Can not jump out of the trap of bifurcation: vulnerability bitcoin competing interests

More than a year after the shock down, bitcoin (BTC) to accelerate the decline period again.

It is shown that the 16:30 on November 26th, GDAX quoted bitcoin dollar price of $3949.36 / month, fell by up to 7.81%, while the bit currency prices within a month cumulative retracement has reached 37.76%, more than in mid December to nearly $20 thousand last year fell to below $4000.

Before that, BCH (the original bitcoin and bitcoin cash bifurcation) and bifurcation caused much attention, and is regarded as the sell-off triggered by.

Institute of 21 century capital believes that not only can promote the bifurcation of bitcoin prices fell, but BTC BCH, a bifurcation event further confirms the consensus to the center of the asset vulnerability.

At the same time, the tragedy of the Commons and the incremental funding factors such as lack of bifurcation events superimposed over the past year many coins, coin copycat innovation emerge in an endless stream caused by the price of the BTC, further to form a pressure.

When confronted with the reality of consensus

Sideways shocks after a few months, bitcoin fell further.

By the end of November 26th before the deadline, the international OKCOIN station, BITSTAMP station, bit children overseas, Bitfinex and many other platforms bitcoin prices are less than $4000.

While bitcoin prices plummeted, the previous bitcoin suffered from the original bifurcation BCH formed again bifurcation, regarded as the drop fuse – on November 16th, BCH ushered in the update process of hard branch, and split the support for the Australian scientist Craig Wright supported BCH SV and bit CEO, Wu Jihan et al BCH ABC two for each token, the token supporters chose their own way, because BCH ABC supporters have more computing power, so that the continuation of the name of the BCH.

Institute of twenty-first Century capital believes that the bifurcation only confined to the development of the route tokens, and will not bring threat to the nature of bitcoin prices in August last year, for example, in the original bitcoin split into a moment of BTC and BCH, two new tokens total value is substantially more than the original bitcoin previous value, then BTC is from $2500 $10 thousand rise directly to a high position.

However, then the bifurcation of BCH, which means that the original idea of this reserve bitcoin point of cash settlement system “and in the industry support sub fork, still cannot avoid to burst the outcome of consensus.

In the hard branch, Craig Wright, Wu Jihan et al BCH against the dominant development route, insist on lock bitcoin bottom protocol and block capacity expansion to 128MB, and Wu Jihan insists expansion program is established, when the irreconcilable differences between the parties, the end can only enter the “force out of power” hard fork trap.

However, the formation of bitcoin price tokens, it is relying on its uniqueness, the total amount of gold is constant, the property that can not be tampered with, infinitely divisible, there can be a bifurcation event, so many market participants covet and obtain the potential benefits or defend the vested interests, and on the other hand, the increase in number of branches, let more recognizable bitcoin fuzzy, only the influence of the IP value, more damage to the stability of asset market expectations of tokens.

In fact, the bad after intensive bifurcation are reflected. At the end of last year, BTC ABTC, SBTC further bifurcation and LBTC not less than 9 sliver chain, and dense after bifurcation in BTC after touching $20 thousand directly into the fall, nearly a year of the bear market, and now dropped to less than $4000. (see the newspaper in December 27, 2017 12 annual edition “bitcoin” roller coaster “of the year soared 13 times:” dense bifurcate “dark brew” risk)

The reason is that bitcoin token essentially belongs to the public chain, although the attempt by consensus authentication mechanism can not be tampered with to break the center of money; but it is still facing a bane – bitcoin’s IP value belongs to the fuzzy property of “stateless zone”, who has the right to adjust the rule definition and explanation, and that their ideas or interests argue based on often will lead to market tokens of the “tragedy of the commons”.

So we can foresee that the BCH bifurcation is not the first, nor the last time, either BTC or BCH after the bifurcation, the future will face more challenges in fighting within the party.

County Public chain “”

The token bucket bifurcation is not only confined to the mainstream currency, accompanied by a large number of ICO, all kinds of coins, coin copycat innovation emerge in an endless stream is more reason for this market attention diversion.

Only in the HQZ market and non market two small tokens station platform data, currently offer kinds of tokens up to 1656 and 2481 respectively, comparable to the stock exchange amount; while in 2 years ago, the market only bitcoin, Wright coins, etc. only a few generations of etheric Fang coins.

Institute of twenty-first Century capital believes that relying on the block chain technology with low technical threshold issued tokens, and the wealth effect created by ICO, leading to a rapid increase in the types of tokens. A IPO volume effect on the secondary market expected, the stock of capital investment in the mainstream of tokens will be further to the new token shunt.

We believe that the increase in the branching and innovation of token coins, tokens will constitute a restriction on the market price in a long time in the future. On the one hand, the formation of the international regulatory framework token unified and effective, no force can stop or effective supervision of ICO bifurcation and chaos tokens, such as last year, regulators closed domestic exchange tokens, a lot of capital in Singapore, Uganda and other countries on the stove.

On the other hand, in the era of universal application scenarios blockchain, bitcoin token pricing still depends on its popularity and social expectations for the block chain technology, so we can see, even if the block chain technology square, COS Ethernet token extensibility and easy fast online pay far higher than the rate of bitcoin but, the price of its assets is still highly correlated with bitcoin.

But with the bitcoin dissipation of rent, reduce the incremental funding and fell weakened to bring the wealth effect, will affect the tokens in a long time market boom.

As a result of the push grace, when the “big chain” split into many “small”, its ability against the manipulation of 51% count more than force also declined, and the security of the token rules constitute a threat, it also destroyed bitcoin has previously and precious metal assets similar hedging function.

In fact, the token property constitute a paradox: if the chain in the public building will bring many tokens, irreconcilable competition, which led to the tragedy of the commons; but if the tokens like sovereign currency has a central feature, contrary to the investors as a treasure concept cannot be manipulated with the.

In summary we believe that the overall downward trend in the market price of the tokens will be difficult to reverse, but since 2017 bitcoin and other tokens of this round of public concern and speculation or will be officially come to an end.

(source: the 21 century economic report)

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