In a long-term cycle, Bitcoin is a value game that constantly rises in the primary market, and only needs to maintain a certain amount of hashrate input, that is, it can promote the output cost of the primary market of Bitcoin ("cost increase of Zhongben") to rise by 4.3 billion times. If the increase in the input cost of computing power ("the cost increase of the source" is added), the output cost of the primary market will rise even more. Can the secondary market keep up with this pace and rhythm of the primary market? The ultimate question to be answered is: What exactly is Bitcoin?
In fact, in terms of value composition, Bitcoin originally only had a natural attribute of output cost, and did not have any specific, definite other attributes, which was determined by its "natural consensus". Whether a subsequent "secular consensus" can be formed further determines the size of the overall hash rate (how many people are willing to pay the cost to mine - that is, the total demand of the primary market), and the size of the buyer's market (how many people are willing to buy, hold and use Bitcoin - that is, the total demand of the secondary market), and also determines the final price of the secondary market.
Measured by monetary standards, an important shortcoming of Bitcoin is that it is difficult to provide sufficient liquidity according to the needs of the market. When most people in the market hoard bitcoins for some reason, and these hoarded bitcoins no longer enter the circulation market, and the new bitcoins produced by the "natural consensus" mechanism are quite limited, this creates a "squeeze" of bitcoin, making it difficult for users who need bitcoin as a circulating medium of exchange (currency). This is clearly not a property of a normal "currency". Therefore, simply because of such a name, it is naïve to simply think that this digital subject matter must be a form of money, or to be recognized as an epoch-making new form of global money beyond sovereignty. Of course, on the other hand, if Bitcoin is widely accepted as a medium of value circulation, it will naturally have certain currency attributes or functions, although this phenomenon is not necessarily reasonable.
Bitcoin is also not a commodity, because the increased production capacity can not increase the supply of bitcoin at all, but can only push up the cost of output per unit of bitcoin. Bitcoin is also not a bond or a security, as it is difficult to correspond to a particular claim, or to the right to income represented by an interest.
Looking at the various properties of Bitcoin, it is most appropriate to use the analogy of "collectibles". This collection has only one natural attribute, that is, the cost of output is getting higher and higher, and in more than 100 years, the cost will rise by at least 4.3 billion times until the output is completely exhausted. The player has only one choice, whether to "play" or "not to play". Therefore, the "coin" word of Bitcoin is actually more similar to a kind of "medal", and if you want to get this specific medal, you need to pay an increasing price, so whether you recognize the value of this medal is a choice among collectors. As a collectible, it can be used as a "stored value tool", it can also be recognized as an "asset", if it is convenient to "carry" and "use", then it can also be used as a "medium of exchange", as long as the collection has a collection value recognized by the collector group.
Using the analogy of the philatelic market, the philatelist recognizes the value of a particular stamp that rises and falls depending on the short-term supply and demand pattern of the stamp. The collection of paintings became an industry, although the number of people was small, but due to the amazing purchasing power of this collection group, the scarcity of high-quality paintings was also valuable. The act of collecting depends entirely on beliefs, hobbies, fantasies or any irregular reasons that vary from person to person, and the items collected can be of any form or category. The value of a collectible depends entirely on the size, purchasing power and availability of the people who want to acquire it at the same time.
Since "gain" corresponds to "hash power consumption", a more complete definition of Bitcoin seems to be a "medal for hash power consumption". When the cost of acquiring and producing such a medal (the primary market) exceeds its collection, holding and use value (the secondary market), and the value law of the primary market is written, the value law of the secondary market and the primary market will eventually be decoupled – this may be an important conclusion. For example, if "nuclear waste" were to be calculated as having its "output" value (primary market), it would be very expensive, but humanity would treat it as a negative asset (secondary market) because it is not only useless, has no collection and holding value, but also has to be treated in order to avoid disasters. In principle, the secondary market has always been the ultimate determinant of the primary market, not the other way around.
The early use value of Bitcoin and other cryptocurrencies may be to circumvent the supervision of various countries, and its anonymity, decentralization and networking characteristics support the convenient cross-border circulation of black and gray gold. At the same time, the resistance to fiat currency, such as the negative interest rate policy implemented by some fiat currency issuers (such as Japan), or the credit or availability of some fiat currencies is even inferior to that of cryptocurrencies, is also one of the important reasons why some users pursue cryptocurrencies. Further, when icOs appeared, a new market demand for cryptocurrencies was created, providing a new ecological environment for cryptocurrencies. In the past, there was only a financing market, and now there is a financing market, and in order to participate in the operation of icos, you must first have a certain amount of cryptocurrency (this behavior can be compared to the so-called petrodollar system that the United States has been working hard to build, using the US dollar as the currency for international crude oil trade to price and settle, providing a strengthened market foundation for the US dollar). According to reports, the cumulative financing of ICOs reached about $4 billion by the end of 2017, and driven by the ico boom, the unit price of Bitcoin rose as high as about $20,000, multiplying the unit price by the total number of more than 16 million bitcoins that have been issued so far, and it is known that the peak of the overall holding market value of Bitcoin has exceeded more than $320 billion. The $4 billion in total ICO financing accounted for only 1.25% of the overall market value of Bitcoin at its peak. In other words, assuming that all the coins raised by the ico come from Bitcoin (and actually other cryptocurrencies), the overall holders of Bitcoin have exchanged a significant increase in market value for a negligible (1.25%) price, from a unit price of 100 to $200 in 2013 to a maximum of $20,000 at the end of 2017, an increase of more than a hundred times. (Of course, strictly speaking, the statistics of the total accumulated financing of ICOs are converted according to what currency value, and the calculation of the above proportion should be converted according to the currency value of which point in time, should be studied in depth, so the above proportion can only be a conceptual estimate, not very accurate.) From this point of view, although disorderly ico behavior has issued a large number of so-called "air coins", even if the investment in these icos (to be precise, coin-operated, not investment) will be lost in vain in the future, it may still be a dime loss for large holders of bitcoin (and other major cryptocurrencies) - because the ico phenomenon pushes up the price of cryptocurrencies, they can get much higher compensation from the rise in the value of their stock coins. Due to the lack of strict rules and order in the ICO market, all kinds of token issuance are mixed.
Despite the above discussion, a phased reality to be seen is that Bitcoin and other cryptocurrencies are creating a self-generating ecosystem and corresponding use value. At the same time, the emergence of ICOs also reflects the demand for more flexible and convenient financing (financing) behavior in the market. As the blockchain industry matures, it is possible for ICOs themselves to evolve into more controllable forms. Blockchain technology was originally built as a set of "trusted" networks, but in its initial stage of development, the major exchanges that advertise cryptocurrencies with decentralization as a logo are built by centralized technology, and there have been repeated serious theft accidents, and the issuance of tokens also implies a large number of integrity hidden dangers, which is a huge contrast with the original intention of blockchain technology. The development of anything is a process from immaturity to maturity. In time, blockchain technology may finally be able to solve the problem of "credibility" in its own ecology.
Satoshi Nakamoto invented Bitcoin, becoming the first cryptocurrency. But in fact, this opens up a cryptocurrency race. In the first article we mainly explored that most cryptocurrencies enjoy the same origin of "natural consensus", so cryptocurrencies are diverse. However, so far, nine years after bitcoin was launched, there is still no more effective cryptocurrency that substantially surpasses the Bitcoin mechanism to be generally accepted. Ethereum opened a new chapter in smart contracts, but it proposed in the first white paper in 2013 that it would use the proof-of-stake mechanism to replace the proof-of-work mechanism that Bitcoin relied on, but it was delayed and did not successfully launch, and in May 2017, it announced a new plan for the pow+pos hybrid mechanism, and postponed the launch of Ethereum 2.0 to 2020....
Vitalik buterin, the founder of Ethereum, proposed: "Due to Bitcoin's high transaction fees, long confirmation times, and the delay in solving the problem of block scaling, Bitcoin is very far from the perfect cryptocurrency...". In fact, Bitcoin is still quite far from a qualified cryptocurrency, and the problems are far more than butin pointed out above. Even with the existing Bitcoin technology, it is questionable whether Bitcoin's existing issuance mechanism and economic model can withstand the verification of rationality under a long period of time. As the cryptocurrency market booms, demand for cryptocurrencies is opened up, and some more reasonable and qualified cryptocurrencies emerge, more likely – this is a subjective judgment. At the same time, a number of technologies with iterative potential have also emerged, which will be discussed in parts five and six.
As the founder of blockchain technology, Satoshi Nakamoto has created a new territory of blockchain, and its important historical position will eventually be confirmed. However, Satoshi Nakamoto knows very well that the Bitcoin ecosystem he founded, "to play" or "not to play", will bring a test of humanity to all sentient beings. Therefore, he chose to fade. For bitcoin, a first-generation, old-fashioned but problematic cryptocurrency, there is a high probability that there will be a cooling day, but what people don't know is when this cooling will occur and when the old qualification will be replaced. It's also important to understand that owning Bitcoin is like betting on the future of a company that is in the midst of a lot of competition from other companies. In the cryptocurrency family, there will be competition in terms of the actual advantages of ecology and use, and who loses and who wins is known only in the future. But this is actually an iterative process of technology, but this iteration of technology is directly related to "money".
Looking back at the arrival of each wave of technology, it will go through many iterations and bring new social problems. At the beginning of 2000, the US market experienced a bloody wave of Internet bubble bursting, when the etoys, pets.com, the social networking site theglobe .com, the originator of o2o logistics e-commerce, and the collection procurement concept of futuresceone, purchasepro, etc., were once worth billions of dollars, but later all closed down and closed, forgotten by posterity. However, the Internet industry survived, and Amazon, eBay, and later Google, Facebook, Apple, China's Tencent, Ali, etc., reached the peak of the industry.
![Zhang Xiangning on Blockchain: Is Bitcoin "Digital Gold"[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)