The logic behind the surge in Bitcoin in early 2017

Not describing or praising Bitcoin in a positive way is a kind of political correctness on Zhihu.

I'm about to fly against the wind, get out of the way.

Bitcoin is a neutral currency that is not reactionary in any way and rejects any ideological over-interpretation.

I try my best to describe the Bitcoin world I see in a language that everyone can understand.

The full text is 5134 words and takes 5 minutes to read.

<1> Holly Coin Circle

Background of the answerer: Bitcoin enthusiast, Master of Sociology, 24 years old, starting a business. Joined the Bitcoin circle for more than three years, experienced the roller coaster of the coin price in 2013, survived the cold winter of the cryptocurrency media, and worked in the mining machine industry in the capital for less than nine months. An early entrepreneur, please take care of me.

When I was in school, the price of Bitcoin was 500 RMB. If I had listened carefully to the advice of @Blockchain, I would have become financially independent today. After graduating in June 2016, I worked in a famous small animal mining company in Beijing. In November, I resigned and came to Shenzhen to start a blockchain and Bitcoin business with my friends. The company's main business is mining.

Yes, when I first came into contact with Bitcoin, I was very excited. I would talk about Bitcoin with people around me and recommend it to everyone I met. At that time, the price of the currency was 2,000, and many people thought I had joined a pyramid scheme and felt sorry for me.

In June 2014, I wrote an article about autism and posted it on Weibo. Many people knew me. Because in the early days of Bitcoin development, few people really understood Satoshi Nakamoto's white paper. Many people didn't understand it. At that time, I came into contact with some speculators who felt that they didn't need to understand. In August, I participated in the humanitarian relief of the Ludian earthquake. As a reporter of the first public welfare organization of digital currency, Warm Four Seasons, I arrived at the scene as soon as possible and spent a very meaningful year. The early digital currency circle was like this, a warm, sunny, positive community full of human care. At that time, I met a group of early Bitcoin enthusiasts: Babbitt Changjian, Warm Four Seasons Mo Ke, robin, HAOBTC Xingkong, Babel Tower Bear Xiaoer, Yunbi Laomao, Bikan Lao Liu, Changyong Teacher, Chuxiahu, Xiaoyi Da Hongfei. My senior year and research monk career were accompanied by the development of China's Bitcoin industry. China's three major exchanges, the earliest BTCC Bitcoin China, when I entered the circle, OKcoin Exchange had just been established.

<2>Bitcoin price analysis

Since the development of Bitcoin, there are many factors affecting the price: international politics, RMB exchange rate, foreign exchange policy, gray industry rigid demand, black industry rigid demand, blockchain technology development, central bank attitude, etc. In the following article, I will list the possible factors for each period of Bitcoin price fluctuation.

After November 2013, the price of the currency plummeted, from a high of 8,800 points to 4,000 points, and then gradually fell, with the bottom reaching 900 RMB. In 2014, the Bitcoin circle entered a cold winter. Some people chose to leave, while others chose to grit their teeth and continue to work. Those who could continue to mine continued to mine, and those who could not continue to build platforms. In 2015, the price of the currency began to rise steadily. The tightening of foreign exchange policies had an impact on the price of Bitcoin.

1. Domestic blockchain technology is expanding rapidly. On December 30, 2016, the State Council issued the "13th Five-Year Plan for Informatization", which explicitly included blockchain technology in the plan. By 2020, the construction of Digital China will achieve remarkable results, and the informatization capacity will be among the best in the world. On December 31, 2016, the Guiyang Municipal Government Information Office issued the "Blockchain Development and Application White Paper", focusing on the overall design of blockchain technology for government affairs, people's livelihood, and business development.

2. The central bank will launch digital currency in 2017. The central bank released a recruitment notice saying that the People's Bank of China Printing Science Research Institute wants to recruit 6 people with master's and doctoral degrees to carry out digital currency research and development. The central bank's digital currency will be launched in 2017.

3. Domestic media reported on January 1, 2017, CCTV Finance’s official Weibo account published an article listing the six most profitable investments in 2016.

In 2016, the price of Bitcoin was soaring that it became the world's best performing asset. In September 2015, the U.S. Commodity Futures Trading Commission officially classified Bitcoin as a commodity futures, and its underlying technology blockchain has been recognized by many financial institutions around the world. Bitcoin, a digital currency that once created madness and bubbles, once again became a safe-haven investment pursued by investors in 2016. On December 29, the highest price of Bitcoin reached $997 per coin, and the price of Bitcoin in China was close to 7,000 yuan per coin, an increase of nearly 180% from the lowest price at the beginning of the year. The media's attention started with this news from CCTV Finance. As soon as this news came out, almost all media platforms began to compete to report on Bitcoin. In the new year, the trend of Bitcoin was extremely fierce.

4. The pace of global bitcoin development is accelerating. On January 2, Microsoft officially announced that Excel 2017 will widely accept bitcoin. The price of bitcoin rose to $1,000 and received a lot of attention on Weibo.

5. International monetary and economic shocks At the end of 2016, the Federal Reserve raised interest rates, the US dollar flowed back, and the global currency market was shaken. In order to combat the credit crisis in the market, India's currency reform, Venezuela's demonetization crisis, Brexit, Trump's election, Italy's referendum and other economic impacts.

6. RMB depreciation From 2013 to 2016, the RMB has been depreciating and the US dollar has been appreciating. In 2016, the RMB depreciated by 7%, the largest depreciation in 20 years. The US interest rate hike at the end of 2016 means that the supply of US dollars in the US market will decrease, the return on funds will increase, and the United States will attract more international capital investment. Capital outflow will cause the RMB to continue to depreciate, forming a vicious circle. Goldman Sachs once predicted in a report that the RMB exchange rate would be 6.95 at the end of 2016 (overfulfilled) and 7.30 at the end of 2017. Let us wait and see.

7. Domestic foreign exchange control (pay attention, this is the key point!) It’s the end of the year on December 28, 2016, and the central bank is very busy. The central bank issued the “Administrative Measures for Large-Value Transactions and Suspicious Transaction Reports of Financial Institutions”, which adjusted the daily single or cumulative transaction limit for individuals to RMB 50,000. The annual foreign exchange limit of USD 50,000 for individuals remains unchanged, but the difficulty has increased significantly.

On December 28, 2016, the central bank issued the "Regulations on the Management of Large-value Transactions and Suspicious Transaction Reports of Financial Institutions", which adjusted the daily single or cumulative transaction limit for individuals to RMB 50,000 and the annual exchange limit for individuals to US$50,000. The M2 of 153.04 trillion in 2016 was nearly four times the 40.34 trillion in 2007.

Starting from January 1, 2017, regardless of whether you purchase foreign exchange at a bank counter or through online banking or mobile banking, you will need to fill out the "Personal Foreign Exchange Purchase Application Form" and clearly state the foreign exchange purchasing user. Of course, there is still the risk of being suspected or rejected.

So, if you have $50,000 to remit overseas, you only had to do it once before, but now you need at least five times. On the day when the foreign exchange policy was tightened, the price of Bitcoin rose by more than 20%.

Once the policy was released, it directly blocked the way for individuals to purchase foreign currency to buy properties overseas and invest in US stocks, and the threshold for currency exchange also soared.

The fuse of Bitcoin after the new year: Chinese buyers' dual concerns about the depreciation of the RMB and capital controls made Bitcoin the best safe-haven asset.

The above 7 factors are the direct driving factors of Bitcoin in recent times. There are two more key points that I would like to mention together. There are indeed a large number of gray and black industries that use Bitcoin, such as drugs and arms on the Silk Road and the dark web, but cyber hackers are also a large contributor to Bitcoin ransom.

There is also an unknown organization that uses Bitcoin to illegally raise funds in large quantities.

In addition, the gambling and gaming industries in the digital currency circle have also made significant contributions to the stable application of Bitcoin, which will be omitted here.

Judging from the recent significant increase, the contribution of people to the price of the currency before was not as great as the capital influx after the foreign exchange control, which indirectly shows that another class of people are gradually pouring into the Bitcoin market, and also shows us the powerful power of capital. So far, the circulating market value of Bitcoin has exceeded 100 billion.

It is now 4:00 a.m. on Thursday, January 5, 2017 and the real-time price of Bitcoin is 8410 RMB.

<3>Some advice for young people

It is said that only 0.01% of people can understand Satoshi Nakamoto's paper, and their appearance is higher than that of 78% of ordinary people.

For me, the Bitcoin community is different from Douban, Bilibili, and Zhihu. It is a community that highly yearns for freedom, and closely binds independent individuals through a decentralized spiritual contract. The first miners were all defenders of ideas, not driven by interests.

Friends who want to learn about Bitcoin now, please take a serious look at my opinions, really.

The first step is to study Bitcoin and blockchain technology seriously

Second, please don’t invest blindly before you understand Bitcoin

The third rule is not to mine before you understand Bitcoin.

Article 4 If you have any difficulties in learning, please contact Babbitt http://8btc.com

Article 5: Sister Bohe is not omnipotent, she is not an economics major, and she has blind spots.

Article 6: Which company has the best blockchain technology?

@LatteBig

Article 7: The waters of altcoins and competing coins are very deep, and there is information asymmetry. Be cautious and cautious. Daddy said that you should learn English for life. Improving is always a good thing.

1. Study hard and make progress every day

Often, people in the cryptocurrency world have a sense of loneliness, especially those who live in different places. They don’t even dare to mention Bitcoin to people around them. Bitcoin has been a taboo word for a long time. 13 years after its launch, Bitcoin was demonized by the media. The collective emasculation and political correctness of the media have made Bitcoin a banned product. Today, I stand up to tell everyone to look at it dialectically, understand it first, and then comment on it.

If you don't understand it, fear it, reject it, slander it, or even humiliate it, it's all very stupid. The tulip bubble and the Ponzi scheme are the blessings given to Bitcoin by many media and economists. People who are ignorant and fearless are terrible. I hope that all wise friends will not look at the development of a new technology with tinted glasses.

2. Don’t invest blindly before understanding Bitcoin

For the general public, Bitcoin is indeed a bit complicated. You need to have computer knowledge, mathematical knowledge, and cryptography knowledge, such as mining. Please dig deeper.

You also need a lot of hardware and software skills, so there are very few people who can thoroughly understand and recognize Bitcoin. In the early days of the Bitcoin circle, you can still meet people like Hu Yilin, Bitcoin, the King of Currency, and ahr999, but now they have basically faded out of the currency circle. Now, it’s not too late to read Satoshi Nakamoto’s paper "Bitcoin: A Peer-to-Peer Electronic Cash System"!

Get to know Satoshi Nakamoto, learn about blockchain technology, and follow Zhihu @拿铁大lamer @薄荷凉幼 @blockchain. Start from the beginning, starting with asymmetric encryption, public key and private key, which you don’t know, and how to download a correct client wallet. Take your time, it will slowly reveal its own mysteries.

Remember, don't buy Bitcoin until you understand it.

Don’t refuse to understand. You need to know what is happening in the world now. Blockchain technology will soon penetrate into all aspects that require trust. Don’t think that finance and economy have little to do with you. In the near future, it will be everywhere around you.

Don't refuse to understand any changes around you because of prejudice and slander. Embrace it and don't be afraid of it.

It makes you lose all your money, it makes you bankrupt? I believe this is possible, but I want to ask, if you lose money in a casino, do you blame the dice or the casino owner? If you lose money in stock speculation, who do you blame?

Speculation itself is a game of market mechanism and luck. If you don’t understand Bitcoin technology, market mechanism, how deep the water is, and don’t read the Bitcoin investment risk warning, and have a bad mentality, don’t play with fire and get burned. This is also a warning to everyone: if you gamble, do it within your means.

Bitcoin is not a monster. It cannot even be considered an invention. It is just an expression of a decentralized thought codenamed Satoshi Nakamoto, a currency exploration.

3. Don’t start mining before you learn more

Hayek described the current scenario of digital currency in "The Denationalization of Money": multiple currencies should be allowed to compete with each other, and different coin minters will compete to make their currencies have the best attributes. Their incentive is to obtain minting income.

As an equivalent or a commodity, Bitcoin mining consumes a lot of electricity resources, and the investment in hardware, software engineers, manpower and material resources is huge. In order to maintain the stability of the underlying blockchain technology, miners do a lot of block packaging work.

Want to know about Bitcoin mining? See the Bitcoin mining report: http://www.afr.com/technology/lisa-kangding-story-20160706-gpzx7e)

Yes, in the past few years of mining development, the high profits and returns brought by Bitcoin mining are the nature of businessmen to pursue profits. But what about the beginning? Many founders often say that when starting a business, don't lose your original intention.

Today I am going to tell you about my original intention. Wang Ruixi and I came out to work on computing power. We want to decentralize computing power. Now that Bitcoin mining has developed to this point, many people think that it is controlled by a few large miners. We are now dispersing the computing power of the mines and distributing it to Bitcoin enthusiasts all over the world. This is the original intention of our entrepreneurship.

From a financial perspective, computing power is the future of Bitcoin, a futures form of Bitcoin. If you think that Bitcoin will appreciate in value in a year, then if you buy a mining machine with computing power and continue mining, you will mine Bitcoin at a price lower than the cost market price. But if you are bearish on Bitcoin, just laugh it off.

Bitcoin has just entered its seventh year. You will find that after two rounds of major reshuffles, those who truly stay in the cryptocurrency circle to start a business are those who truly love Bitcoin. Even if the industry is in a recession, withering, and there is no hope, they have always been there and will not abandon or give up.

So he deserves the wealth in his hands. In the digital age, in the era of Internet celebrities, self-media and Bitcoin, you have no vision, no freedom, refuse to learn, refuse to innovate, refuse to block chain, refuse to be beautiful, have no thoughts and no opinions, but always fantasize about how to get rich overnight? Do you still fantasize that you are Li Xiaolai, writing and working at your desk in the middle of the night, and collecting Bitcoins while lying down? Do you still fantasize that you are the classmate who received a scholarship of 6,000 yuan and was lucky enough to hear Chang Qian's advice? Do you still fantasize that you are like QQagent, who translated Satoshi Nakamoto's paper, slurped instant noodles, saved wages and hoarded Bitcoin, and then founded Bitmain, the CEO of Ant Financial, who staged a mining machine storm? Kids, wake up. There is never a lack of toxic chicken soup in this world.

4. If you encounter difficulties in your studies, look for Babbitt http://8btc.com. This is the literal meaning of this sentence.

5. I am a quick learner. I am also learning about Bitcoin, blockchain and related economic and financial techniques. I also have blind spots, so please view my remarks dialectically.

6. Bitcoin has developed without any rules to follow. The development teams and strengths of the altcoins are complicated. In a nutshell, the water is extremely deep. Those who are eager to try please pay attention to risk control. In the currency circle over the years, I have indeed seen many people who do pyramid schemes in the name of virtual currency, but before it runs away, you have no way to blame it. You can only kindly remind people around you, but our voice is too weak and people have little influence. Now I still tell many young people that before you understand Bitcoin, you should not buy it. There are many other digital currencies as well. In the industry, we call them altcoins. Now, in order to make it sound better, we have also witnessed that many innovations and improvements have been made in the technology of Bitcoin. We call them competing coins. Here is an extreme risk warning: MMM (3M), Internet Gold, OneCoin and other famous pyramid schemes have been discovered by the police. The answerer has participated in the investigation of these cases when he was in Babbitt. Don't know how to identify virtual currency pyramid schemes?

Here is the answer: http://8btc.com/topic-pianju.html What are the digital currency pyramid schemes on the market?

See here: http://8btc.com/forum-112-1.html Babbitt is a media with conscience and justice in the cryptocurrency circle. Everyone should protect it.

Here, the answerer wants to clarify his attitude. Some friends learned about the existence of the dark web from Twitter and Facebook. It is true that some black industries use Bitcoin. In recent years, there have been frequent cases of cyber extortion, and the extortionists demand payment of Bitcoin. We can't ban drones just because they can deliver bombs to prevent risks, right? Hehe.

<4> Greetings to Da Vinci

The Bitcoin community is mysterious and unpredictable. What is interesting is that when the Bitcoin community first started, everyone hid their real names and only used code names, such as FriedCat and ChangQian.

Da Vinci is a former colleague of Babbitt and a follower of Satoshi Nakamoto. This young man born in 1989 has gone to another world. He is a good friend of mine and I miss him very much. May he always be in the light.

<5>Written at the end

Don’t understand Bitcoin? It doesn’t matter. Bitcoin is a currency that does not require trust. The underlying technology is blockchain. The core of blockchain technology is self-certification.

There is an explanation of blockchain technology in my other answer: https://www.zhihu.com/question/37290469/answer/84635662

One day in 2016, I was in Beijing and suddenly fell in love with running. I didn’t need headphones or music, I just ran quietly, which was very similar to me at a certain period. I don’t know what the next eight years will be like, but if I have the chance, I want to keep running on this track. Thank you everyone, my speech is over today. Here is a sincere Easter egg.

http://weixin.qq.com/r/ATpTSxTEgkn9rVAo928T (QR code automatic recognition)

Well, I’ve been too busy with my business recently and don’t visit Zhihu often.
If you have any questions, please scan the QR code and leave me a message directly, and I will reply to you one by one.
Salaries are paid in Bitcoin. Well, the company is located in Shenzhen and lacks operations.