Why Bitcoin Sucks (Why Bitcoin has value)

Why does Bitcoin suck? Bitcoin is the most controversial concept in the blockchain industry and has been on the rise for the past decade. Since 2017, the price of Bitcoin has risen from less than $10,000 at the beginning of the year to nearly $20,000.

But it has surpassed this threshold. Its decentralization property and anonymity make it a hot topic in the field of digital asset trading. Due to its status as a non-national currency, immutability, distributed storage, and the requirement for data security, it has become a “standard configuration” in the global financial industry. Why is Bitcoin so successful? This depends on whether people are willing to believe that Bitcoin can exist in the long term. If not, it means Bitcoin will be widely adopted. Why is Bitcoin accepted and used by people? What problems can Bitcoin solve? Why promote value creation and transfer through encryption? Why does this phenomenon occur? Why is there such a trend? Why are there so many types of people? Many people in these communities hope that Bitcoin can bring change to their lives. But it is unnecessary to overemphasize what they want, but rather consider the following questions:

1. What is Bitcoin? How does it work? Is Bitcoin a form of electronic cash? It is not generated as a means of payment, a commodity/service, or a tool; and as more and more people become aware of Bitcoin’s existence, Bitcoin will become more powerful.

2. What is the Bitcoin network (such as Bitcoin wallet) or how does it work? They are all driven by computer programs, enabling users to communicate without leaving the system and without incurring any additional costs.

3. When can Bitcoin be obtained? We all know that the Internet was originally sparked by the efforts of a few people, so what we see now is a large number of personal computers entering the network, constantly increasing new CPU resources to obtain more memory space. In addition, there are a large number of server devices used to process computing power requirements. Therefore, when Bitcoin reaches a certain scale, it will lead to a rapid expansion of technical solutions, which is the so-called encryption technology.

4. What is Bitcoin mining? Although Bitcoin mining is not a real economic activity, many participants are still enthusiastic about mining Bitcoin with their idle power, which can attract more investors to join and continuously increase the usage of Bitcoin. Some people believe that Bitcoin mining is actually just a technical application, providing a lower-cost information transmission protocol (such as IPFS), which is undoubtedly great news for investors who are not familiar with Bitcoin technology. Finally, Bitcoin has also become an investment choice for many investment institutions. For example, Grayscale’s parent company Digital Currency Group’s GBTC fund is engaged in buying Bitcoin futures contracts and trading exchanges. fund.

Why Bitcoin has value

Why does Bitcoin have value?

In the cryptocurrency market, investors often turn their attention to Bitcoin. However, for those who are unfamiliar with blockchain technology, they will find that although the current price of Bitcoin is not particularly high and it does not have much practical application value, as more and more people start accepting Bitcoin as a form of payment, people’s investment in Bitcoin will increase accordingly, leading to a sharp rise in its price. All of this makes sense-Bitcoin is a digital currency with characteristics of high scarcity, decentralization, resistance to censorship, and security, and it can be used as a means of purchasing goods and services.

So what factors allow Bitcoin to generate such huge returns? In fact, from an economic perspective, it is because its core is very simple: as long as you hold a coin, it is enough to conduct transactions. Secondly, it is created and owned by anyone, so it will not be worthless or depreciate like gold. And these reasons are the purpose of Bitcoin’s birth:

1. In order to facilitate everyone’s use, it is necessary to deposit Bitcoin into a wallet address (or directly place these funds in the exchange);

2. If we want to obtain more Bitcoin, it is best to choose some small bank accounts;

3. If we want to ensure the security of our funds, we should at least ensure that we can withdraw all available balances at any time. (Of course, if you don’t want to do this, you can convert it to cash later);

4. Once we have Bitcoin, there will be many investment products available for wealth management, including other financial derivatives. For example, now some large companies have launched a lot of products to provide customers with various services and support the use of Bitcoin, and many other companies have also launched some new solutions. Therefore, when considering whether to participate more, we should also pay more attention to how to avoid this “hot product” between traditional institutions.