Let’s talk about Bitcoin from the “Hong Kong businessman kidnapping case”

Not long ago, a kidnapping and ransom case in Hong Kong made the headlines, not because of the huge amount of money, not because the kidnapper was a celebrity, and not because the kidnapper was a century-old gangster like Zhang Ziqiang, but because the kidnapper demanded Bitcoin to pay the ransom, which stunned the police who were waiting by the phone. Bitcoin is a relatively new thing in China and the world. In the eyes of the general public, Bitcoin only exists in the world of hackers.

Bitcoin is known in China mainly because CCTV once broadcast a news about Bitcoin. This time, it came into the public eye because of a kidnapping case. Some people attacked it, while others praised it. As the saying goes: Don't harm others with your own mistakes, and don't harm yourself with others. How to correctly view Bitcoin and what things about Bitcoin need to be cleared away to see the blue sky, today I will tell you one by one.

Some people say that Bitcoin, because of its anonymity, has become a criminal tool for purchasing drugs, laundering money, and financing terrorism.

Since the beginning of Bitcoin, newspapers and other commentary have been linking Bitcoin to criminal activities, from money laundering to drug dealing and even terrorism. Criminals are more interested in new technologies than ordinary people, so it is not surprising that they use Bitcoin as a tool for crime. This has always been the case. Take the Internet. In the early 1990s, the Internet was considered a hotbed of pornography, piracy (especially music), and fraud. Many parents refused to install Internet in their homes for fear that their children would be influenced by it. The Internet was a derogatory term at the time. This was not long ago. It was not until the potential of the Internet was fully understood and the public accepted it that the Internet was no longer seen as the source of evil and people began to regard it as a truly revolutionary technology. Now, there is no place in the United States, no home that is not connected to the Internet. Now, students in school use this technology every day that was once seen as a tool for crime. Bitcoin is often criticized because it can be used to anonymously purchase goods and services. The anonymity of Bitcoin makes it somewhat mysterious and evil, making it a tool that harms society. However, every minute of every day, Americans use anonymous currency to purchase goods and services, and this has been the case since the founding of the United States. This anonymous currency is called the dollar. Bitcoin is nothing more than bringing anonymous currency into the digital age. It is true that Bitcoin can be used to buy drugs and other illegal goods and services. But the same can be done with $100. So can any paper currency. The anonymity of paper currency is acceptable, so why is Bitcoin a problem? There is no difference in anonymity between the two. If there is a difference, it is that one is paper and the other is digital. In fact, despite its anonymity, the use of Bitcoin is easier to track than paper currency. The use of paper currency is traceable. There were early attempts to track the use of paper currency based on serial numbers, but it was proven to be unfeasible after a few years. Paper currency can only be tracked by physical inspection and is easy to counterfeit. Bitcoin is different. At its core, Bitcoin is nothing more than a huge ledger system. This system records every transaction in the network, and transactions are completed in accounts (wallets). The owner of the wallet is anonymous, and the ledger is public. All institutions and individuals, including law enforcement agencies and tax authorities, can access the ledger. The history of all transactions that have occurred in the Bitcoin network can be queried in the ledger. Therefore, unlike paper money, which disappears and reappears, and where there is no trace of a transaction or transfer, every Bitcoin transaction is traceable and cannot be hidden, altered or changed. The use of paper money allows transactions to be completed without a record, and the parties to the transaction cannot be traced. The owner of a Bitcoin account is not revealed, but the transaction is recorded in a public ledger. In addition, Bitcoin can be tracked when it is converted into legal tender. To convert Bitcoin into legal tender, one must contact an exchange or similar service. These exchanges will be regulated, allowing law enforcement to track criminal behavior. Paper money can be circulated indefinitely without being converted into other forms. Therefore, crimes committed using Bitcoin are easier to track by law enforcement than those committed using paper money. For criminals, they prefer the true anonymity of paper money to Bitcoin, where every transaction is recorded and permanently stored on the network.

Some people say that Bitcoin cannot solve real-world problems. This view has been proven wrong. Bitcoin solves a large number of real-world problems. Many of these problems are not obvious to many people in first-world countries such as the United States and the United Kingdom.

Take the lack of banking services. In the United States alone, more than 20% of the population lacks banking services. The rest of the world has even larger numbers of people who lack banking services. “Unbanked” means not having a checking or savings account at a traditional retail commercial bank or similar institution. People who lack banking services need alternative financial services, including payday loans, prepaid cards, subprime auto loans, and check cashing stores. The alternative financial industry, which serves the underbanked, has an annual revenue of $89 billion. Considering that many of these alternative financial services are outside of traditional financial regulation, this amount is very impressive. Bitcoin Solutions Opening a Bitcoin account (wallet) is as easy as registering an email address. If you have a wallet, you can send and receive Bitcoin instantly and for free. There are no banking hours, no application to the bank, no need to rush to the site to complete the transaction, and no need to deal with the bank, which many people think is too complicated.

Take remittances, for example. More than $500 billion is paid across borders every year through international remittances. For example, an Ecuadorian immigrant works in Canada and has family in Ecuador who rely on his income. Every week he sends part of his salary home through companies such as Western Union. Western Union and other similar companies usually charge a 10%-20% wire fee, not including exchange fees. National Geographic said: What Western Union charges and spends billions of dollars on, Bitcoin can do for free. Bitcoin's solution Bitcoin allows these transactions to be completed instantly over the Internet, and Bitcoin is borderless. Transferring Bitcoin is as simple and cheap as sending an email. In addition, there are no middlemen or remitters to charge 10% or more.

For example, addressing unstable government currencies, Cyprus: The stability of a government-backed currency is influenced by the government and economy of the country in which it is based. Recent events have shown how fragile a national currency can be. Zimbabwe: In one month in 2009, the amount of government-backed currency in Zimbabwe increased by 70 million times. In Zimbabwe, it is very common for workers to demand to be paid in the morning, knowing that if they get paid after work, the currency may have depreciated significantly since the morning. After years of inflation, the government abandoned its own currency and adopted the US dollar as the official currency. Argentina: In 2002, Argentina's economy was in trouble. In order to relieve the pressure, the Argentine government converted all bank account holders' US dollar deposits into worthless Argentine pesos. Argentines were forced to hold a currency that depreciated significantly every other day. While the situation has improved, the Argentine peso is still depreciating rapidly. In 2014, the Argentine peso depreciated by nearly 40%. Venezuela: In 2014, Venezuelan students took to the streets to protest. In 2014 alone, the country's currency lost more than 60% of its value, and major international companies such as Delta and Brinks were forced to withdraw from Venezuela after suffering losses of hundreds of millions of dollars. Bitcoin Solutions Global Quote: Bitcoin value is calculated on a global basis. Therefore, economic problems in one country will not have much impact on the value of Bitcoin. Decentralization: As a decentralized technology, no government can manipulate Bitcoin. Inflation: There are only 21 million Bitcoins, and this number will not change. Therefore, unlike traditional government-backed currencies, Bitcoin will not experience inflation.

Bitcoin is an electronic currency. As an electronic currency, it is very common, but it is also very unique. There is no definitive answer to the question of who Satoshi Nakamoto, the creator of Bitcoin, is. As a relatively new thing, Bitcoin is still not accepted by most countries. However, after Germany recognized its legal status in 2013, the United States also officially recognized Bitcoin as a legal currency and supervised it in September this year. I think that others have already openly regarded it as a legal currency, while we, including the Hong Kong police, are still stunned. This cannot but make people feel a little sad.