Bitcoin's fate is determined by the market

After experiencing dramatic fluctuations, Bitcoin gradually cooled down in 2014.

Xu Mingxing believes that Bitcoin still has "promising prospects", but it will ultimately be up to the market to verify whether it works.

In 2012, out of curiosity, I tried to buy some Bitcoin on a foreign Bitcoin trading platform. The purchase price at that time was only about $10. I liked the concept of Bitcoin very much and thought it was a promising industry and a thorough innovation in the human trading system. So in 2013, I left Docin and founded the Bitcoin trading platform OKCoin.

In my opinion, Bitcoin is the third system in human history, besides gold, silver and the US dollar, that can establish credit among a very broad group of people. If it can establish a transnational system among tens of millions of people, it will greatly change the existing financial system.

Of course, as a credit system, Bitcoin essentially includes both transaction and investment attributes, and it is inevitable that some people will use it for speculation or investment. After entering China in the second half of 2013, it attracted a lot of attention and a lot of speculative capital, causing the price to rise to a very high level. At its highest point in 2013, the transaction price exceeded 7,000 yuan, and now it has fallen back to more than 2,000 yuan, experiencing a roller coaster-like fluctuation. In the meantime, some people have made money and some have lost money. In fact, now that the price has fallen, it will be easier to rise in the future, and when the price is cheap, the user growth will also be faster.

The price of Bitcoin depends on the number of people using it. If more and more people around the world use it, the total amount is constant, so it should rise, but I don’t think the surge like in 2013 will happen again, at least not in the short term.

The ultimate success of any new thing is determined by the market, and we cannot deny it just because of its price fluctuations. Just like the stocks of many companies, during the Internet bubble in 2000, Chinese concept stocks fell below $1, and some were delisted.

If Bitcoin always stays in the hype stage and does not really move towards the actual application field, one day people will lose confidence in Bitcoin and it may eventually fail. Therefore, the development of Bitcoin ultimately needs the support of payment scenarios.

From a global perspective, the number of Bitcoin users is growing rapidly. Moreover, from the relatively developed US market, large merchants such as Walmart, Dell, and Microsoft all support Bitcoin transactions. Several of the top investors in the US are Bitcoin holders, and many entrepreneurs who left technology giants such as Google and Facebook have also chosen the Bitcoin industry.

In China, the relevant departments issued a notice on December 5, 2013, which clearly stated that Bitcoin is a virtual commodity in China, not a legal tender, and citizens can buy and sell it freely at their own risk; Bitcoin cannot be used to pay for physical objects in China, but can be used to pay for virtual commodities, and financial institutions are not allowed to engage in this business - this is the only definition given by the Chinese government. This definition has limited its rapid expansion among the population, but it has also given it the legal identity of a virtual commodity.

OKCoin is a trading platform for users to buy and sell. We are also working on a business similar to the Bitcoin payment wallet, OKLink. One of the biggest challenges we face now is that after the investment and speculative funds intervene, some people make money while others lose money, so the operators of the trading platform will bear a lot of pressure. We also found that how to attract effective users is a problem at present. We did some promotion, but found that many users often registered to grab points, and few transactions occurred after registration.

In the United States, the development of the Bitcoin industry is relatively stable and rational. Americans are more focused on the application of Bitcoin rather than the speculation of its price, and the related products are relatively complete. Payment, wallet, security, storage, insurance , lending, and almost every aspect of Bitcoin transactions. They will deal with the financial and judicial systems, persuade large merchants, and strive to promote and use Bitcoin better.

As for domestic companies, each company actually has its own characteristics. In fact, everyone has advantages and disadvantages. Bitcoin is now internationalized. We have set up a team overseas. It is not just a policy issue, but more of a desire to make the company bigger, better and more valuable. We have also noticed that more entrepreneurs have joined this industry, which is a good thing. Any innovation will definitely go through various attempts before it can be proven whether it works or not.