Bitcoin won’t die easily

According to the market data of Huobi.com (www.huobi.com), the largest Bitcoin trading platform in China, the price of Bitcoin dropped sharply from 2830 to 2350 due to Mike Hearn's short-selling remarks during the weekend, and then rebounded by more than 200 yuan, reaching a high of 2595.21 yuan. The weekly transaction volume was 10.11 million, with a turnover of 27.9 billion. The weekly transaction volume of Litecoin was 100 million, with a turnover of 2.2 billion yuan.

Bitcoin's decline last week was mainly affected by two negative comments. The RAND Corporation issued a report suggesting that the US government destroy Bitcoin and similar technologies. The report said that Bitcoin and blockchain technology can indeed achieve decentralized, anonymous, and flexible services for global users, but this is not a good thing, as there is uncertainty about the national security interests of the United States. Mike Hearn, one of the Bitcoin developers, recently made a statement claiming that Bitcoin as a virtual currency is doomed and sold all the Bitcoin he held. It is reported that Mike Hearn, the developer ranked 69th, is not among the core developers and currently provides services for the blockchain alliance composed of 42 major banks. The main disagreement between Mike and the Bitcoin community is whether to open another highway or widen the existing Bitcoin network highway.

Due to the technical limitations of the current 2M Bitcoin network, the Bitcoin network is overloaded and cannot meet the demand. Mike Hearn and Bitcoin Chief Scientist Gavin Andresen have launched a network equivalent to another Bitcoin, "Bitcoin XT", which increases the maximum capacity of data blocks to 8MB, but it has not been widely recognized. On June 11, 2015, Mo Buyi, the head of Huobi.com's mining project DigCoin, and other heads of five Chinese mining pools jointly held a "Mining Pool Technology Seminar" at the National Convention Center. They all agreed that the size of Bitcoin blocks needs to be expanded. It is planned to accept blocks of no more than 8M (8,000,000Bytes) in the future under the premise of ensuring the unification of the Bitcoin network, and gradually increase to 16-32M according to demand. This flexible solution is currently the mainstream expansion solution.

Mo Yiyi believes: First of all, Bitcoin will not die easily, and it is no longer a simple "experiment". At present, there are some differences and disputes among the core developers of Bitcoin in the entire community regarding the Bitcoin block expansion plan. In our opinion, each expansion plan has certain advantages and rationality, and is an optimization and upgrade of the current state of the blockchain. As a Bitcoin trading platform, Huobi.com mainly plays the role of a user of blockchain technology. Compared with the identity of each developer and the interests behind them, Huobi pays more attention to the technology itself.

We do not want to see the Bitcoin community split, and we hope that the community will remain united while discussing improvement plans. Because we are all fans and supporters of Bitcoin technology, and we all hope that technology can bring positive applications. If Bitcoin splits into different versions due to the block expansion dispute, forcing users to choose only one solution, it will be disadvantageous to all Bitcoin users. I believe this is something no one wants to see.

The traditional financial market fell sharply last week. Last Friday, US retail sales showed poor data, and the New York Fed manufacturing index was far below expectations. Many markets, including A-shares, European stocks, and US stocks, have entered a technical bear market, with US stocks hitting a 5-month low. Gold fluctuated widely last week and closed at 1088.82, down 1.37% for the week; oil prices fell sharply at the beginning of Monday trading, with Brent crude falling more than 4% and falling below $28 per barrel. Unlike A-shares, the Bitcoin market can execute two-way transactions at low cost and hedge short-term risks at any time.