Why is Bitcoin , a virtual currency banned in China, so valuable? Why should the bitcoin produced by China’s “mining” be given to the United States? Let’s walk into today’s topic: the madness of Bitcoin. —-Introduction
Recently, people who care about the stock market and Bitcoin are not difficult to find that Bitcoin has gone crazy. In just a few months, Bitcoin has doubled again. Now one Bitcoin can buy three to four thousand US dollars. Will Bitcoin really exceed $100,000, or even millions of dollars? In fact, in July 2020, when Bitcoin players were still cheering for the breakthrough of 10,000 U.S. dollars again, just a few months passed. In March 2021, Bitcoin once exceeded 60,000. U.S. dollars, you know, when Satoshi Nakamoto invented this thing, he only had three cents. And now Musk announced that it will buy 1.5 billion US dollars of Bitcoin on behalf of Tesla. China’s Meitu Company, which has suffered a huge loss of 12.1 billion in 7 years, has also announced a high-profile purchase of 260 million yuan in Bitcoin this year.
“Mining” digs up two-thirds of the bitcoins in the world, all mined from China. When it comes to the production of Bitcoin, it is “digging” through the endless calculations of high-performance computers 24 hours a day. In this process, a machine with a super graphics card and a high-performance CPU is needed. It usually requires hundreds, thousands, or tens of thousands of such machines to work at the same time, and the choice of location is mostly a professional site with ventilation, suitable temperature and suitable humidity. , Also need to have stable power resources, as well as certain management personnel. The most important cost is the depreciation cost of running the computer and the electricity cost of using the computer. Why is China suitable for Bitcoin mining?
There are two main points. The first is that my country’s electricity bills are cheap. Because of the abundant hydropower in Sichuan Province and the low cost of coal power generation in Inner Mongolia, the first Bitcoin mining was chosen in these places. Earlier, due to supervision Ineffective, many companies use their own electricity generation and steal electricity to conduct mining. Later, after formal adjustments, even using the National Grid to mine in the world is considered to be a relatively cheap electricity bill. The second point is that China is a global producer of electronic products, so the electronic products used in the mining process can be purchased at the lowest wholesale price, which greatly reduces the cost of mining equipment. Taken together, China has become the country with the lowest mining cost in the world, but we can produce such a huge number of bitcoins, why should we be banned?
The guarantee of virtual currency First of all, we have to make it clear that Bitcoin is a virtual currency. Compared with traditional currencies, virtual currencies often feel unreliable, mainly because traditional currencies are guaranteed by the government. Such currencies as the U.S. dollar, RMB, etc., can be recognized all over the world, not because of how exquisite they are printed, but mainly because there is a powerful country behind it that guarantees the value of this currency, so ordinary people will Choose to believe, and people will use it only if they believe it. Then the existence of this currency is valuable. To put it simply, if things like currency want to become valuable, they need a powerful entity to guarantee it. Take a shopping card in a supermarket, a recharge card in an Internet cafe, or a membership card in a barber shop.
Because there is an entity behind it guaranteeing it, it is equivalent to the existence of this entity promises the value of this method, to ensure that everyone can obtain the corresponding goods or services through this method, and only through this, the so-called paper currency will have Its value. But for the digital currency, the guarantee is erased, so everyone has unreliable ideas about it. Then why did Bitcoin appear? In fact, the emergence of Bitcoin is precisely because of the distrust of the guarantor. Even if the guarantor is the country or the government, Bitcoin is not at ease. The reason for this problem is mainly because of the impact of the 2008 financial crisis. It was so big that many people saw the uncontrollability of inflation and the bubble economy. Even if the state intervened, many people were destroyed. It was at that time that Bitcoin began to appear.
Bitcoin’s decentralization has to talk about its unique method: decentralization. What does it mean? This requires us to fully understand the guarantee mentioned earlier. Currency is guaranteed by the state and the government. In other words, currency is a kind of evidence. If you receive a sum of money from someone else, then the money is evidence. You provide a commodity or a service to others, and the money is also a record, recording the transaction process between you. And Bitcoin does not need to be recorded by the guarantor, let alone unified evidence. Its method is very simple, that is, when every transaction is carried out, it is broadcast to everyone, and every Bitcoin transaction allows everyone to knowledge. This is like Wang Wu transferring ten yuan to the sixth. He doesn’t need to keep the account. He just needs to go to the village loudspeaker to broadcast during the transfer process, so that everyone knows that there is this time between Wang Wu and the sixth. Trading, in this way, everyone who hears the news are witnesses to both of them.
Therefore, everyone has become a bookkeeper, and everyone will have such an account in their heart, recording everyone’s transactions, and reflecting it from another perspective. Everyone has become the center of this transaction, and only if every Individuals have become the center of this transaction, and there is no center. This is decentralization. Such an approach can exist in theory. At present, this approach is completely feasible, but it also requires a prerequisite, that is, there must be enough people in the Bitcoin transaction circle, and enough people are willing Believe in this transaction method, if everyone does not believe or agree, Bitcoin will not exist.
Why should China ban Bitcoin? Since various fund companies in the United States began to buy bitcoins, the value of bitcoins rose day by day, until Musk announced on February 8, 2021 that Tesla had invested 1.5 billion US dollars to buy bitcoins, which once again caused bitcoin to skyrocket. . According to public data, since January 2021, Master’s profit through Bitcoin has reached as much as 930 million U.S. dollars. This income is more than he earned from buying a car for a whole year. What about such a huge profit? Can you be jealous? So under the leadership of Master, many technology companies in Silicon Valley entered the game one after another and began to buy Bitcoin. Up to now, more than 6.9 billion U.S. dollars of Bitcoin in the world are in the hands of listed companies. Therefore, in the future, the ups and downs of Bitcoin will directly affect the performance of many listed companies, which will affect the global financial structure. .
In fact, not only China, but the United States also does not want Bitcoin to exist and want to ban Bitcoin. However, due to the different judicial system in the United States, it cannot be like China to completely prohibit the use of Bitcoin and make Bitcoin disappear. Therefore, the United States has chosen a completely different path, which is to firmly grasp Bitcoin in the hands of the country and achieve the purpose of control through monopoly. In fact, whether it can be firmly controlled and whether it will have an impact on the US dollar, Daniel believes that even the United States cannot guarantee it, and they can only control it as much as possible.
The reason why Bitcoin is banned is due to the aforementioned impact on the country’s existing currency. After all, Bitcoin is a virtual currency. As a virtual asset, there is a great regulatory risk. A natural site. The most important point is that Bitcoin is not a currency issued by the country. First of all, it cannot be equal to the national currency in terms of status. Once it is connected with the national currency, uncontrollable phenomena will occur, which will have a serious impact on the country’s economic system.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/why-most-bitcoins-come-from-china-they-are-all-sold-to-the-united-states/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.