Three core uses to help you understand why Bitcoin is worth thousands

　The price of bitcoin has risen sharply recently, so people have been looking for various reasons to analyze why it has risen. This article will not analyze why it has risen recently, because that is a matter of opinion and there is no standard answer. Instead, I will introduce what I think are the three core uses of Bitcoin to solve the problems that people often ask: what is the use of the currency and the source of its value.

1 Wealth storage

Whether a person is poor or rich is generally determined by the wealth he or she owns, and wealth requires something to carry the stored value. For example, the real estate under one's name, the company owned, etc., but more importantly, how much money one has. In ancient times, money was gold, and to say that a person was rich generally meant that he or she had a lot of gold. Now, the rich mostly have paper money and bank deposits, and some illegal income is not dared to be deposited in banks controlled by the state, so there are often cases of corrupt officials hiding large amounts of cash, commemorative coins or gold at home. For example, the recent "Shanxi female corrupt official who was caught living a luxurious life, hundreds of bundles of dragon banknotes were found in her home", "The case involved 230 million yuan, and more than ten carts of gold banknotes were seized. This corrupt official is quite awesome."

Be careful not to be misled by some people's promotion of the anonymity of the currency, thinking that Bitcoin can prevent house confiscation. Read the past news "The U.S. Marshals Service successfully auctioned the last batch of Bitcoins seized from Silk Road" In October 2013, the FBI arrested Ross William Ulbricht, the owner of Silk Road, and shut down his website. At the same time, they also seized the website's Bitcoin assets. Later, these coins were auctioned in three batches (30,000 in June 2014, 50,000 in December 2014, and 50,000 in March 2015). There were many bidders participating in the auction each time, and none of the three auctions failed or even won at a premium.

That is to say, Bitcoin is used for wealth savings, not to hide illegal wealth to prevent seizure, but to protect one's own wealth from being diluted by over-issuance.

Bitcoin has a fixed upper limit of 21 million BTC, which means that if you hold 21 BTC to save wealth, you will permanently have one millionth of the global bitcoin wealth, and this proportion will not decrease. Assuming that a country's legal currency is 100 trillion, and you have 100 million, it is one millionth of the country's wealth. But if the country issues 900 trillion, then your 100 million remains unchanged, but the proportion of wealth is reduced to one ten million. It is equivalent to wealth being reduced to 1/10 of the previous one. Don't say it is impossible, please refer to Zimbabwe. Using Bitcoin to store wealth has a fixed upper limit, and there will be no similar unfair phenomenon of over-issuance and dilution of wealth.

I think this is the most important application of Bitcoin, and it is also likely the purpose of Satoshi Nakamoto's invention of Bitcoin. Take a good look at the message in Satoshi Nakamoto's Genesis Block:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

——Satoshi Nakamoto

2 Global Circulation

The world is colorful, and almost every country has its own legal currency. Although the US dollar is relatively strong, not every country accepts US dollar payments. For example, if you go to a nearby vegetable market to buy vegetables, try paying in US dollars. Even Alipay and WeChat payments may not be accepted, let alone US dollars.

For those who do not travel abroad or shop overseas, global circulation may not be very useful. However, the world is rapidly integrating under the catalysis of the Internet. You may have to buy your latest electronic products and your child's milk powder from abroad. When your child grows up, he may go abroad to study. The world is so big that you may travel abroad to see it, and your relatives and friends may immigrate overseas. In the future, there will be more and more occasions that require cross-border payment circulation.

There are many problems and inconveniences in the cross-border circulation and exchange of current legal tender. I won’t go into detail, as everyone knows. Here are the advantages of Bitcoin:

1) Bitcoin is based on the Internet. You can own and use Bitcoin in any corner of the world where there is Internet. You only need a mobile Bitcoin wallet and a mobile wireless network. There are no national or regional restrictions. As long as the store is a Bitcoin enthusiast and is willing to accept Bitcoin, you can pay directly in Bitcoin.

2) With sufficient transaction fees (currently about 0.0001BTC, which is about a few cents), 1 confirmation can be completed in about ten minutes, and the transfer amount is unlimited. Bitcoin transactions have confirmation times, which increase every ten minutes or so after 1 confirmation. The more confirmation times, the more difficult it is to be double-spent and the safer it is. Generally, 1 confirmation is enough. For small payments, 0 confirmation completed in seconds is not very safe but acceptable. Note that transactions with insufficient fees will take a long time from 0 confirmation to 1 confirmation. On the other hand, international remittances may take several hours or even days, and the larger the transfer amount, the higher the fee.

3) It can be easily exchanged for legal tender of various countries. Major countries generally have professional Bitcoin trading platforms for exchanging their own currencies. Some places even have Bitcoin ATMs, which can easily exchange for local legal tender. Even if there is no exchange or currency ATM, you can easily find people who like Bitcoin to exchange through some OTC mobile apps. For example, if you travel to a certain country, you can find a Bitcoin enthusiast in this country through an app. You give him some Bitcoins, and he gives you some equivalent local legal tender. This completes an on-site exchange of Bitcoin and legal tender.

As you can see, the key to whether Bitcoin can be easily exchanged and circulated globally lies in whether there are enough merchants and shop owners who know and are willing to accept Bitcoin payments, as well as currency enthusiasts who are willing to exchange their fiat currency with you.

This is also one of the important reasons why we, Bitcoin fans, actively promote Bitcoin. The more people know and recognize Bitcoin, the more convenient it will be for global circulation, and the higher the value of the currency will be.

3 Intelligent Programming

Many newcomers often ask what is the difference between Bitcoin and the existing QQ coins and the legal currency in the payment package WeChat Pay. It is often difficult for newcomers to understand that Bitcoin has an upper limit and Bitcoin is decentralized. It is better to explain the most intuitive difference: Bitcoin is a programmable intelligent digital electronic currency.

Programmability is an important feature of Bitcoin, and based on its programmability, a variety of currency applications have been constructed. Although Bitcoin's script system is not a Turing-complete language system for security reasons, the rich interfaces it provides are very powerful and can be intelligently and automatically implemented in various application scenarios. For example: automatically send resources after obtaining payment coins, or automatically pay your coins after helping to check faucet information, use Bitcoin or Dogecoin to reward and support good articles or videos, automatically purchase virtual game coins in games, and even in the future, under the Internet of Things, the refrigerator will pay Bitcoin to buy a certain dish when it finds that it is not enough.

The core of coin smart programming comes from its blockchain technology , and the applications that can be formed by blockchain technology will be more extensive and exciting. Some smart contracts, some asset management, some automatic trading platforms, and even some investment decisions can be realized under blockchain technology. The electronic currency itself has a very close relationship with the blockchain. As for the specific relationship, it is difficult to explain it in one or two sentences. In short, they promote each other. Please follow the WeChat public account [Bite Sauce], and I will have the opportunity to elaborate on the relationship between the two in the future. There is also a vote on WeChat. What do you think is the reason why Bitcoin is valuable? Thank you for your attention.