I recently have been thinking of the value of Bitcoin and wanted to know the logic about BTC. As we all know, BTC is a virtual currency based on deflation logic. Due to the deflation property of its design, the greater the degree of attention, the more users, the higher price. What I came to understand recently is some controversial parts:
i.The virtual currency of deflation logic itself does not have an absolute threshold. A dog with a certain programming base can design similar products such as fire coins, water coins, etc. But under normal circumstances only one concept is the most recognised. This is similar to brand barriers. It is clear that Bitcoin currently has this capability. Just like that in ancient Africa, maybe coconut is hard currency, but when trading with westerners, hard currency can only be silver or gold coins.
ii.Bitcoin is basically unable to be physically blocked by the government unless the Internet is banned. Of course, there is still a big risk in Bitcoin. That is, governments forming a legal cognition alliance, and announcing that the circulation of Bitcoin is illegal. Since it can be circulated through the Internet, users can also be locked and located through the Internet. For instance, Pony Ma can’t stop Jack Ma from sending a WeChat red envelope to Liu Qiangdong, but he can know whether Liu Qiangdong received the red envelope.
iii. The value of Bitcoin lies in its trading tax avoidance property. But this is similar to investing in gold. The consumptional and functional application properties of gold are very low, mainly due to currency attributes. The demand side is difficult to estimate and can only be judged by the political and economic forms of international powers. Given its strong destructiveness in subverting government currency, valuations are even harder.
As an investment variety, the risk is indeed too large, mainly because the price does not have a stable valuation framework. Of course, I still don’t understand much about BTC. Record it first.
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