Bitcoin first traded 0.03 dollars to the recent breakthrough of the 900 dollar mark

From the 2010 Bitcoin first trading 0.03 U.S. dollars to the recent breakthrough of the 900 dollar mark, bitcoin three years soared 30多万倍.

November 19, bitcoin price breakthrough 900 U.S. dollar mark, bitcoin China online trading price is once as high as 6590 yuan. The frantic price allowed Bitcoin to enter the public eye overnight.

Supporters believe bitcoin is returning to its real value, and that, in contrast to real-world gold, Bitcoin is expected to become the base currency in the Internet arena. Opponents scoff at it, thinking it's just "a bubble that everybody blows up."

In the bustling bitcoin, is it money or merchandise? Is the future an electronic gold or a bigger Ponzi scheme? Will the Internet virtual currency eventually reverse the real economy or eventually die out?

From "money" to "financial products"

Everything about Bitcoin dates back to November 1, 2008, a hacker claiming to be Ben Cong (Satoshi nakamto) posted a discussion on a secret cryptography review group stating his new vision for electronic money-Bitcoin, a "secret currency created using computer networks." "This currency is generated through a series of complex network algorithms that are not issued by a company or central bank or linked to any real currency, but can be used to buy goods and services in the real world.

"Bitcoin" is a kind of network virtual currency, which is computed by a specific algorithm. The use of network transactions, in the network and real life with the real money has the same function of payment. Its main features include: to be centralized, to circulate globally and to have exclusive ownership.

Bitcoin entered China, but at first it was just a fad among young people. What is truly known to the public is that during the Sichuan Lushan earthquake of April this year, the "one Foundation" of the Public welfare organization received hundreds of dollars in donations. This has become a landmark event in China's development.

During this time Bitcoin experienced the first crazy appreciation. In mid-November 2012, bitcoin traded at around 11 dollars. At the beginning of 2013 and April, the price of Bitcoin soared from $13 to $250, and then quickly fell back to around 70 dollars. It was not until July this year that the price hike in bitcoin began to catch up with the rockets, and in the process Chinese investors were "doing their part".

18th, China's largest Bitcoin trading platform, "Bitcoin China," announced a round of investment in the speed of light An Zhen China venture capital and the US speed of light venture investment, with a total financing of USD 5 million. On the same day, the bitcoin transaction price exceeded 600 dollars.

In recent weeks, bitcoin China has traded more than the world's two other bitcoin trading platforms, making it the world's largest trading platform for Bitcoin. At present, "bitcoin China" day the highest trading volume of more than 100,000 Bitcoin, the highest daily turnover has more than 200 million yuan.

There are two ways to gain a bitcoin. One is "digging", using a personal computer to download software and then running a specific algorithm to communicate with a remote server to get the corresponding bit currency. The other is bought on several well-known trading platforms, like buying or selling foreign exchange, in accordance with the prevailing premium.

As a result of the setting of the bit currency acquisition method, every 4 years to get the difficulty doubled, as of 2140 Bitcoin will reach the extreme value of 21 million. At present, some people have used the "digging" means to obtain Bitcoin, more and more directly through the trading platform to buy or sell, the value of the crazy rising people think it seems to be a win-win business.

Some experts believe that the sharp collapse of bitcoin has far exceeded the monetary function, and the previous tulip bubble, pu ' er tea bubble no essential difference. The financial channel special commentator Yeh Tan said Bitcoin would be difficult to become the world's currency, in fact, we see that bitcoin is actually traded as a variety of futures options, that is, it has more financial attributes, it has evolved into a financial derivative, not a currency, As a financial derivative, the risk is very large and uncontrollable.

Price "roller coaster"

Why is bitcoin so crazy in this round? One of the incentives, analysts say, was the announcement of several good news on 18th, including "Bitcoin China", which announced the financing of $5 million trillion, and representatives of the Justice Department and the American Stock exchange said Bitcoin was a legitimate financial instrument.

Bitcoin was a "legitimate" financial service that gave Bitcoin a boost at a hearing on Bitcoin at the U.S. Senate Committee on Homeland Security and government Affairs on November 18, local time.

The New York Times said it was the first time the US government publicly recognized Bitcoin's legitimacy and meant that the virtual currency was a big step toward the mainstream.

Bitcoin quickly fell after the mad hurricane and fell back to about 650 dollars that day.

Ling, a network platform that specializes in bitcoin trading, says that no single investment can support a long, fast-growing boom that often collapses after a spike, which is not uncommon in the history of Bitcoin.

On June 19, 2011, the MtGox Trading center in the United States led to the theft of a user's bitcoin because of a security breach, causing the price of Bitcoin to fall from 18 to 1 cents in April 2013, when the price of Bitcoin rose to 1 bitcoin to $266, but then plunged rapidly, Fell by 60% a day, to a minimum of 1 bitcoin to 105 dollars.

"The current Bitcoin trend has reached an ' irrational exuberance ' that ignores any negative news, and could plummet at any time," said Liu Yan, an analyst with long-term interest in bitcoin. ”

The risk of Bitcoin, however, is not just currency fluctuations. "Owning Bitcoin means only a bunch of computer code, and there is no real thing." "The virtual nature of the Liu, a master of computer science at Taiyuan University of Technology, which invests in bitcoin, says," is that it will be attacked by cyber viruses and hackers. ”

In the 360 Security Center, the third quarter of 2013 security report, bitcoin investors are facing the "mining Trojan Horse", Investment account theft and the fall of the trading market three types of threats, but no investment bitcoin, or even completely do not understand Bitcoin, there is a Trojan control computer "digging" the risk.

The "future" of Bitcoin

What will the future of Bitcoin be, a new virtual asset, a digital bubble or replaced by another virtual currency? The industry has divergent views on this.

Proponents believe that in an environment where real social inflation is hard to contain, the value of Bitcoin as a stable digital asset will be recognized by more and more people, and prices will be bullish for a long time. "The design of Bitcoin is better than the traditional currency, its operation does not depend on the central bank, it is a kind of centralized and self-improvement monetary system." No one, no institution, no government can manipulate the monetary aggregates of bitcoin, and therefore cannot produce inflation. It has a certain, and can be infinitely segmented characteristics, so that it has become a hard currency potential, the future will become the Internet world's base currency. "said one person involved in bitcoin trading.

Million Engine Consulting CEO Ruzenwang previously said that virtual currency is the inevitable outcome of the Internet ecology. Because the internet's consumer demand is extremely dispersed and messy, if each transaction through renminbi transfer payment, procedures more trouble, and through the purchase of game currency, Q-Coins and other virtual currencies, transaction costs have been reduced.

The singer thinks, Bitcoin has many bubbles, the maintenance bubble "gimmick marketing" will end, the follow-up development is not optimistic. Liu Yan, a financial analyst, argues that Bitcoin is a "game of speculators" and must constantly use new gimmicks to lift the value of Bitcoin in order to attract buyers, or else it will become a hot potato.

The heat of Bitcoin also spawned the development of other virtual currencies, which, according to statistics, now has more than 80 virtual currencies, and the 2011 Wright Dollar is considered a powerful replacement for Bitcoin.

Although there are differences in the development of Bitcoin, the "need for regulation" has become a consensus. The Fed Chairman Ben Bernanke also said that Bitcoin could pose a huge challenge to financial regulation, even though it "sang more" to Bitcoin in a letter.

Liu Yan points out that Bitcoin itself is a product of the internet age, and that its accounts and platforms can be offshore, and that it now needs to step up its regulatory efforts from "import" and "Export" banks.

Chen Haojan, a professor at the School of Law at Fudan University, suggested that China's regulation of bitcoin should be put on the agenda as one of the most active Bitcoin trading markets. How to ensure the security of funds and Bitcoin, whether the organization of traders legitimate, whether the qualification, all need to be placed under supervision.

Bitcoin core payment function is becoming more and more weak, the nature of financial derivatives more and more strong, Bitcoin eventually become the basic currency of the virtual world, or just an "internet test", only time can give the answer.