As mentioned above, the Ethereum empire is gradually declining, so the currency circle ultimately believes that BTC can be independent?
In essence, in the world of blockchain, there are only two kinds of coins—-bitcoin and other coins, and their value connotations are completely different.
For Bitcoin, 90% of the value is the commemorative value and 10% of the value is the use value.
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Bitcoin has opened up the world of blockchains and has become a totem of blockchains. Due to its special status, it has uniqueness, non-reproducibility, non-renewability and other characteristics, very similar to stamps, famous paintings, antiques, etc. Bitcoin can Said to be the first digital souvenir in human history.
For other currencies, 10% of the value is the commemorative value and 90% of the value is the use value.
Compared with Bitcoin, most of the value of other coins comes from specific business support. For example, Ethereum is the fuel for running smart contracts. If there is no DAPP on the Ethernet, there is no use value, and the price is close to zero.
Then, can Bitcoin be a fairy, and the price will rise indefinitely?
The answer is obviously no, the price of Bitcoin also has its own gravity and cannot fly into space. So what is the gravity of Bitcoin?
Some people say that it is the cost of miners. But I have to say,
Unlike traditional goods, bitcoin is the price that determines the cost, not the cost to determine the price!
To understand the reasons for the change in bitcoin cost, we must first understand the nature of the Bitcoin consensus algorithm. As a decentralized system, the basis for supporting its stable operation is the consensus algorithm, whose power is a protective wall of the system. However, there is a cost of consensus protection. Consider the following two situations. One is that the total market value of Bitcoin is much larger than the cost of mining machines, such as a market value of $100 billion, and miners are only protected by mines worth millions of dollars. Then financial crocodile can easily control the power through economic means, and then destroy bitcoin. The second is that the total market value of Bitcoin is much smaller than the cost of mining. If there is only $100 million and the $1 billion mining machine is running, the miners are completely loss-making and no one will continue. Obviously, both of these situations will cause Bitcoin to fail.
Therefore, Bitcoin's POW consensus algorithm is designed to have certain scalability. Through economic means, the power of protecting bitcoin is always matched with its market value. Its operating cost is designed to scale with its supported market value, when BTC demand As the price rises, the market value will increase, and the mining profit will increase, which will attract more miners to maintain safety, and vice versa! It is repeated to ensure that the system can adapt to value bearers of all sizes.
In fact, the gravity of the bitcoin price is the altcoin!
When I heard this conclusion, many people’s first reaction was to think, is it reversed? It should be Bitcoin that determines the altcoin. Actually, it’s true because
The value of the carrier as a symbolic meaning depends on the position of the symbolic object in the world.
For example, the value of the jade of Emperor Wu of the Han Dynasty is much higher than that of the Xiongnu of the same generation. In fact, it is also a jade, and the cost can be a few dollars? It was only because of the important position of the Han Dynasty in history.
So exaggerated, the currency is all bitcoin. The more prosperous the blockchain, the more significant the significance of Bitcoin, the higher the price. The final price of Bitcoin depends on the future development of the blockchain. If the blockchain proves to be meaningless technology, Bitcoin It will also be worthless.
This is also the reason why the market value of Bitcoin accounts for the total market value, and when it reaches a certain height, it will definitely fall back.
Summarized in one sentence, the development of the altcoin determines the demand for bitcoin, the demand for bitcoin determines the price, and the price of bitcoin determines the cost of mining.
So what is the future of the blockchain?
Don't worry, BTC and Ethereum have opened a door to the future of the new world. From this door, we see infinite light!
There are four series of future thinking series in the currency circle, which are (1) the twilight of the Ethereum Empire, (2) whether BTC can be independent, (3) who will defeat Ethereum, and (4) who we will earn in the currency circle. ? Welcome attention!
About the author: East of Beijing, public number: bjzdblockchain. Micro signal: beijingzhidong. Senior blockchain investor, engaged in technical research work.
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