Li Xiong: Looking at the value of Bitcoin from the future

What is the value of Bitcoin? Having worked in the Bitcoin industry for many years, I am often asked a variety of questions, and these questions always come back to the following:

What is Bitcoin?

How do you understand Bitcoin?

Will the price of Bitcoin continue to rise recently?

Is it a good time to buy Bitcoin now?

Can I make money buying Bitcoin?

Do you think investing in other currencies is reliable?

. . .

Well, you asked so many questions, I think it’s meaningless to answer you. Even if I tell you my opinion, it will be useless because you won’t believe it after all. You even think that it’s best for Bitcoin to return to zero now or be banned by the country, isn’t it?

Who owned Bitcoin in the past?

When it comes to this issue, many people may think that Bitcoin is in the hands of early speculators, black market traders, and foreign exchange arbitrageurs. Because they were exposed to it early, they hold a lot of coins. In fact, the reality is the opposite. They may have emptied their wallets long ago, and some people even lost a lot of money because of this, so they have no Bitcoin now. So who holds the Bitcoin?

1. Early Bitcoin adopters

This type of people really forget that they have Bitcoins and have long forgotten their wallet passwords. Because they are one of the first people to come into contact with Bitcoin, they think this thing is new, download the wallet and mine coins on their computers, then throw them aside as game coins and do other things. When Bitcoin becomes popular, oh, it’s too late to regret, and they actually forgot their wallet passwords. To be honest, I am one of them. I don’t know how many coins I have, maybe I have already 10,000 coins. According to incomplete statistics, there are millions of Bitcoins lost on the entire network.

2. Technology Geek

We know that many of the Bitcoin miners in the industry are from a technical background. They were also among the first people to come into contact with Bitcoin. They were fascinated by the technology behind Bitcoin and began to use computers to mine Bitcoin. However, because Bitcoin was not valuable in the early days, they could only exchange 10,000 Bitcoins for a pizza coupon. You should know that 10,000 Bitcoins can now be exchanged for more than 10 million US dollars. However, because they obtained Bitcoin early, they are really rich now.

3. Fiat currency despisers

This type of people are economics nerds who fully understand the nature of currency wars. The country controls the people's wealth by controlling the currency. In order to escape the fate of being controlled, they have been looking for alternative currencies until they encountered Bitcoin. They firmly believe that the value of Bitcoin will continue to be recognized, and that this is currently the only way to fight against legal currency. So they hold Bitcoin tightly in their hands, and the coins in their hands are really valuable today.

Therefore, Bitcoin is among these three types of people. What they have in common is that they all hold Bitcoin and remain indifferent to various roller coaster price trends.

How much will Bitcoin be worth in the future?

Many people are very interested in this question. According to their thoughts, the price of Bitcoin should be able to reach 18,000 US dollars, or even higher. But can this feeling really be realized? If Bitcoin is regarded as an investment commodity, such as calligraphy and painting, stamps, antiques, etc., it may be very valuable in the future, or it may be worthless. To theoretically prove that Bitcoin has great value in the future, the key lies in the following two points:

1. Scope of Bitcoin usage

If Bitcoin is not used, that is, not recognized, its value is zero. Bitcoin will only have value if at least two or more people recognize its value and use it for exchange. The greater the scope of use, the greater the value. Let's look at the legal currency system. The US dollar and the RMB are just a piece of waste paper in the end, but people all over the world recognize it and use it to buy goods, so it has value.

According to this theory, whether the scope of Bitcoin's use expands will determine its future value. I think the scope of Bitcoin's use will expand in the future, and its appreciation is very likely. Although Bitcoin is currently restricted in many countries, some countries are slowly accepting Bitcoin and using it as a currency, such as Japan, South Korea and other countries.

2. Bitcoin’s scarcity

Anyone who knows about Bitcoin knows that the total amount of Bitcoin has been set at 21 million since its creation. Unlike most currencies, Bitcoin does not rely on a specific monetary institution to issue it. It is generated through a large amount of calculations based on a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transactions, and uses cryptographic design to ensure the security of all aspects of currency circulation. The decentralized nature of P2P and the algorithm itself can ensure that the currency value cannot be artificially manipulated by producing a large number of Bitcoins. The design based on cryptography can make Bitcoin only be transferred or paid by the real owner. This also ensures the anonymity of currency ownership and circulation transactions. The biggest difference between Bitcoin and other virtual currencies is that its total number is very limited and has extremely strong scarcity.

Therefore, regardless of technological progress, algorithm tampering or attacks, Bitcoin will definitely be scarce in the future, and its value will become more valuable as the scope of user use expands and the total economic volume grows.

In summary, there is no need to pursue whether you can make money on Bitcoin in the past. The key is to look at future investments. If you feel that the risk is high in the current speculative environment, you can adopt a fixed investment method and then hold on to the Bitcoin in your hands. You will become very rich in the future.