Behind the "Dying" bitcoin: underestimated prices and global consensus

in crypto •  last month 

In recent days, the eyes of the world have focused on the digital currency market. Bitcoin is like a small motor, and it is rising. From the beginning of March, the $3,800 has nearly doubled, and that people are still watching from sideways. It’s time to think about a new wave of time. Bitcoin is quietly coming. A huge reversal move.

The time is only over, just two months. Of course, it is still not possible to judge the bull market has come, but at least it is certain that bitcoin is "killing." You know, at the end of last year, when Bitcoin fell from a high of $20,000 to a low of $3,200, it fell for a whole year. Many people have a negative sentiment that "bitcoin may return to zero."

To sum up, there are three kinds of people who produce such negative emotions:

  1. Those who do not understand will recognize bitcoin as a scam. The strange thing is that these people never bother to buy a bitcoin, but they believe that bitcoin is a scam. The reason is nothing more than Bitcoin is a code created out of thin air, does not have social value, and now the price of the virtual high is made by some people. In their cognition, bitcoin has to fall until it meets its own inner value judgment, so catching up with the yin of the year, these people have begun to make generous eulogy. Look, the digital currency market bubble is finally bursting. Bitcoin is going to be zero, and those who are trying to achieve wealth in the currency circle should wash and sleep...

  2. Those who have jumped into the currency circle and tried to do a big job. Most of the people here are coming because they see a lot of people relying on the success story of the wealth of wealth in the currency circle, and seeing that many people earn a lot of money, they want to step in and try their luck. However, the bad thing is that he just entered the market and caught up with the endless fall. In the currency circle, the inner torture and suffering will be one more day. This group of people suffered from persecuted paranoia without exception, and eventually left the field as an injured old leek.

  3. Those who step into the blockchain industry in order to speculate on the currency. These people have no idea of ​​the blockchain in the future of this industry. What is fancy is that the digital currency market is volatile and can wait for an opportunity to make a small fortune. There are many people who believe that they are K-line experts in the traditional stock industry. They try to use arbitrage in the way of doing more or shorting. After the small test, they start to put leverage. As a result, the skyrocketing and plunging of the currency circle can be divided into minutes. These people are out of the game. In the end, these seemingly powerful financial experts, but helplessly smiled and confessed to the dog village, the currency circle was too deep, and with all kinds of conspiracy theories angrily left.

Friends do not have to sit in the right place, the focus of this article is not to analyze the inner OS of these three types of people. You may be able to perceive that those who really have the idea of ​​"bitcoin will die" are mostly not based on rational cognition, perhaps because of prejudice, perhaps because of harm, or simply do not understand. In other words, even if Bitcoin is really dead one day, it won't be in the way they think. And once Bitcoin is done, what really dies is the cognitive divide that many people are not willing to cross.

In fact, in the history of Bitcoin development, there have been several critical moments of dying.

  1. In September last year, Bitcoin was exposed to DOS vulnerabilities and super-vulnerabilities. Such security threats can smash the consensus of bitcoin accumulation and the economic incentive system, making Bitcoin unrestricted inflation a worthwhile code. However, the possibility of such security threats is very small. Even if it is discovered, it will be quickly repaired. After all, it is of vital interest to most people.

  2. In November last year, Bitcoin's forked currency BCH showed a hard fork due to the breakdown of the consensus. This fork directly led to the bitcoin falling from the price of nearly 7,000 US dollars to about 3,100 US dollars. The game between the two major interest groups behind it made everyone suddenly feel the monopoly and interest manipulation behind the digital currency, and lost faith for a time. There is no doubt that the biggest lifeline for Bitcoin is the consensus of steel casting. If the consensus breaks down, it will be a matter of time before Bitcoin loses its value. However, this time the moth was only caused by one of the bitcoin's sons, and it could not shake the foundation of Bitcoin.

As stated above, there are only two points that can kill Bitcoin: security breaches and consensus bankruptcy. The former, because the Bitcoin system has been in operation for 10 years, its technical stability has been conclusive, and it has undergone various tests of life and death. It is difficult to have fatal security holes. In addition to the consensus crisis, Bitcoin is a global cross-border. The existing consensus has also been honed after 10 years, and with the great ecological and social strength, the injection of fresh blood will only make the already built "Consensus Great Wall" more majestic and strong, and it is equally difficult to have Destroy the power of the level to kill it.

I am afraid that this is not enough. After all, empty talk about consensus will only make people think that the brainwashing of the faction and the pyramid scheme is not bad. Next, I will talk about my own understanding of the industry. How does the steel-like consensus of Bitcoin be built? In other words, why does Bitcoin "kill"?

First, the working mechanism of POW

In short, Bitcoin's normal operation is based on a proof of work mechanism. The bitcoin chain has continued to operate since the first bitcoin block was dug up in 2019. It is the POW that is working proof mechanism to support its normal operation, which means that who contributes the computing power, provides support for the system operation, and who will receive the bitcoin reward provided by the system. Bitcoin now rewards 12.5 bitcoins in a block of about 10 minutes, worth about $90,000. This huge economic reward has attracted the major mining pool groups to work on electricity and mining machines day and night to contribute to the work and maintain the normal operation of the system. The key is that the mining reward is the result of competition, and the reward attribution is unknown. In order to receive the reward, it must continue to contribute computing power.

Satoshi, the father of Bitcoin, is very clever in using the POW mining mechanism to create a "perpetual motion machine." This has enabled the Bitcoin network to continue to operate. Many people have questioned that Bitcoin is a code created out of thin air. Can it be arbitrarily issued? Obviously it is a misconception that it ignores Bitcoin not only code, but also a regular economic incentive system. It is also a system supported by an organization such as mining pools and mining machine manufacturers. And each block has thousands of peer-to-peer transaction information records, which meets various needs of transfer between ordinary users and wallet withdrawal. Users also need to pay a certain fee to initiate mining transactions to be used as mining miners.

With a more general understanding, the Bitcoin system is actually a complete banking management system that helps users manage assets and process asset trading information. The difference is that Bitcoin does not have the distinction between various banks such as ICBC and ABC. It is a truly cross-border distributed 24-hour accounting system. Individual banks also have the risk of bankruptcy liquidation. Bitcoin is a more stable and decentralized system. It is also trustworthy. It can also process transaction information, as well as asset management. Therefore, the Bitcoin system will continue to operate until one day the upper limit of Bitcoin's 21 million pieces is reached. It seems that each system reward for the block has stopped, but Bitcoin may have already entered the application field by then, and its huge transaction package Demand and transaction fee incentives will be the main driving force for mining mines. It is not difficult to see that the stability and sustainability of the POW working mechanism is directly related to the value of Bitcoin, and its continuous operation supports the value of Bitcoin. I have to say that Nakamoto is a genius. The Bitcoin system is more like a "perpetual motion machine" driven by economic mechanisms. How can it die easily?

Second, the far undervalued bitcoin price

When the economist Lang Xianping didn't understand something that didn't produce social value, how could he have such a big price? I am afraid that many people still don't understand why bitcoin is so valuable. Mentioning this, many people are accustomed to using digital gold as a metaphor for bitcoin, associating the upper limit of gold storage with the total supply of bitcoin to determine that bitcoin has a certain price. But this explanation ignores a point. Gold is tangible and most of Bitcoin is invisible, so interpretation will only be repugnant and repelled.

In fact, the value of Bitcoin is not to replace gold, but to become a digital virtual bank, to play the social accounting value of various banks such as ICBC, ABC and China Merchants Bank. If you give these banks an estimate of the value of the package, what is the price? Only ICBC has a market capitalization of 2 trillion yuan, and the market value of bitcoin, which many people think is already high, is only about 800 billion. As a global distributed asset management system, its current market value is still not comparable to the market value of a domestic bank. So, the value of Bitcoin is now far underestimated. Many currency circles such as Bao Erye and others even threatened that Bitcoin rose to $1 million. It is not arrogant or fucking. Many people don't understand that their respective perceptions of the Bitcoin system are highly different, so they have a very different perception. As for how much Bitcoin can rise, you can tell the difference. If you and I understand Bitcoin, you must know that the price is far underestimated.

Third, the global consensus economy

The slogan of "consensus economy" has been called for a long time, and some people say that it is "distributed business". In any case, it is a kind of progress in social economic and production relations. In fact, on the macro level, the economic dividend in the Internet era is a wave of dividends brought about by the asymmetry of information after the social system is connected. The dividend of the mobile Internet is a wave of intelligent speed matching and the improvement of social division of labor after people are terminalized. Dividends; the future blockchain economy era solves a wave of dividends that equalize the distribution of social resources and contributions after the refinement of coarse-grained big data.

From the general trend, it is sooner or later that the blockchain is integrated into the social economy to play its due value. As the number one economic system of the blockchain economy, Bitcoin has the broadest consensus in the world, and there are about With 20 to 30 million users, although this is insignificant compared to the total population of 7 billion, 30 million users can support an economy that continues to function healthily, but it is not fat, but if it is once bitcoin globally With more than 100 million users and 1 billion users, its social and economic value is immeasurable.

For Bitcoin, it has natural decentralization, anonymity, and non-traceability. This means that even if the vision of becoming a global asset transaction management system cannot be realized, even if it is difficult to integrate the Bitcoin system in real business payment scenarios, only Bitcoin is hard to be completely eliminated in the application of dark money and other gray goods. Moreover, the ultimate vision of Bitcoin is much larger than what can be done now. The ultimate goal is to penetrate into all aspects of business and become a new generation of digital virtual banks. Of course, the technical bottleneck to achieve this step of bitcoin is still very large, and its high concurrent processing speed, block capacity, etc. are also obvious in terms of efficiency improvement, and can not carry hundreds of millions of transaction demand inflows, but whether it is Lightning Network is still the origin of various forks, coins, and even cross-chain platforms.

The so-called consensus economy can also be understood as a social economy. The core of the social economy is not a large and comprehensive scale economy model. It only needs a transaction medium called Token, a transaction carrier that supports Token operations, and a group of individual users who hold Tokens. All contributions from members of this community can be quantified by Token, even if the value of coarse granulation can be motivated immediately, and the final value-added return will be shared equally for each user in the community, and social resources can be more equitably distributed. . With this in mind, it is not difficult to understand what the blockchain economy will do. The value of Bitcoin is self-evident.

Having said that, do you still think Bitcoin can be killed?

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!