To be exact, I was interested in digital currency in the middle of 2017. In the first few months of bitcoin cash forks, I began to discuss with some friends what it all means.
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Before that, I only heard about Bitcoin, which I thought was just an "Internet currency." When I first met Bitcoin, I was not excited at all, and I even forgot about it later.
Like many young people who want to make quick money, if I say that the primary reason for interest in this field is not to make money , then I am obviously lying.
Bitcoin had entered the bull market for a long time, rising from about $200 to more than $1,000. My previous lack of experience in economics, finance or investment, coupled with ignorance and over-optimism, made me believe in some very stupid things.
I don't know how the market works, but I believe that in addition to five times, there will be more returns in the future.
I also tried to do as much research as possible – reading articles, listening to podcasts and watching YouTube videos – but finding rationality in an irrational market is almost impossible.
At the time, everyone was constantly "making money." If your friends and colleagues get ridiculous returns on unknown ICO investments, and you don't do anything, you will start to feel like an idiot.
Because it was very difficult to find reliable and trustworthy information in the currency circle, I created my own website to collect all the best resources I encountered on various topics. It was at this time that I began to doubt Bitcoin.
Although I didn't have the idea of "the bigger the block, the better," like Bitcoin cash, I obviously felt the limitations of Bitcoin in scalability.
There seem to be many new initiatives that promise faster transaction speeds, lower costs, and unlimited scalability. But I think Bitcoin could become the cryptographic world of MySpace (formerly a social networking giant) – inevitably pushed into the dark by a newer, more technologically advanced alternative.
At that time, I lost confidence in Bitcoin and almost sold all the coins.
A few months later, I decided to delve into Bitcoin again, and in the next six months, an idea started to sprout in my mind.
This is not a sudden occurrence. The more I research, the more evidence I have found to support this idea – Bitcoin is probably the only meaningful cryptocurrency.
Why do you say that? This mainly comes down to the following four key factors.
Why is it only meaningful to have bitcoin?
1. Monetary policy
For now, the two most important aspects of Bitcoin monetary policy are: fixed supply time and fixed total. This means that Bitcoin will become the scarcest thing in human history in a few years and will be a good means of value storage.
Opponents of Bitcoin have said that bitcoin is not conducive to payment, and for now, this is a fact. It's not as fast as other digital currencies, and it's not as easy to use as PayPal or even credit cards, but for now, it doesn't need to be that fast.
Its main use is not to pay, but as a means of value storage, which has been performing this function for more than a decade.
Some people think that it is necessary to create a super fast and convenient currency before someone can use it. But this idea is wrong.
To be used as a currency, it must first prove to be scarce and valuable, so that the user has confidence in its future. Only after this foundation is established will it gradually transition from the value storage phase to the transaction phase.
This pattern reappears in the new currency of history, and bitcoin appears in the same way.
2, decentralization + incentive mechanism
To date, Bitcoin is the most centralized digital currency for nodes and miners.
There is a check and balance between the three user groups of miners, developers and users, which can be roughly compared with the situation in the United States: the US federal government consists of three major powers: the legislative, executive, and judicial branches, each of which has its own role. Any department can gain complete power and influence.
The Constitution has achieved this through the law, and Bitcoin has achieved this through incentives.
Most of the altcoin and ICO project incentives can hardly be truly decentralized. Success often depends on a small number of people, of course, or on the premise that they don't donate money.
The computing power of Bitcoin is higher than the sum of all other digital currencies. This makes Bitcoin the safest digital system that few people can destroy.
Because of the high computing power of Bitcoin, it has an overall advantage over other digital currencies. Coupled with the PoW consensus mechanism, the miners are forced to use real resources (electricity) to ensure network security, which makes Bitcoin more secure.
4. Network effect
As I mentioned earlier, Bitcoin is MySpace in the field of encryption, which is about to be subverted by Facebook.
This idea is wrong for two reasons:
1) MySpace lost to Facebook mainly because of News Corp's acquisition and mishandling, and a child safety scandal that occurred in late 2006 – it turned the balance down to Facebook, not technical flaws.
2) Although both bitcoin and social networks rely on network effects (values increase as the number of new users increases), they operate in very different ways.
In the competition of social networks, users will make choices according to the choice of friends, but according to functions, so the switching cost is very low.
So, when MySpace starts to have problems, users can easily jump to Facebook because they don't need to sacrifice anything. The more people often leave, the easier it is for others to leave.
However, the network effects of Bitcoin are quite different.
Miners have a cost of money, they spend millions of dollars on hardware, so they have a lot of incentive to stay to recover costs.
The more miners entering the network, the more secure the network. As it becomes safer, more people will want to use it, thus forming a virtuous circle.
Anyone can copy the bitcoin code and try to go beyond it, but now it seems that they have failed. In fact, there are only two ways to change Bitcoin – propose code updates and reach consensus, or start from scratch. Restarting will lose all accumulated network effects, so Bitcoin competitors need to make significant improvements to influence existing users.
Bitcoin fanaticism controversy
Originally, the term “Bitcoin Mania Powder” was coined by the founder V God of Ethereum to destroy those who were only interested in Bitcoin.
Many currency investors have a negative attitude towards Bitcoin fanatics because they have huge sunk costs (such as investing in a lot of projects outside of Bitcoin); at the same time, those extreme “fanatic powders” often have potential The project is dismissive, and this prejudice comes from the desperation of bitcoin.
I posted on Twitter saying that I only use Bitcoin. After a few hours, someone accused me of being brainwashed, blinded, and succumbed to propaganda and radicalism.
I am not complaining, just want to emphasize how emotional this topic has become. Even in the best of circumstances, clear, rational and profound thinking is difficult, not to mention money.
Those who are really interested in Bitcoin, he needs a lot of research, covering a wide range of disciplines, from economics, finance to computer science, cryptography, to world history and sociology, there is a lot of information to absorb.
This information is unlikely to be collected from one place. In the process of active collection, you will also hear diverse and even completely different views in various places. This process will allow you to better form your own views. Instead of letting one or two biased bloggers instill in you.
I am not saying that all Bitcoin fanatics are rational, and they are not deeply aware of Bitcoin. However, I am convinced that as long as we are committed to finding unbiased sources of information and want to clarify the truth of some of the issues, it is possible to produce a view of "only using bitcoin" or even "mainly bitcoin."
As a so-called "bitcoin fanatic", I don't think that other coins will return to zero, and there will be no "winner-take-all" results, but various forms of cryptocurrency follow the twenty-eight rule: bit The currency accounts for 80% of the market, and the remaining digital currency accounts for 20%.
What is the future market, time will tell us the answer. But one thing to keep in mind before is that we are experiencing one of the most significant changes in history. The events of the next 10 or 20 years may change hundreds of years of history, so we should use as much as possible. The knowledge to arm yourself and prepare for this great change.
(Text: Luc Dossis: Compilation: Martha Card)
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