the strict supervision of various countries and the discovery of more other uses, the proportion of illegal uses of Bitcoin has begun. Significantly shrinking, the future of Bitcoin for illegal purposes may be more difficult than using cash directly.

07 Postscript

The phrase “value comes from consensus” can actually be said backwards. The amount of consensus depends on how many people it helps solve, how many problems and how much value it gets. The 12-year-old Bitcoin was able to start from scratch and become a trillion “rich” by helping others to acquire huge wealth, store huge wealth, save huge costs, and deepen poverty alleviation. Of course, the story is far from over. What will it be like when Bitcoin “adults”, and how crazy the world will be?

The pie exceeded $20,000. What is the current state of your investment? How do you see the next market development?