Is bitcoin really worth investing in? Will it become the world currency in the future?

[CNMO] on February 16, bitcoin broke the $50000 mark, setting a new record. Its market value reached 10% of gold, about 9 trillion US dollars. What is the concept? It is more than enough to buy a Tesla Model 3 with one bitcoin, which leads many people to hope to realize their “financial freedom” through bitcoin. According to CCTV financial report, nearly 20% of South Korea’s Internet cafes are closed for mining. But the domestic is even more “Crazy”. A video card merchant in Chengdu said that six or seven out of ten who asked him to buy a card were all for mining, and the price of video card also skyrocketed. Bitcoin mining machine, however, currently bitcoin has fallen below $50000, and as of 10:00 on the 26th, bitcoin was $47708. Not only bitcoin, but other virtual currencies are also falling. On February 26, foreign media reported that the US Securities and Exchange Commission (SEC) will investigate Tesla CEO Musk’s tweet about “dog currency”. Musk responded on Twitter: “I hope they will investigate, it will be great.” After the news came out, Tesla’s intraday decline expanded to 7.4%, dog coin fell short-term, the decline expanded to 9.8%, Ethereum and other virtual currencies also fell. Bitcoin so why was musk investigated by the sec? Is musk related to virtual money? Can virtual currencies like bitcoin and Ethereum circulate around the world like the US dollar in the future? The origin of musk and virtual currency: on April Fool’s day in 2019, the official account of dogcoin launched a vote on Twitter to select the CEO of dogcoin. Musk was dazzled. Then, musk tweeted that dogcoin was his favorite digital currency and modified his twitter account information to “former CEO of dogcoin”. On February 6, 2021, musk launched a survey on twitter about “his favorite virtual currency”: will the future currency on earth be dog money or all other cryptocurrencies? In nearly 500000 votes, more than 70% of netizens chose dog currency. Musk also supported retail investors to buy dog coins in the event of “retail investor war organization”, and even changed his twitter avatar into a picture with dog coin element. This series of actions caused the SEC’s investigation, and the SEC believed that musk was suspected of operating dog currency. In addition, musk has repeatedly promoted bitcoin, and even said that users can use bitcoin to buy Tesla cars. As a result, bitcoin has soared many times, and more and more people are mining and buying bitcoin. So why does musk have platform bitcoin? The reason is simple, because he owns a lot of bitcoin and makes hundreds of millions of dollars from bitcoin. According to the times, Tesla’s profit from investing in bitcoin this year is nearly 30% higher than that of its auto sales in 2020, which also leads many bitcoin fans to believe that bitcoin will become the world’s currency in the future. Whether bitcoin, Ethereum and other electronic currencies can circulate around the world? CNMO believes that it is difficult for such electronic currencies as bitcoin and Ethereum to become the world’s common currency like the US dollar. The main reason why the U.S. dollar has become the world’s currency is that it is based on gold and oil, and supported by the strong national strength of the United States. During the Second World War, the international trade was gold. In the early stage of World War II, the United States was not affected by the war, and exported weapons and other materials, making a lot of money. After the end of World War II, the U.S. gold reserves accounted for two-thirds of the world’s gold reserves. Then, in the Bretton Woods conference, gold was abolished and the U.S. dollar was used as the international currency. Even so, the dollar is still linked to gold. U.S. dollar and gold, while bitcoin is not supported by the state and gold like the U.S. dollar, and its value fluctuation is too large, which can rise or fall thousands of dollars in a day. Maybe the bitcoin you hold today can buy a car, but tomorrow you can only buy a tire. Can such currency really be used as people’s reserve currency? Moreover, there is the issue of currency quantity and inflation. I believe many netizens have heard of Zimbabwe. Due to inflation and other reasons, the country has issued a large number of currencies, resulting in the continuous depreciation of the Zimbabwean currency. Now Zimbabwe has to use the South African Rand and the US dollar as the domestic currency. The total number of bitcoin is about 21 million, which seems to limit the number. But now 0.01 or even 0.001 bitcoins can be traded. What’s the difference between a bottom cover and a top cover? Is there really no inflation? With a face value of hundreds of millions of Zimbabwean dollars, bitcoin can only buy some goods. For example, China’s legal currency is only RMB. Even if you buy a pack of cigarettes with us dollars, it may not be accepted by businesses, let alone bitcoin. Moreover, bitcoin trading platforms are not recognized in some regions. The Shanghai municipal court once said in a bitcoin case that individuals holding bitcoin are legally protected, but China does not recognize the platform. What will happen to virtual currency in the future? Virtual currency is likely to be popular on a large scale in the future. In fact, the user experience of Alipay, wechat and virtual currency that we use now are not very different, but the actual operation mode is very different. Alipay and wechat are operated by ants and Tencent, which are typical centralization. If the two companies have problems, then deposit the money into wechat and pay Fubao users will also be affected. The virtual currencies such as bitcoin and Ethereum are decentralized, which is the “blockchain” that people often hear. It will not be affected by the problems of one or more companies. At present, digital RMB is being promoted in China, and pilot projects have been carried out in Shenzhen, Suzhou, Shanghai, Beijing, Changsha, Chengdu and other cities. What’s the difference between digital RMB and bitcoin? The most intuitive point is that the digital RMB is a digital RMB, which is the legal currency stipulated by the state, and is controlled by the central bank. It adheres to the principle of “using only but not frying”. Bitcoin is not legal tender, but more like a commodity. Most people invest in bitcoin in the hope that it will appreciate and then sell it for cash. Blockchain is a technical route considered in the development of digital RMB, but it is not the only choice. Conclusion: the value of bitcoin, a currency without state control and support, is difficult to assess. Microsoft founder Bill Gates once commented on bitcoin, saying “don’t invest in bitcoin unless you are richer than musk.” Bitcoin is more like a game of capital. Ordinary people can only make money by gambling and luck when they enter the game. If they are lucky, they may earn money. If they are not, you may be called “leek”.

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