Is Bitcoin an investment option? Or a speculative option?

Many people have heard of Bitcoin. The general view is that it is a scam and a Ponzi scheme. Some people even say that it is a scam and has no guarantees and is just hype. Some even say that Bitcoin is a modern version of the Dutch tulip bubble.

The biggest taboo in investing is cognitive bias, that is, letting preconceived ideas or thoughts cloud your normal judgment.

Bitcoin is just a piece of open source code. All the codes can be found online. Anyone who knows programming can carefully study its code and specific algorithms. In other words, you can think of it as an Android program in the financial field. It is just a piece of code. It is not a money laundering tool, nor a means of settlement for hiring murder. It is just a neutral technology. For real money laundering and other crimes, most of the settlement methods are still legal currency.

Open source, decentralization, and continuous evolution are the main features of blockchain (the network on which Bitcoin runs).

On the one hand, the open source nature determines that the Bitcoin code is subject to inspection and even attack from IT experts around the world, including network security experts, hackers and other top network experts. This process has never stopped since the birth of the Bitcoin program in 2008. In the history of Bitcoin, there have been some loopholes, but under the guarantee of the voting rights of the core developers of the Bitcoin community and all miners, the Bitcoin network has thrived and withstood forks, 51% attacks, etc. To date, the computing power of the Bitcoin network has reached 476P. In simple terms, even if supercomputers from various countries are taken out, they cannot gain an advantage to tamper with or break the blockchain network. This is thanks to the large and small miners distributed around the world. In order to obtain rewards, miners run Bitcoin nodes to maintain the normal operation of the Bitcoin network and ensure the free circulation of Bitcoin around the world.
On the other hand, it determines that this network has artificial intelligence. In other words, the code can be continuously updated.

This is what I mean by blockchain can continue to evolve. We accept Darwin's theory of evolution effortlessly and even take it for granted. So, I think that the currency we use is also evolving like animals and plants in nature. Animals and plants evolve to adapt to nature and reproduce, while the continuous evolution of currency is to adapt to the development of productivity, promote commodity circulation, and reduce friction and loss in the process of capital flow. The history of mankind is also the history of the continuous evolution of currency. When bartering could not meet human needs, shells, the most primitive and simplest currency, appeared on the stage of history. Since then, various currencies have appeared over time around the world. We Chinese people are familiar with copper coins, silver notes, gold and silver ingots, Yuan Datou, and even grain coupons and meat coupons can be used as currency. Of course, the most widely accepted currency by the people of the world is gold. As the saying goes, currency is naturally gold, and the properties of gold determine its dominant position in the field of currency. After the world has experienced a long period of gold standard system, with the collapse of the Bretton Woods monetary system, the link between currency and gold also collapsed.

Since then, the world has entered a dollar-centered monetary system, which relies on the strong national strength of the United States to maintain its operation. The United States is deeply trapped in various wars and repeated economic crises. In order to relieve its own pressure, it can only protect its own interests by manipulating the printing press. Other countries have followed suit, and inflation has become a common word for each of us. However, if we think about it carefully, is inflation really a normal behavior? Who should have the right to print money? The currency we use is backed by the credit of the country. But the fact is that the so-called country is just a paradise for a few people and politicians. These people control the central bank, the Federal Reserve and other currency issuing institutions, and rely on currency issuance to squeeze the value of many people's hard work.

Therefore, the conclusion is obvious. The evolution of currency has not and will never end. It will always move in a direction that is more conducive to people's lives and social development. Therefore, the current paper money is definitely not the best, nor the final currency form.

First of all, paper money cannot be carried in large quantities, and countries have strict regulations on carrying cash. Many people will say, you are stupid, you can transfer money. But the fact is that cross-border transfers have strict limits on the amount, and you need to queue up at the bank, fill out complex forms, and be affected by business hours and holidays. It is impossible to achieve the free flow of funds around the world 24 hours a day. Many students studying abroad may have a deeper understanding. In this regard, Bitcoin is superior to the existing transfer system. It is almost real-time (with network confirmation time), it does not require identification (no ID card and real-name authentication), and there is no difference between using it to transfer a few thousand yuan and hundreds of millions. This is the reason why the recent kidnapping of Taiwanese tycoons and the increasing number of hackers using Bitcoin for extortion are so important. Of course, Bitcoin is not untraceable. On the contrary, the uniqueness of Bitcoin addresses is very easy to track in many cases.

Since the currency is constantly evolving, Bitcoin is probably not a perfect form of currency. After all, the total amount of Bitcoin is fixed, only 21 million, and the issuance method has long been fixed by an algorithm. Although individuals cannot modify the total amount of currency and currency issuance, it still cannot be called an ideal form of currency. However, don't forget that blockchain is an open source program, that is, we can update or improve the functions of the blockchain by deleting or updating the code. Since the beginning of this year, the expansion of the Bitcoin blockchain is the best example of the evolvability of the Bitcoin network.

We have experienced primitive society, slave society, feudal society, and then through revolution, we have established the highly developed and vibrant world we are today. The changes brought about by the Industrial Revolution have enabled mankind to achieve a huge leap forward, and now the Internet is changing our world at an unprecedented speed and scale. FACEBOOK has created a network country with a population of over 500 million. Companies like Google are in contact with each of our lives every day, making our lives better. UBER makes travel more convenient for each of us. We can study online courses from famous universities around the world on the Internet, we buy goods from all over the world online, and we connect with people from all corners of the world online. So, what about our currency? Do we need a new type of borderless, frictionless or low-cost currency to match such an Internet era?

I think we need it. Even if it is not Bitcoin, it will be other similar digital cash. It makes each of us have a clearer concept of private currency, that is, others cannot start the printing press to take your wealth away from you.

The speculative value of Bitcoin

Many people think that I don’t want to read these chicken soups, and don’t try to deceive me with these pyramid schemes. So, from the perspective of a professional trader, I will talk about the speculative value of Bitcoin:

1. No price fluctuation limit

2. 24-hour trading

3. Fewer interference factors (compared with stock futures)

4. Many trading websites offer margin trading (leverage is available)

Therefore, there will be no gaps on the K-line. It is an ideal product for technical analysts. There is no gap in the market due to good or bad news.

From these perspectives, Bitcoin is also an ideal choice for technical chart analysis traders.

Author: Orange Reward Address: 1FCiRAuQYUqMzyy7XHueLs5SCRzd11P6kj
Editor: printemps
Source (translation): Babbitt Information