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Bitcoin Is Abandoning Money Functions
On November 1, 2008, against the background of the global financial crisis, a person who claimed to be Satoshi Nakamoto published the Bitcoin white paper Bitcoin: A Peer-to-Peer Electronic Cash System on the P2P foundation website. Stated his new vision for electronic money—and thus Bitcoin was born. He refers to Bitcoin as an electronic payment system based on cryptographic proof rather than trust, allowing any two willing parties to transact directly without the need for a trusted third party, Bitcoin, January 3, 2009. Genesis block is born.
It can be seen that in the original intention of Satoshi Nakamoto, Bitcoin is a currency, an electronic currency that can replace legal tender. It does not belong to any country or financial institution, and is not subject to geographical restrictions. It can be used anywhere in the world. Redeem it anywhere and buy real-life items.
On May 22, 2010, a developer named Laszlo Hanyecz spent 10,000 bitcoins to buy two copies of Papa John ( Papa Johns pizza, which is recognized as the first real-world transaction in Bitcoin.
And now, 10 years later, bitcoin has almost never really functioned as a currency, people simply buy and sell bitcoin, people buy bitcoin, people hoard bitcoin, people just use bitcoin as a speculative asset . On the other hand, although the total transaction volume of Bitcoin has increased surprisingly since its inception, it is a pity that such an increase may not have much to do with Bitcoin itself, and it just happened to catch up with the Internet. Trends, a piece of data may illustrate this point, on average, there are now about 325,000 bitcoin transactions per day. On the other hand, there are about 1 billion transactions per day in online UnionPay payments, and although the proportion of Bitcoin transactions has increased, it is still not worth mentioning. At the same time, removing the false transaction volume of existing platforms, most of Bitcoin transactions are just transactions, only a small part is used for actual goods and services, and most of these goods and services are illegal goods and service.
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While still nascent, Bitcoin has been extremely volatile during its relatively short lifespan. Its volatility far exceeds that of gold and stocks, which means that even if investment institutions add a small amount of Bitcoin to traditional asset allocation, large fluctuations in Bitcoin will still have an impact on the overall portfolio. The most obvious example is that although some traditional investment institutions such as Grayscale Fund are willing to try Bitcoin, we can see that in their investment portfolio, except for Bitcoin, there are other cryptocurrencies.Investment institutions are unwilling to put Bitcoin in a portfolio with traditional gold and stocks.secondary title
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Bitcoin always faces regulatory risk
As mentioned above, a small percentage of Bitcoin transactions are for actual goods and services, and of those goods and services, the majority are illicit goods and services. The anonymity and irreversibility of bitcoin transactions means it is ideal for facilitating illicit transactions. At the same time, this is one of the main reasons why governments and central banks seek to regulate cryptocurrencies.
On January 7, 2014, affected by related issues, China Taobao issued an announcement announcing that it would ban the sale of Bitcoin,LitecoinInternet virtual currency and other commodities.
On February 26, 2014, the Democratic Party of the United States sentU.S. Federal GovernmentA number of regulatory authorities have issued an open letter, hoping that relevant agencies can pay attention to the status quo of Bitcoin encouraging illegal activities and disrupting financial order, and requesting that actions be taken as soon as possible to completely block the Bitcoin.Electronic money。
January 11, 2017Peoples Bank of China Shanghai Headquarters, Shanghai Municipal Office of Finance, etc. conducted on-site inspections of Bitcoin China, focusing on whether the company carried out credit, payment, remittance and other related businesses without permission or license; the implementation of the anti-money laundering system; hidden dangers to fund security, etc.
In June 2018, France conducted a large-scale investigation of Bitcoin trading websites in its territory and issued a warning to people that Bitcoin has the risk of bubble bursting at any time.
In April 2019, Russia issued a warning to its cryptocurrency teams in its territory and set up a negative list.
Bitcoin has never stopped being investigated by regulators. This is why traditional institutions have always been cautious about Bitcoin. If there is any trouble, traditional investment institutions will quickly withdraw. After all, investment institutions cherish its feathers more than any other industry.
On December 23, 2020, the U.S. SEC announced that it would investigate XRP. The next day, the first batch of grayscale funds that tried Bitcoin and other encrypted currency trusts issued an announcement that they would suspend the investment portfolio of Bitcoin and other encrypted currencies. On January 12, After a 20-day suspension, Grayscale Fund reopened cryptocurrency fund subscriptions and accepted new investments. In this new cryptocurrency portfolio, Grayscale suspended the purchase of XRP.
It is not difficult to admit that Bitcoin is revolutionary at all. It has achieved decentralization, Internet equality, and a free interaction model. However, the huge fluctuations in market value, the concentration of a large number of Bitcoins in the hands of a few people, and the original intention of currency are the current Bitcoin. development point. Before Bitcoin can be taken seriously by traditional investment institutions, there must be many challenges to be solved.
