Bitcoin has been silent for two years and has a weak recovery. The commercialization of virtual currency is still in a difficult situation.

After two years of slump, the price of Bitcoin began to show a steady upward trend at the end of February this year, with an increase of nearly 16%, approaching the highest point in a year. However, such a "recovery" cannot make investors holding Bitcoin excited. Most people have even begun to forget the crazy experience brought by Bitcoin two years ago.

In contrast to the silence of Bitcoin, some "Bitcoin-like" products have continued to emerge in the past two years, even causing a lot of policy and legal risks. At the same time, the blockchain technology behind Bitcoin is fermenting and heating up in the hearts of global financial industry practitioners. At the end of last year, Wall Street giant Goldman Sachs said in its latest report that Bitcoin's underlying technology - blockchain technology is ready to "disrupt everything."

Bitcoin recent trends

Blockchain technology sparks heated discussion in global finance

November 2013 was an unusual week for investors who had traded Bitcoin or even held Bitcoin until now. Within a week, Bitcoin's Baidu Index rose 10 times compared to the previous week. Correspondingly, Bitcoin's price increased by more than 50 times, driving up the prices of other virtual currencies such as Litecoin.

Sun Yang is one of many Bitcoin investors, but because he entered the market too late, he did not join the team of Bitcoin speculators. Instead, he and a few friends assembled a mining machine with several graphics cards shipped from Jiangxi by relatives, trying to make money by selling mining machines while mining coins. But soon, Bitcoin fell from the altar, and e-commerce companies removed mining machines from their shelves. After Sun Yang and others sold the parts at a low price, they never logged into the platform where they traded Bitcoin before.

Sun Yang once again paid attention to Bitcoin due to the discussion of blockchain technology last year. As the underlying technology of Bitcoin, blockchain technology attracted widespread attention after the prosperity of Bitcoin faded.

Huobi CEO Li Lin said: "Two years ago, we were not discussing blockchain but Bitcoin, but with the development in the past two years, we found that Bitcoin technology has the potential to affect our lives and finance in the future on a larger scale."

According to foreign media reports, the core of blockchain technology is a shared database built on a consensus model, without unnecessary intermediate links, so it is very efficient. If you want to add a new database to the shared database, you must obtain the approval of a certain number of nodes running blockchain software, that is, reach a consensus. Once the consensus is reached, the new database is upgraded to a transaction "block" that can be seen by other computers in the system. This new database is "linked" to the existing blocks in the system through a password, so it is called "blockchain".

Last September, nine of the world's largest banks, including Barclays, Citigroup, Santander and UBS , expressed interest in blockchain technology and said they would work together to develop industry standards and protocols for the use of blockchain technology in the banking industry.

Since then, discussions about blockchain have been endless. JPMorgan Chase has internally made it clear that blockchain, big data and robots are its focus in 2016, and has started one blockchain-related project after another.

Daniel Pinto, head of JPMorgan Chase's investment bank, believes that the emergence of blockchain can not only make lending operations more convenient, but also reduce the occurrence of transaction errors. In the future, the application of blockchain will not only involve loans, but also cover all aspects of delivery. More importantly, the application of blockchain can solve the liquidity mismatch problem of JPMorgan Chase's loan funds.

Industry insiders unanimously agree that "so far, Bitcoin is the most mature application of blockchain technology." In their view, the recent rebound in Bitcoin prices is also related to the popularity of blockchain.

Bitcoin is difficult to commercialize

In addition to pushing blockchain into the public eye, in the two years when Bitcoin was silent, similar Bitcoins have also continued to emerge. According to incomplete statistics, there are more than 20 virtual currencies that appeared after Bitcoin, including Litecoin, Penguin Coin, Shark Coin, Monkey Coin, Penguin Coin, etc. In the mouths of some Bitcoin players, these virtual currencies are collectively referred to as "altcoins."

Some "altcoins"

Jiang Yang expressed frustration at the outside world's views. He said: "There are currently no relevant laws and regulations to regulate this industry, so some people are just taking advantage of the situation, and some are simply profiteering with a shady heart. We are also questioned if we want to follow the rules."

In fact, since there are no relevant laws and regulations on virtual currency, there have been many cases of illegal fundraising under the banner of virtual currency in the past two years. In November 2015, the Economic Investigation Bureau of the Guangdong Provincial Public Security Department organized the economic investigation departments of the public security organs in Shenzhen, Zhaoqing and other places to carry out operations, successfully cracking a series of illegal fundraising cases of online virtual currencies such as "Aibi" and "Kbi", arresting 98 people involved in the case on the spot, and the main criminal suspects were brought to justice. Two illegal fundraising criminal gangs were destroyed, involving more than 1 billion yuan, and the victims involved more than 5,000 people in 28 provinces.

According to the Shenzhen police's reply to the Ta Kung Pao reporter, Shenzhen is adjacent to Hong Kong and Macao, with developed information and a lot of idle funds among the people. In addition, the government encourages financial innovation, which has led to some illegal fund-raising activities being carried out under the guise of financial innovation, through online financial activities such as online lending and virtual currency trading, and many of them are Hong Kong residents living in Shenzhen. In Sun Yang's recollection, in the past two years, news about Bitcoin has almost always been about illegal fund-raising using virtual currency. In his opinion, the commercialization of virtual currency is still on the way.