Bitcoin industry undergoes multiple integration

Summary: The following is the full text of the article: Subversion of the industry in 1999, a 18-year-old named Shawn van Ning (Shawn Fanning) changed the music industry forever. He launched the file-sharing service Napster, which allows users to exchange music files with each other without having to

The following is the full text of the article:

Subvert the entire industry

In 1999, a 18-Year-old named Fanning (Shawn Fanning) changed the music industry forever. He launched the file-sharing service Napster, which allows users to exchange music files with each other without having to buy expensive CDs as before.

Napster subsequently got into a variety of lawsuits and was forced to close in July 2001. But the idea of sharing continues in the form of BitTorrent and other Peer-to-peer file-sharing services; Today, a legitimate music download service follows the Napster brand.

The ups and downs of Napster helped explain the Bitcoin of bitcoin, a digital currency based on similar technology. In January this year, the price of Bitcoin was about $15 trillion, and when the Economist went to press on April 11, prices had risen to $179, and the total value of all Bitcoin in circulation amounted to $2 billion.

With the rapid rise of social media, the nature of circulating capital chasing the latest, and the unease of savers over the Cyprus banking crisis, Bitcoin has recently become one of the world's hottest investment products and, ultimately, a growing bubble under the combined effects of these factors. Like Napster, Bitcoin may eventually collapse, but it leaves an everlasting legacy.

Price volatility

In fact, Bitcoin experienced a big consolidation on April 10, when prices fell to half the original and then regained ground. But BitPay founder Tony Galipe Tony Gallippi points out that the least interesting topic for Bitcoin may be price. BitPay is a company dedicated to helping businesses deal with bitcoin payments. More importantly, Bitcoin can greatly simplify the e-business process.

Bitcoin is not the only digital currency in the market, nor is it the only digital currency that has been successful. For example, players in the virtual gaming community "Second life" can pay through the Linden Dollar, and users of Tencent, a Chinese internet company, can buy virtual products using q coins; Facebook is also selling a virtual currency called "credits".

Unlike these virtual or entity currencies, Bitcoin is not created or regulated by a single regulatory body such as the central bank. In contrast, bitcoin's "monetary policy" is determined by intelligent algorithms. The new bitcoin must be "dug" out by people, that is, users can take part in solving complex mathematical problems through their own computers, and then get the virtual cash after winning.

The bitcoin itself is just a series of numbers. So they are a completely dispersed currency-a "digital gold mine". The inventor of Bitcoin is a mysterious hacker named Satoshi Nakamoto, it may also be a hacker organization. Satoshi Nakamoto created Bitcoin in 2009, and then mysteriously disappeared from the Internet in 2010.

Out of government control

The early adopters of Bitcoin are often tech-loving liberals and gold investors who are determined to break out of government control. Of all the bits traded, "Silk M.I." has the loudest name, a gray trading market hidden in the Tor anonymous network. Users can order goods (usually drugs) on this site and then pay in Bitcoin.

Later, some legitimate companies began to embrace bitcoin, including social networking sites Reddit and blogging platform WordPress. This virtual currency is attractive to businesses. Companies such as BitPay offer bitcoin to dollars, but often charge far less than credit card companies or banks, especially overseas orders. In addition, Bitcoin transactions are irrevocable and retailers will not be wiped out by fraudulent activities.

But Fred Ehrsam, Coinbase co-founder of the Frede Oersam and wallet services company, said bitcoin would need to overcome many hurdles to become a mainstream currency. Coinbase is headquartered in California State, where users can store virtual currencies.

For example, it is difficult for beginners to get Bitcoin, and it is inconvenient to use, easily stolen or lost by hackers, just as paper money is damaged and disappeared in the washing machine. Over the past two years, several Bitcoin trading platforms have seen accidents such as theft and system crashes.

As a result, the bitcoin industry has undergone multiple integrations. At present, Mt.Gox is the world's largest Bitcoin trading platform, which is located in Tokyo, the capital of Japan, administered by two Frenchmen, dealing with around 80% of the world's bitcoin currency. In the event of problems with Mt.Gox and other companies, Bitcoin's trading will be hit hard.

Overcoming Technical Barriers

In fact, April 10 this year, it was due to the Mt.Gox software failure, triggering a large number of user panic, Bitcoin transactions appeared a large consolidation. Moreover, the legal status of bitcoin is unclear. Last month 18th, the US Treasury Department's Financial Crime Enforcement Network (FCEN) proposed regulation of Bitcoin trading. The move suggests it is impossible for the agency to ban bitcoin trading.

At the same time, Mike Hearn, a bitcoin expert, Mack Hern that Bitcoin needs to overcome several technical problems. As more and more people use Bitcoin, the amount of data that flows between users becomes larger, slowing the overall system. Although patches can be released to address this problem, they are difficult to deploy: All users must upgrade Bitcoin wallets and related software. Hearn is also concerned that the use of Bitcoin is growing too fast, ultimately endangering its own development.

The real threat to Bitcoin, however, is competition. Supporters often argue that Bitcoin cannot be made as freely as fiat money. This is true, but the problem is that the new virtual currency is hard to stamp out. Litecoin is one of the virtual currencies that have been developed in lieu of Bitcoin. So far, the currency's users have been limited to a handful of geek fans, but prices have also risen sharply recently. Industry rumors, Litecoin will be in the recent landing Mt.Gox trading market.

Another virtual currency that replaces Bitcoin is ripple. Chris Larsen, co-founder of OpenCoin, a leading Silicon Valley entrepreneur Chris Larsen, said that ripple is easier to use than Bitcoin, with deals that can be completed in seconds, while regular bitcoin transactions take 10 minutes. Ripple was developed by OpenCoin, and its birth was devoid of mystery and had no connection with crime or other suspicious activities.

Frequency of the wind cast favor

OpenCoin is expected to formally issue ripple currency to the public in May. The company has created 100 billion units of ripple currency and promised no further increase in liquidity. In an effort to inject momentum into ripple development, OpenCoin plans to end up with only 75% of ripple money in the market. Existing Bitcoin users can have a certain number of ripple currencies, and eventually anyone who opens a OpenCoin account will get a few units of ripple.

Reserving 25% of the ripple currency would greatly stimulate opencoin to ensure that the virtual currency remains strong: the higher the ripple value, the greater the returns OpenCoin investors receive. April 10, including Anderson-Horowitz (Andreessen Horowitz) Several well-known VCs announced the capital injection OpenCoin.

If the ripple currency succeeds, even bigger financial firms will join the race. BitPay founder Galipe says credit card giants such as Visa may create their own global real-time payment systems. What would it be if any country were to issue new algorithms based money?

At that point, Bitcoin could fall into a crash, but even so, the founders ' achievements were comparable to Fanning. It was the advent of Napster and other file-sharing services that forced the entire music industry to embrace online services such as itunes or sportify. The price of Bitcoin may collapse and users may suddenly switch to another currency, but the impact of this virtual currency on the financial sector will be permanent.