Analysis: Three major models of Bitcoin transactions in the future

In the end, Bitcoin died in China: by October 31 at the latest, all domestic Bitcoin and other virtual currency trading platforms will be closed. The online rumored liquidation time is as follows:

Of course, this does not mean that Bitcoin is really dead. The regulators stopped the Bitcoin trading platform, not Bitcoin.

As early as 2013, the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission jointly issued the "Notice on Preventing Bitcoin Risks". It clarified the nature of Bitcoin, stating that Bitcoin is a specific virtual commodity by nature, does not have the same legal status as currency, and cannot and should not be circulated and used as currency in the market. However, as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in Bitcoin transactions at their own risk.

To date, the document is still valid. In other words, Bitcoin is still legal in my country, which also leads to the following question: After my country announced the closure of Bitcoin trading platforms, how will the Bitcoin trading model develop in the future? Let Lao Wu analyze it one by one.

1 Overseas prosperity remains, domestic layout is accelerating

Data shows that after China banned Bitcoin trading, Japan's Bitcoin trading volume grew rapidly in the short term. According to Cryptocompare, the Japanese yen's Bitcoin trading volume has accounted for 46% of the global total trading volume, the US dollar ranks second with more than 30%, and the RMB trading volume has dropped to 7%. my country has lost its dominance in Bitcoin.

From a global perspective, the Japanese Financial Services Agency has recently approved Coincheck's Bitcoin exchange license. Malaysia, Mexico, the United Kingdom, the United States and other countries are also actively exploring ways to regulate Bitcoin and other encrypted assets. Bitcoin is gaining recognition and attention from more and more countries. International Bitcoin trading platforms will surely continue their previous prosperity and become the main battlefield for Bitcoin trading in the future.

The current international Bitcoin trading platform transaction volume rankings are as follows:

According to a domestic player, Bitcoin trading is global, not just in China. Even if the domestic trading platform is closed, we can continue trading on foreign Bitcoin trading platforms. This is why Bitcoin can rebound after every plunge.

It is understood that domestic trading platforms will focus on developing overseas fiat currency business and pure currency trading business. At present, the overseas version of a domestic website supports direct account login, which means that domestic platforms have begun to operate user migration.

However, this does not mean that Chinese people can easily "go into the sea". The first problem is how to choose a reliable platform. Secondly, even if a relatively reliable platform is found, if you want to convert the earned US dollars into RMB, you still face the problem of foreign exchange management. It is understood that the annual foreign exchange purchase limit for individuals in my country is 50,000 US dollars, which limits the total amount of assets invested by each player, and the richer the restrictions, the stricter the restrictions.

According to the Wall Street Journal, my country's regulators have decided to completely ban Bitcoin trading channels in China, not just closing Bitcoin exchanges. The broader regulatory measures may include prohibiting mainland China from accessing external Bitcoin exchange websites, such as Coinbase in the United States and Bitfinex in Hong Kong.

In addition, there are rumors that some departments have been able to restrict Bitcoin transfers... (I don’t believe it anyway)

The above-mentioned problems will become stumbling blocks for Chinese people to enter the sea business.

2 Coin-to-coin transactions are booming, and the coin standard is about to make a comeback

You must have heard of the "monetary standard". It means that in international economic activities, a country, due to economic conditions or policy considerations, uses law to fix its own currency to it as a standard for measuring value and the final means of settlement of international transactions.

The "Bitcoin standard" refers to using Bitcoin as a standard to measure other currencies (Ethereum, Litecoin, etc.) and to conduct currency-to-currency transactions based on this standard. Currency-to-currency transactions have also changed from legal tender such as the RMB and the US dollar to Bitcoin standard.

Some people say, if I earn bitcoins, what if the price of bitcoins falls, then I still don’t make money? Lao Wu did not comment on this. However, the most important point to understand about currency-to-currency trading is the one mentioned above: Bitcoin standard. This is a right that only Bitcoin believers have.

Have you heard of "officialism"? When 99.99% of people are hesitating whether to give a month's salary to their leaders, some people have already used their annual income to honor their leaders. Or they only care about dedication and not salary at work, and they are just trying to gain political capital and climb up. In the eyes of these people, money is just a few pieces of waste paper, and the coveted official position is a priceless treasure. Yes, there is only one mayor's position, which is definitely more valuable than the waste paper printed at a rate of 14% every year.

Have you heard of the "gold standard"? On August 19, 1948, the Nationalist government promulgated the "Financial and Economic Emergency Order" and used violence to rob the people of their gold before retreating to Taiwan. At the same time, the gold yuan was depreciating at a rate of hundreds of times a day, not even as good as toilet paper. Abroad, after the collapse of the Bretton Woods system, the dollar was decoupled from gold, and the exchange rate of one ounce of gold rose from 35 US dollars to 850 US dollars. Did the United States abolish the "gold standard" to print money and rob the people? If the people do not adhere to the gold standard and follow the country to adhere to the paper standard, they are really crazy.

For Bitcoin believers, coin standardism is the future of losers. Today, now, and in the present, we have found such an asset. It has limited production, can be transferred frictionlessly around the world, is easy to hide, and cannot be seized violently. So why don’t we convert all assets into “Bitcoin” without hesitation and adhere to “coin standardism”. If we don’t do it well, Bitcoin may be “immutable wealth for all eternity.”

The above three paragraphs are excerpted from the official account: Cryptocurrency Defense

At present, this kind of pure currency business of currency-to-currency trading model can be legally operated in many countries. As to whether it can become mainstream in the future, it depends on the size of the group of Bitcoin believers. Once it exceeds 100 million, it will be unstoppable.

3 OTC transactions are everywhere, and everyone is a "Taobao" store manager

While regulators have halted on-exchange transactions mediated by platforms, over-the-counter transactions of “handing over money with one hand and receiving coins with the other” have heated up again.

Over-the-counter (OTC) trading refers to trading activities that are not conducted in an exchange but in the over-the-counter market.

In the world of Bitcoin, everyone has a wallet, and each wallet has a corresponding address. Bitcoin can be withdrawn from one address and transferred to another address, and the withdrawal operation is completed without converting to RMB or other currencies. In over-the-counter transactions, one party transfers funds to the other party through Alipay, WeChat or bank transfer, and the other party transfers the Bitcoin to the payer's wallet.

Take LocalBitcoins, the world's largest over-the-counter bitcoin trading platform, as an example. As a peer-to-peer exchange rather than a centralized platform, LocalBitcoins allows users to purchase digital currencies in an over-the-counter manner, so users can find online trading partners and complete transactions more quickly. In the past few days, LocalBitcoins' weekly trading volume has increased significantly, with the platform's trading volume reaching US$74 million this week. Since the closure of domestic exchanges, LocalBitcoins' RMB trading volume has increased 42 times.

According to Bitcoin.com, Asian OTC Bitcoin trading platforms such as Richfund.pe have also processed more Bitcoin OTC transactions settled in RMB in the past week. Some analysts believe that regional OTC service providers such as Richfund have processed more Bitcoin transactions.

The last time OTC trading volume surged was at the beginning of this year when regulators entered the three major exchanges, Huobi, OKCoin and BTC China. At that time, as exchanges suspended withdrawals, OTC trading volume once approached 100 million yuan per week.

Now, after the end of on-exchange trading, various OTC trading guides and websites have been circulated on various websites, many of which are built abroad. Some people have also set up relevant QQ groups to conduct corresponding transactions. However, Tencent has also blocked a large number of QQ groups recently, so don’t blame me for not reminding you!

In general, as long as there is no large-scale ban on Bitcoin in the world, trading platforms will still exist. If you are optimistic about the long-term value of Bitcoin, you can ignore all the current policies on Bitcoin. As long as it is within your risk tolerance, you can continue to hold Bitcoin, because Bitcoin may still soar in the future. But if you are a small-volume and short-term speculator, it is recommended to withdraw cash early and wait and see.

Finally, I would like to say that whether you continue to hold or sell it, you should adjust your mindset and look at the investment risks of Bitcoin rationally. If you win, you win, and if you lose, you lose. If it affects your daily life, it will not be worth it.