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The value and opportunities of blockchain from the difference between virtual currency, electronic currency and bitcoin

Time : 17/11/2021 Author : bulgjh Click : + -
        It should be noted that although the value of bitcoin cannot be artificially manipulated by mass manufacturing, it can be artificially manipulated by injecting funds into the trading market. The design based on cryptography can make bitcoin only be transferred or paid by the real owner, which also ensures the anonymity of currency ownership and circulation transactions. Virtual currency refers to non real currency. Well known virtual currencies, such as Baidu coin of Baidu company, QQ coin of Tencent, Shanda coupon counting, wechat launched by Sina, etc. The following analysis is represented by Q currency. Q-coin is a kind of virtual currency launched by Tencent. It has an issuer. Its price is very stable and will not fluctuate due to market interference.
 
        Q coins can be used to open businesses and purchase virtual goods in Tencent's applications, and cannot be cashed out. Bitcoin does not rely on specific currency institutions to issue, according to a specific algorithm, through a large number of calculations. The biggest difference between bitcoin and virtual currency is that its total quantity is limited and it is extremely scarce. Although both have prices, because q-coin is a virtual product issued by Tencent, its pricing power is completely owned by Tencent and is not affected by any institutions or enterprises. Bitcoin is a decentralized product, and there is no central issuing agency, so its price is completely determined by the market. This also causes it to be hundreds of dollars a piece when it is low, and even tens of thousands of dollars a piece when it is high.
 
        Q coins are issued centrally, and the decision-making power lies with Tencent. Tencent will decide how much it wants to issue, at what price, and what products it can buy. Whether bitcoin can buy goods and other purposes is up to the user. When a certain number of people accept the concept of bitcoin, businesses will consider accepting bitcoin payment, especially bitcoin, an Internet website and service provider. For example, reddit, a social news and entertainment website focusing on user generated content, began accepting users' gold medal service of using bitcoin to buy reddit in February 2013; OkCupid, a free social networking site, has accepted users to use bitcoin to purchase its services since April 2013.
 
        Bitfish, a bitcoin fashion store launched in April 2013, has become the world's first fashion website that supports bitcoin payment. Users can directly buy products from Zara (Spanish clothing brand), Forever 21 (American clothing brand) and mrporter (a famous online men's clothing boutique in the United States), and other fashion brands have joined in succession. Under the issuance mechanism, the issuance data, usage data and relevant information of all Q coins are completely in the hands of Tencent. Theoretically, only Tencent can view and analyze all data storage, and others have no power. It is completely centralized storage, and there is a risk of data leakage.
 
        Bitcoin is a mechanism that data such as transactions and transactions are completely stored in the blockchain. Players can view the data through the blockchain browser. The data storage does not depend on any server or person, and it is self managed. E-money refers to using a certain amount of cash or deposits to exchange from the issuer and obtain data representing the same amount. By using some electronic methods, the data is directly transferred to the payment object for consumption or debt repayment. The essence of electronic money is idealized monetary information, which is actually a special information composed of a group of data containing the user's identity, password, amount, scope of use and so on. After these information is transmitted to the merchants who set up this kind of business, both parties of the transaction will make settlement.
 
        This method is more convenient and faster than cash transactions in real life. Bitcoin is a kind of electronic currency. It is artificially designed. It does not need to be issued by the central bank or a third-party institution in real society, nor does it need to be cleared by a specific network. The number of bitcoin has increased steadily and the total amount is limited. No institution can control the issuance of this currency, so there is no fear of excessive issuance leading to inflation. With the increasing difficulty of obtaining, the value of bitcoin also soared. All matters related to bitcoin, including issuance, transaction processing and verification, are carried out through the network, and no special agency is required to monitor the entire capital flow process.
 
        In contrast, traditional currencies are issued by central banks. For example, in the United States, the Federal Reserve is responsible for the issuance of U.S. dollars, as well as the implementation of national monetary policy, supervision of the U.S. banking industry, maintaining the stability of the financial system, and providing corresponding financial services to depository institutions. Although companies such as casascius and bitbills have bitcoin in physical form, the original intention of bitcoin design is a digital currency. At present, the physical form of bitcoin is still a novel product, but for most advocates of bitcoin, the physical form of bitcoin has gone against the original design intention. On the contrary, traditional currency mainly exists in physical form, and the funds in bank accounts or online broker accounts can be converted into US dollars in physical form.
 
        The mining process of bitcoin can produce 25 bitcoins every 10 minutes, and the output will be reduced by half every four years. Therefore, the circulation number of bitcoin will reach the issuance limit in 2140. Although some critics believe that the upper limit of bitcoin issuance is small, supporters believe that the value of a bitcoin can reach 8 decimal places (the smaller unit of bitcoin is satoshis, 1 bitcoin =10000000 satoshis). That is, the maximum number of bitcoin can reach 2.1× 1015 satoshis, enough to meet various needs in the future; The traditional currency issue has no upper limit.
 
        At present, there are not many places where bitcoin can be accepted, and it cannot be widely used in physical stores. Of course, with its popularity, this may change in the future. The transaction needs to wait about 10 minutes or more to confirm. The transaction is almost irreversible, and the refund can only be made by the recipient of bitcoin. With the consent of the recipient, the initiator of the transaction can also choose to cancel the transaction. If you accidentally lose bitcoin, for example, the computer hard disk crashes or hackers attack the user's bitcoin wallet and steal the bitcoin, or the trading center that stores the bitcoin balance closes down, the user's balance will return to zero. However, the monetary balances of existing banks can be protected from the impact of bank failures, etc., because they enjoy the insurance of the Federal Deposit Insurance Corporation of the United States.
 
        Of course, if the government fails, it is another matter. Blockchain is the underlying technology of bitcoin. Although many people learned about blockchain through bitcoin, it is OK to say that bitcoin made blockchain, but bitcoin cannot be equated with blockchain. The official explanation is that blockchain refers to a new application mode that integrates distributed data storage, point-to-point transmission, consensus mechanism, encryption algorithm and other computer technologies. Bitcoin operation adopts the "workload proof" mechanism. When any data in the system changes, the system will judge a computer with the fastest and best bookkeeping, write its records into the ledger, and the corresponding computer will also receive a corresponding amount of bitcoin rewards.
 
        Blockchain has a huge technical advantage. Through this tamper proof distributed ledger, it can create and produce the first thing in human history that is realized solely by technical means, has natural trust, and cannot be copied. But this kind of credit also consumes huge social costs. For example, with a population of less than 400million, the United States needs tens of millions of public servants to maintain the operation of the government and provide national credit. What is recorded in the account books in the blockchain is the so-called "currency", which is non reproducible and non modifiable by using technology. Therefore, it naturally has credit and can be used to represent various assets and values. If your assets are in the account book of the accountant in that year, in case the account book is burned, the assets will disappear; If your assets were in the banks during the period of the Republic of China, the Republic of China perished, and your assets also disappeared.
 
        But if your asset is bitcoin, unless all the nodes of bitcoin are destroyed, as long as there is still one person in the world, the whole system can be restored. This is also the reason why some people jokingly say that only alien invasion can destroy bitcoin. Since the Internet era, we have realized the interconnection of information; The popularization of mobile communication technology has realized the interconnection between people; Now, with the development of 5g technology and Internet of things technology, we are about to realize the interconnection of everything. The foundation of value connection is trust. People urgently hope to establish trust through some technology and mechanism, and establish a low-cost operation channel for the circulation of value.
 
        Blockchain just provides a solution that can meet the conditions. It can provide a safe and tamper proof storage and recording method for data and transactions, and solve the trust problem from the mechanism level. From the perspective of economics, the establishment of trust mechanism can promote economic development. Therefore, I hope that more friends will not focus on "speculation", nor use the traditional way of thinking to understand and learn blockchain, but more understand the changes it can bring to social collaboration, and then look for opportunities to change personal destiny from these changes.
 
        
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