How to deal with news in the cryptocurrency circle

Chapter 0 Introduction

Recently, Li Guopan, a big data application developer in the cryptocurrency circle, launched a crowdfunding project called "Bifu.com", which coined the term "情绪指数". We are all used to the widely influential words such as Google Index and US Dollar Index. When I heard "sentiment index", I also used Google Index to make an analogy. The principle of the "sentiment index" I understand is that it measures the activity of the Bitcoin community at a certain point in time by collecting the number of posts and speeches on Weibo, QQ groups, forums, etc. through keywords related to Bitcoin. And Bifu.com uses this activity to judge the rise and fall of the currency. I guess this is an indicator for short-term copying.

If we think about it more deeply, the "sentiment index" is the community's reaction to a piece of news, and then we can judge the impact on the price trend of the currency.

Bifu.com raised 300,000 RMB in three days, which shows its strength in today's cold cryptocurrency market. We can also guess the expectations of cryptocurrency traders for the "sentiment index".

As Bitcoin has come to this day, some people have made money and some have lost money. I started paying attention to the price of Bitcoin in late 2013. For a long time, the price of Bitcoin was indeed related to "news", and a large number of people used news to manipulate the market. In the first half of 2014, news and fake news were used to judge or influence the price of the currency in an attempt to make a profit.

This article will express my views on the main news in the cryptocurrency world.

statement:

This article is not about the “Sentiment Index” and Bifu.com. It is totally irrelevant, but it made me think and formed this article.

Chapter 1 Government Attitude

The government attitude here refers to the information on Bitcoin released by relevant legal government agencies through open, formal and legal channels. It does not include the remarks made by individual civil servants or their friends and relatives.

The government's attitude has a great impact on the development of Bitcoin, and also has a huge impact on the price of Bitcoin. Anyone who has seen the impact of the "Notice on Preventing Bitcoin Risks" jointly issued by five Chinese ministries and commissions at the end of 2013 on the price of Bitcoin will not deny this point of view. Therefore, it is also the most concerned by the community. CoinDesk has a special page to collect the government's public remarks on Bitcoin. Bitcoiners should keep an eye on the government's attitude.

Based on a correct understanding of Bitcoin's monetary attributes, namely decentralized issuance, limited total volume, anonymity, and transnationality, it is perfectly normal for the government, as the monetary authority and the institution that benefits the most from issuing legal tender, not to recognize Bitcoin's monetary attributes. Therefore, it is not surprising that any government that is still issuing sovereign currencies in the world today denies Bitcoin's monetary attributes. Any slightly rational Bitcoin practitioner or Bitcoin holder who pays attention to Bitcoin should anticipate this attitude of the government and remain relieved.

As one of the most powerful governments in the world, it is rare for the US authorities, especially some states, to publicly recognize Bitcoin as a legal currency unit. However, Bitcoiners cannot expect all governments in the world to have this attitude, and even the US government will go back on its word. For example, the day before yesterday, a US government agency claimed that Bitcoin is a commodity, which essentially denied the monetary attributes of Bitcoin.

Because the government naturally tends to exclude all currencies except those issued by itself, the government will most likely not recognize the accounting and payment attributes of Bitcoin. Therefore, the government will tend to order its financial institutions not to use the currency function of Bitcoin. For example, the "Notice" jointly issued by five ministries and commissions clearly prohibits domestic banks from providing corporate financial services to Bitcoin-related companies. This is also something that Bitcoiners should know well and keep smiling.

The anonymity of Bitcoin will definitely lead to illegal activities such as money laundering, fraud, and the buying and selling of contraband. As a government, especially a government with strict foreign exchange controls, it will definitely crack down on this type of application of Bitcoin. All governments on earth are no exception. This is a policy that Bitcoiners must support. Bitcoiners must support the government's statement that the government will manage and punish illegal Bitcoin used for crimes. Even if the government does not express its position, we must exercise self-discipline.

There is another type of speech that almost all governments will make publicly: "Prevent risks, educate investors, guide public opinion, blablabla." Bitcoiners can just ignore it. This is the empty talk and bullshit that the government often uses.

Finally, if the government wants to interfere with the free exchange of Bitcoin for legitimate purposes, such as the Russian government did last year, Bitcoiners, just keep laughing. They really can't do anything about it. No matter how violent the organization is, it can't completely ban a data structure on the Internet.

Finally, the mainstream governments in the world currently maintain a positive attitude towards the innovation of Bitcoin. However, a large number of governments have not expressed their views. Given that the current price of Bitcoin is greatly affected by government statements, and government statements, especially those of non-elected governments, are completely unpredictable, it is best for buyers to prioritize the pressure of bearing losses rather than evaluating their ability to make profits by using government statements to speculate on Bitcoin.

Chapter 2 Big Company News

Money is the smartest species in the world, it always flows towards the direction of highest profit, and large companies are often important manipulators.

There are two types of clear attitudes of large companies towards Bitcoin: one is to support Bitcoin payments in business, and the other is to be involved in Bitcoin development in technology. Few companies will publicly deny Bitcoin, as they are not the government.

At present, supporting Bitcoin payments has become an industry trend for technology companies. However, the popularity and awareness of Bitcoin among the general public is still at a relatively early stage.

The most important reason why companies choose to support Bitcoin payment is the advertising effect. Secondly, I guess it is a tentative move. There should not be many large companies that really expect Bitcoin to increase their business and make profits. Therefore, even if so many large companies support Bitcoin payment, it does not mean that Bitcoin has been accepted by mainstream companies and the public. However, this is a very good start.

Big companies accepting Bitcoin as payment is also a very good advertisement for Bitcoin itself. As Bitcoiners, we should be very happy about such news. But what about the price?

In the past two years, large companies have been paying for Bitcoin payments, including Microsoft, PayPal, Dell, etc. However, it is almost impossible to judge whether there is a causal relationship between these effects on prices. But I personally think that adding an additional Bitcoin payment in a mature market for legal currency payment will not have a substantial positive effect on the price of Bitcoin. Any large company must pay attention to the formality and legality of legal currency, and users often have a high degree of trust in their payment systems. Just like I will bind a credit card to Microsoft. In addition, large companies themselves do not hold Bitcoin, and they all exchange it in real time through companies like Bitpay. Therefore, Bitcoiners who pay special attention to prices should temporarily maintain a wait-and-see attitude towards large companies supporting Bitcoin payments. In the absence of dealers, I personally think that the benefits are not great.

But if a multinational business supports Bitcoin payments, it will be a big price benefit. Payment channels in different legal currency systems are more troublesome, and Bitcoin is a shortcut that users are more likely to accept.

Large companies are directly directing teams to develop Bitcoin technology, which means that companies are spending real money on development. This shows that the company has recognized Bitcoin technology, or blockchain technology. Representative companies that have taken this action include IBM and Samsung. Many well-known banks and the Big Four accounting firms have also spent money to study the prospects of this technology. They have given Bitcoin more possibilities. This is a substantial benefit to the popularization of Bitcoin among the public and the expansion of technology. Bitcoiners should be very happy to hear this. But what about the price?

It is impossible for large companies to buy a large amount of Bitcoin when they get in touch with Bitcoin technology, as they are not investment institutions. So don’t expect funds from large companies to enter. But how about investment institutions entering? Who knows? Bitcoin is a currency whose price is extremely easy to manipulate. I don’t know whether it is a blessing or a curse for large investment institutions to enter. Emotionally speaking, I hope they will enter.

In summary, large companies accepting Bitcoin payments and exploring the possibilities of Bitcoin will not have much impact on the payment industry and the Bitcoin industry in the short term. Unless there is a dealer making a move, the price will not have an immediate effect.

Chapter 3 Celebrity Quotes

Celebrities' comments on Bitcoin are nothing more than support or denial. For example, Buffett publicly said that he "doesn't understand" it, while Bill Gates expressed support.

Because of their large number of fans, celebrities’ comments are very influential. And too many people like to follow the authority. If Jack Ma said, “I invested in Bitcoin,” Bitcoin would immediately rise. Another example is Luo Zhenyu’s saying, “Young people should not play with Bitcoin.” I also think this deterred a certain number of potential investors.

Celebrities often have accumulated a lot of wealth, and given the huge investment risks of Bitcoin, it is difficult for them to be interested in investing in it. Therefore, Bitcoiners who pay special attention to prices, personally think that they should not expect celebrity funds to enter.

But for the development of Bitcoin technology, I believe that celebrity comments have limited impact. Those who are obsessed with technology development rarely believe in authority. Superstitious belief in authority is a taboo in life. Celebrity comments are unlikely to drive or prevent technology enthusiasts from entering the Bitcoin community.

Overall, I think that celebrities’ values ​​are in line with Bitcoin, which is a big benefit to Bitcoin, both in terms of promotion and price.

The corresponding negative remarks from celebrities have a certain inhibitory effect on prices.

Chapter 4 Inside Information

The so-called insider information refers to undisclosed information that has a significant impact on Bitcoin technology, applications and prices at important social nodes involving governments, large companies, celebrity authorities, etc.

Insider information and insider trading have always been a lingering shadow in the minds of investors. For a long time, many investors tend to believe that the market prices are manipulated by insiders, conspirators, and dealers, so they also believe that obtaining insider information is the only way to successful investment. People who are new to the currency market are always willing to look for insider information everywhere, hoping that a kind person will give them a chance to make a fortune.

What I remember most clearly is Li Xiaoxiao from Caijing.com in 2014, and the communicators around her, who almost influenced the price trend of Bitcoin in early 2014.

My attitude towards insider information is very clear: stay away from insider information.

We Chinese have too many genes for insider information. We have been taught since childhood: "'The sun is the reddest.' When you come to this world, you must obey a certain person, a certain group, or a certain organization. He gives you internal information and issues you the latest and highest instructions. You must obey him carefully. He is your most reliable person, the source of information, the source of hope, and the source of confidence." We have been taught to be a collectivist since childhood.

After many years of struggle, I formed another worldview: "In the world, I am a reliable person. I can consult other people's opinions on everything, but in the end I have to listen to myself. Believe in myself and rely on myself."

This value also directly determines my advocacy of staying away from insider information.

First of all, insider information itself is very uncertain and often contains a lot of falsehoods, or is simply a rumor. Investing based on rumored information will lead to failure. Insider information is difficult to obtain. Where in the world can there be so many inside information? If it is hard-earned inside information, who the hell is crazy to tell you? I can make money on my own. Deliberately spread insider information is often bait.

Secondly, even if insider information is true, it is often illegal. Just like leaking state secrets in advance is illegal. Bitcoiners, as a social citizen, it is wiser not to test the law.

Third, investing or learning about Bitcoin based on insider information will lead to a drug-like dependence. It will breed laziness, laziness for analysis, and aversion to research, which will inevitably lead to you losing yourself, giving up self-judgment, giving up self-research, and eventually turning you into a person who depends on others. This is a person without self-confidence. And even more so, a person without a future.

I believe that insisting on independent thinking, staying away from insider information, and staying away from opportunism and collectivism are qualities that a Bitcoiner must possess.

Chapter 5 Conclusion

I have always believed that it is difficult to distinguish the truth from the false in the face of a huge amount of information, and it must be used with caution to guide investment. In addition, compared with how many coins you have now, building your own value can more decisively affect your future life.