Bitcoin speculation bubble burst technology this year, failed to fix the greed and fear

Coming at the end of the year, there was a big thing in software industry. The market value of Microsoft Corp at the end of November than apple and continues to this day, this is 8 years ago after Microsoft was first apple over the counter ultra.

But this is not because of what the new Windows mobile phone operating system, but to the enterprise cloud products continued growth of computing. Today Microsoft is basically a company like IBM, on their own decades of accumulated customer relationship, sell individual users do not see the software to the enterprise.

But continued to burst due to iPhone, Android popular less innovative applications. This year the two highest income apple App Store applications are Netflix, Tencent video, their focus is not the software itself, but billions of dollars to buy the story.

Apple and Google this year their vote list is also worth mentioning that the new trend of Apple recommends “self promotion application”, while Google will direct their YouTube TV as the annual application.

We like this year in the annual hardware in the selection of observation, consumer products no longer drive growth. The software industry is lack of innovation, but the world is not the lack of software impact, the greatest impact of bitcoin as a currency based on digital database, bitcoin is a software product of the times out and out.

From a $twenty thousand to below 4000, bitcoin reproduce the curve type in the tulip bubble

In the past two years, bitcoin has experienced change radically. In December 16, 2017, bitcoin prices reached the highest point in history — $19650 by the end of 2016, compared to $1000 over 20 times. To now, digging out the total bitcoin 1742 million Meilai calculation, the total value of bitcoins highest point more than 3400 billion dollars, Alibaba’s market capitalization approaching.

In 2018 years, bitcoin price shock all the way down. Now the bitcoin price of only $3747, compared to the peak in December last year has fallen by 80%. The total value of global bitcoin only about $65 billion 300 million, nearly $280 billion evaporated. In order to estimate about 20 million bitcoin investors quantity calculation, the average investor losses of $14 thousand.

From birth to now ten years, bitcoin from a string of numbers become Wall Street not worth a hair, can not be ignored, to absorb the world’s $300 billion investment darling, and aroused intense discussion of the financial world, shaking the shares of listed companies, a huge wealth broken — none of the company’s software this year than it brings a greater impact.

Involved more than about 20000000 investors, and mining people and its manufacturing company. The so-called mining, refers to sell computing power to get bitcoin reward behavior. In late November of this year, bitcoin has several times below the ore price. This meant a bitcoin cost is higher than its value. The first half of the year to submit the prospectus, offer three Mills Company of high profits, the mainland, Chia Nan Yun Chi bit and Tianhe International, not only may not be listed, even the survival problems.

The traditional financial institutions to enter the carnival before bitcoin plummeted. In May 2017, Goldman said ready to carry out bitcoin transactions. In December 2017, bitcoin futures began trading on Wall Street, the two trading.

As for the fast coming out, and other digital currency quickly disappeared, has become difficult to statistics.

From the beginning of a long time in 2017 suddenly not worth a hair, and then to 2018, the sell-off rebound, shocks, changes in the value of bitcoin shows a rather complicated curve.

The basic curve and tulips, South Sea Co and other classic bubbles of the same:

The production of Merrill Lynch bitcoin summit time curve and the horizontal axis is the time axis with respect to the summit, three years before the price ratio. From the top down, bitcoin, tulip, Mississippi Company, South Sea Co, gold, stock market crash of 1929

In 1500s, the Dutch tulip planting and sought after Technology Co. to the price of tulip bulbs to terrible height. Huge profits attracted many investors, almost every person involved in the transaction — from low-income artisans to society — think of taking advantage of the good times at the flower Tun and then choose to sell profit contract. By the end of 1636 to February 1647, the tulip bulbs prices rose ten times, some people even willing to use a house for.

But the tulip itself does not create value, as demand dried up, has soared to unsustainable levels of tulips also followed in a few weeks apart.

100 years later, sir Isaka Newton discovered the law of gravity in a huge bubble activity in.

In 1720s, the great physicist sold the shares of the South Sea Co, a profit of 100%, about 7000 pounds. At that time the South Sea Co bubble peak, Newton believes that the market has lost the reason, he can not understand the market investors crazy, “I can calculate the motions of heavenly bodies, but not to the madness of people.”

However, the stock sold less than a month, Newton in the market frenzy of the infection, with much higher than the original selling price and bought the South Sea Co, it lost 20000 pounds (equivalent to about $3 million today).

Professor Buffett Benjamin Graham describes the outstanding intelligence can not resist the greed of human nature illustration in his works of “smart” investors in. But in the United States during the great depression, Newton Graham has repeated the wrong judgment, in stocks plummeted after trying to hunters, and lose all assets.

Although behind bitcoin is called software, can challenge the block chain technology of the modern financial system, is to the center of a technology, anti regulation, different from plant bulbs or stock. But for this with a gambling mentality trading it investors aren’t what difference influence it is human rather than technology. At the end of it and tulips, different time and different forms of these South Sea Co stock bubble performance was not what difference.

Bitcoin has a technology story, and a slow start

Bitcoin originally had a nice vision, is a technology to change the story of the world.

In 2008, the global financial crisis. Nakamoto wanted to create a free government or other central control, never super “money” effect, keep it away from a few years once the financial crisis, becoming the general public can not be deprived of property. In a 13 page white paper, he described the bitcoin — a complete electronic cash system through the point to point technology, it makes the online payment can be directly initiated by one party and paid to the other party, does not need any of the financial institutions.

Before 2013, it is in the latent period, it is wise to invest money stage. The National People’s Congress admission of this period is the information monopoly, some of them know the blockchain technology, can skilled use of mining tools, Chinese investment value, which has added bitcoin investment because the Cong concept sought. During this period, a bitcoin prices less than $30.

2013-2016 years is the awakening period, during which the institutional investors play. A large bitcoin fund, more and more stock exchanges began to support bitcoin transactions, there are more and more companies to accept bitcoin payment service fee. In early 2013, bitcoin exchange rate against the dollar is less than $30, the first rose sharply and sale in 2013.

Throughout 2013, bitcoin rose about 9205% in December, rose to a peak of more than $1237.6 from $13.3. Followed by a wave of sale and price. Bitcoin ushered in two years long decline. By the end of 2015, bitcoin has fallen to $200. This period was called the “bear trap bubble curve”.

But at the same time, bitcoin become known. Microsoft, Steam, DELL and other companies have begun to support bitcoin payment. To 9 2016, the number of ATMs bitcoin worldwide reached 771.

In 2016, the world’s bitcoin exchange reached dozens, which makes unclear bitcoin address something people can facilitate bitcoin trading. China domestic bitcoin trading once occupied the transaction volume of global 80%. 2016 years 12 months, bitcoin once again exceeded $1000.

This is crazy, bitcoin from the opening in 2017 of $909, up to $19650 in December 2017, up 2061% a year.

Finally, about the change of the value of bitcoin is no longer, but greed and fear, human instinct

Fever after arrival, some investors warn.

Buffett firmly denied bitcoin. “I can almost certainly say they will usher in a bad ending, but what happened, I don’t know how it happened.” Buffett in January this year, CNBC said, “we don’t hold bitcoin, nor short bitcoins, we will not hold any positions. In those things I know, I have to deal with the problem is enough, why should I be in some I don’t know what to do more short?”

In May this year, after the first half of the concussion, bitcoin price to $9000. Although compared with the peak period has fallen by half, but in the eyes of many people is still very attractive. Buffett once again stand out of this kind of assets are not optimistic. He put the bitcoin compared to gold, think that they have a common defect. First of all, they are non productive assets, gold itself could not produce more gold, also could not produce any other value, and the acquisition of oil can produce oil, acquisition of factories can manufacture products, stock investment can produce dividends.

Secondly, bitcoin and gold lack of practical use. Although gold can be processed into jewelry or some other use, but these are not enough to support the needs of a wide range of. Although bitcoin can be used for the transaction, but the transaction speed than Apple Pay, such as Alipay mobile after the central bank payment means much slower, in addition to the special needs of black industry trading behavior hidden, for ordinary people, it is almost no transaction value.

Buffett does not throw gold, so it will not vote bitcoin. He called it a speculative nature of the “buck Rodgers” phenomenon, the trading behavior all by your own judgment of change, just like the tulip bubble.

Buffett’s old partner, Boxill Hathaway, vice chairman of Charlie Munger sharp: “bitcoin craze particularly foolish. I have never considered any bitcoin investment. When bitcoin appears, I hate it. Bitcoin speculation more heat, the more I hate it.”

“I may not love money more than Buffett encryption. Bitcoin and other encryption currency is a bubble. In my opinion, this is the brain of dementia. Like others in the transaction of shit, you also go cougerenao.” Munger said.

In addition to Buffett and Arista extra, Microsoft founder Bill Gate (Bill Gates), economist Nouriel Roubini (Nouriel Roubini) and Robert Hiller (Robert Shiller), there are many well-known fund managers are bitcoin opponents.

But these have the most right person views in the traditional financial world has not become the mainstream voice of bitcoin world. Don’t think bitcoin value and that both parties bitcoin value are added to the powerful fans, the winner has not yet been a quarrel angle.

JP Morgan CEO Jamie Damon (Jamie Dimon) is a typical “defection” from one party to the other party for example. He said that bitcoin is a hoax “in September 2017, said bitcoin transactions will fire in the staff,” a reason is to do so in violation of the provisions of the company, two is such a stupid practice”. But soon discovered Morgan chase in bitcoin investment, Damon himself in 4 months after the said bitcoin is currently worth how many not to say, but behind the block chain is useless.

At the beginning of 2018 plunged to a lot of people think of the hunters, which also has “from 0 to 1” of the author, PayPal co-founder Peter Till (Peter Thiel). Till has an unusual investment perspective, he not only saw Facebook earned tens of $one billion, is in charge of the election of Trump. Till and Buffett is a bit like, he will bitcoin compared to gold, but he believes the investment value of gold. “I’m skeptical of most virtual currency, but I think a lot of people do not understand the value of bitcoin. Specifically, bitcoin is more like gold, is a kind of value means rather than the means of payment. If bitcoin eventually turned into a digital version of the gold, there will be great potential for development.”

Bitcoin was always known as the gold and gold, because it is the same with scarcity, and its quantity is limited. 21 million, this is the framework of Nakamoto Soichi began to set the. Bitcoin enthusiasts often mention this figure, to prove that the bitcoin collection value.

Munger earlier retorted, “believe me, man must have the ability to create more bitcoin. They say what rules are there we do not like, do not believe them. When the stimulus is strong enough, bad things happen.”

The fact is a bad thing happened. In August 1, 2017, bitcoin cash (Bitcoin Cash/BCash) bitcoin blockchain first became hard bifurcation. The bifurcation like printing money, have let bitcoin people have more money and they split, with a new digital currency trading profit.

Then, bitcoin has become a bifurcation and get out of hand. For example bitcoin candy (Bitcoin Candy), bitcoin pizza (Bitcoin Pizza), bitcoin God (Bitcoin God), bitcoin belief (Bitcoin Faith), bitcoin diamond (Bitcoin Diamond), bitcoin gold (Bitcoin Gold), bitcoin atom (Bitcoin Atom) and so on.

In May this year, a study of BitMEX Research said that since August 2017, only bitcoin block chain had 44 bifurcation. In other words, bitcoin derived from at least 44 copies, of which there are four kinds of 24 hour trading volume exceeded $100 thousand, respectively, bitcoin bitcoin cash, gold and diamonds, bitcoin bitcoin privacy (Bitcoin Private). More than bitcoin’s own rules limit bitcoin derivatives just appears.

Ideally, the so-called “bifurcation” is the goal of optimization technology in the existing block chain, but the fact is not so. Coinomi CEO George Kiminos (George Kimionis) said, “unfortunately, most of what we see today bitcoin hard bifurcation project based on the sole purpose is to make money. From now on, we may be realized in a few years, these prices blind encryption currency investors eyes, they did not contribute to ecosystem serious crypto currency.”

The story of the progress at this stage, the bitcoin world has been full of speculators. “Financial Times” will hold back 1 years longer than the user defined for investors, holding money in less than a year to sell the user called speculators, the data show the number of investors in November 2017 is about three times of speculators, by April 2018, increasing the number of the two party is: investors holding 6 million, speculators hold 5 million 100 thousand.

Moreover, “Financial Times” is the standard bitcoin wallet, so transactions in the exchange of people do not include the conclusion. This means that in fact the fastest selling fast out of proportion will be much higher.

Those who advocate early Nakamoto So, easily dug up tens of thousands of people have left the bitcoin. Bitcointalk statistics show that 4 years ago, the world has a number of more than 100 thousand bitcoin address accounts for 70, they held a total of 3 million 600 thousand bitcoins. Now only 5 still holds more than 100 thousand bitcoin address, together close to 570 thousand. That early a lot of bitcoin on hand cash account has been in the past few years, the influx of people to pick up the disc, which we see this year slump.

Other encryption as the currency plunged, and the issue of encryption currency financing behavior mostly proved to be faster bubble, or fraud. According to the survey of digital encryption currency news website Bitcoin.com on 2017 of the ICO project, in the 902 ICO project tracking of TokenData company, there are 142 projects in the financing before the failure, there are 276 projects also declared in financing after failure. This calculation, last year ICO project failure rate reached 46%. At the same time, Bitcoin.com pointed out, there are 113 projects in the “failure” state, or their team lost contact, or their community has half-dead. With the 113 “half failed”, the failure rate has risen to 59%. Bitcoin.com estimates that in 2017 the failure of the ICO project a total of $233 million in cash for harvest.

Volatility, the value of bitcoin as a trading currency would not exist.

In the earlier, bitcoin ever really by its advocates as money into the economy to try. In 2016, the Japanese cabinet will admit that bitcoin virtual currency such as equality and the means of payment for real money. The Steam game platform then announced support bitcoin payment. In July of that year, the Argentina government blocked the credit card, a taxi company Uber in the local open bitcoin payment.

But in fact, announced their support for bitcoin Payment institutions is not in the transaction bit currency, but need to go through the third party payment bitcoin exchange into the traditional money charge.

If you want to buy a laptop computer on the DELL website bitcoin, the entire process behind this is that buyers buy a $1000 laptop computer, choose to pay with bitcoin. Bitcoin third party payment agencies Coinbase shopping by the amount of exchange rates for about 1/3 of bitcoin, bitcoin buyers pay for it, while DELL received $from beginning to end, DELL will not receive bitcoin.

But in fact, many have expressed support for bitcoin trading companies including DELL also in the last few years have been canceled support. For them, bitcoin transaction procedures are too cumbersome, and each time the transfer will take about ten minutes, fully reflects the efficiency. More importantly, changes in the price of bitcoin more and more, is not suitable as currency.

For example, at the beginning of this year about currency price of $10 thousand, a person holding ten coins, can buy a luxury sports car. But half a year later, in Chinese will buy a B car. This is a high-risk investment products, rather than most people are willing to store the life savings of money.

Over the past ten years, bitcoin to gather a lot of wealth, get a lot of controversy, but also changed people cognition of the digital currency for a variety of new crypto currency was born later.

While Nakamoto bitcoin defined ten years ago that a block chain system still continue to be used, even if the calculated born later encryption currency is more reasonable and more perfect system, but no one can surpass it.

Few leading the world in a decade of software industry, bitcoin show prospective rare. But Nakamoto envisaged in the “save property” for ordinary people did not realize the goal, with more and more people use it as an investment currency speculation, it is more and more far distance. Even after the block chain database which has more applications, does not change the bitcoin itself as speculative commodity value.

Bitcoin was born ten years, the significance of its existence and Nakamoto’s identity is still a mystery.

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