Crazy Bitcoin
At the beginning of 2021, Bitcoin will use a surge to welcome the new year.
On the evening of January 2nd, Beijing time, the US$30,000 mark stood at midday, which was the first time in history.
In fact, during the entire 2020 period, Bitcoin has been on the rise. By 11 p.m. Beijing time on November 30, 2020, after nearly three years, the price of Bitcoin has once again set a record high on some exchanges. The highest price is 19863 dollars.
After that, the historical high of the Bitcoin value has been continuously broken, with a cumulative increase of more than 300% throughout the year last year, and it will continue to rise in the new year.
In just over 10 days before the old year and the new year, Bitcoin has broken through multiple integer barriers in a row. The increase on the evening of January 2 was even more crazy-it broke through 30,000 US dollars and 31,000 in one breath. The dollar mark.
What will happen to Bitcoin in the future, today no one can easily assert.
Bitcoin is a kind of cryptocurrency based on decentralization, adopting peer-to-peer network and consensus initiative, open source code, and blockchain as the underlying technology.
On January 3, 2009, the genesis block was born.
Anyone can participate in bitcoin activities, and bitcoin can be issued through computer operations called mining.
Since the upper limit of the number of Bitcoin protocols is 21 million, some people believe that inflation can be avoided.
In 2010, Bitcoin generated a price in the transaction, and the initial price was about $0.0025 per coin.
If compared with the current US$30,000 per coin, the “worth” of Bitcoin has increased by more than 12 million times in about 10 years.
Bitcoin uses the private key as a digital signature, allowing individuals to pay directly to others, the same as cash, without going through third-party institutions such as banks, clearing centers, securities firms, and electronic payment platforms, thus avoiding high handling fees, cumbersome processes and Regarding the issue of supervision, any user who has a digital device that can connect to the Internet can use it.
Based on the above reasons, countries around the world generally believe that this form of electronic money is free from the traditional financial system and is the best tool for money laundering.
Because of this, Bitcoin has been resisted by many countries.
Bitcoin's surge in 2020 is obviously similar to the reason why US stocks continue to break new highs under the epidemic, that is, global central banks, including the Federal Reserve, are releasing water.
Since the outbreak of the epidemic, the US government has launched three rounds of fiscal stimulus plans totaling approximately US$3 trillion.
Recently, the U.S. Congress passed the latest round of stimulus plans with a scale of 900 billion U.S. dollars.
Fiscal stimulus on an unprecedented scale has increased market liquidity and at the same time caused people to worry about inflation.
In order to resist inflation, Bitcoin, together with gold, has become a safe haven because of its scarcity.
According to the program setting, the total number of bitcoins is 21 million, and as the number of bitcoins on the market grows, it is increasingly difficult to obtain bitcoins through mining.
According to statistics, as of the evening of December 30, 2020, the global supply of Bitcoin has exceeded 18.58 million, which means that there are fewer than 3 million Bitcoins available for "mining".
The decrease in the supply of new bitcoins has not only increased the scarcity of the market, but also intensified market reluctance to sell, further pushing up the value of the currency.
Second, more and more traditional financial institutions have joined this crazy "game."
Many people in the "coin circle" believe that the current players behind Bitcoin are no longer the former technicians and blockchain enthusiasts, but instead are dominated by global financial institutions.
And when Bitcoin and other blockchain digital assets increasingly get the participation of mainstream investment institutions, it will help reduce concerns about the legality of Bitcoin.
In November 2020, PayPal, an online payment giant with more than 300 million users, announced that it would provide bitcoin transaction services to eligible US customers after purchasing a large number of bitcoins;
In December 2020, DBS Bank Singapore launched bitcoin and other digital asset trading services for institutional investors. In the previous three years, the bank has always referred to bitcoin as a Ponzi scheme...
However, the skyrocketing of virtual currencies represented by Bitcoin has not changed the reality that it is not generally recognized by the mainstream financial market. This means that the higher the value of Bitcoin, the greater the risk for investors.
After all, behind the virtual currency, there is nothing but artificial scarcity caused by technology.
Author: Dong Pei