Can Bitcoin replace the traditional Coin?

Months ago, we have heard about the WannaCry Ransomware Attack. These hackers threatened those people who were hacked. The victims must pay some bitcoin to the hackers.

However, do you know what the bitcoin is?

If your major or job doesn’t belong to Network Technology area, you may say “well, I hear about bitcoin here and there, but I never know what it is.”

Today, I’m going to share some information about Bitcoin.

What is Bitcoin?

Bitcoin is a worldwide cryptocurrency and digital payment system invented

by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto.

It was released as open-source software in 2009.

* Someone proved that this old man is “Satoshi Nakamoto”. He is a Math professor from Kyoto University, in Japan. His name is ShinichiMochizuki.

This concept is from Wikipedia. To think simple, the Bitcoin system is a very complicated system of Math. There are about 21,000,000 Math questions in the system. Everyone can solve the questions. If you solve out one of the questions, you can get some bitcoins.

But, one bitcoin is only one code. Why can it be used as the coin?

Actually, the coin, or we say, currency, is made by countries. The America makes dollars and the China makes RNB. The currency is only some colorful paper. Why do we accept it? It’s because there are the credence and law from Countries, to make people use their motherland’s money. In other words, everyone accepts the currency, some pieces of paper, to pay their bills, buy food or to do other things.

So, if everyone accepts the bitcoin as one kind of currency, it will be useful.

Benefits and Disadvantages of Bitcoin

We must know, every coin has two pieces. Bitcoin has not only benefits, but also disadvantages.

Benefits

1. Completely decentralized, no issuer, it is impossible to manipulate the number of issued. Its distribution and circulation, through the open source P2P algorithm to achieve.
2. Anonymous, tax free, exempt.
3. Robustness. Bitcoins are completely dependent on the P2P network, no distribution center, so the outside organizations can’t close it. Bitcoin prices may fluctuate, crash, multinational government may announce it illegal, but Bitcoin and Bitcoin huge P2P network will not disappear.
4. Borderless, cross border. Transnational remittances will go through layers of foreign exchange control agencies, and transaction records will be recorded in multiple cases. But if the bit currency transactions, enter the digital address directly, click the mouse, wait for P2P network to confirm the transaction, a lot of money on the past. Do not go through any regulatory agencies, and will not leave any cross-border transactions.
5. Cottage is difficult to survive. As the bitmap algorithm is completely open source, who can download to the source code, modify some parameters, re-compile, you can create a new P2P currency. But these cottage currency is very fragile, vulnerable to 51% attack. Any individual or organization, as long as the control of a p2p currency network 51% of the computing power, you can manipulate the transaction, currency, which will P2P currency constitute a devastating blow. A lot of cottage, is dead in this link. While the Bitcoin network is already robust enough to control the 51% of the computing power of the Bitcoin network, and the amount of cpu / gpu needed will be an astronomical number.

* From June 2017, Bitcoin price becomes higher. 1 Bitcoin equals 3488.31 US dollars now.

Disadvantages

1. Trading platform vulnerability. Bitcoin network is very robust, but the bit currency trading platform is very fragile. The trading platform is usually a website, and the site will be hacked, or subject to the closure of the competent authorities.
2. Transaction confirmation time is long. When the first coin wallet is installed, it will consume a lot of time to download the historical transaction data block. The bit currency transactions, in order to confirm the accuracy of the data, will consume some time, and P2P network to interact, get the whole network to confirm, the transaction was completed.
3. Price fluctuates greatly. As a large number of speculators involved, resulting in the price of special currency exchange cash, such as roller coaster general ups and downs. Making Bitcoins more suitable for speculation than an anonymous deal.
4. The public does not understand the principles, as well as the traditional financial practitioners boycott. Active netizens understand the principle of P2P network, know that Bitcoin can’t maneuver and control. But the public does not understand that many people can’t even distinguish between the Bitcoins and Q coins (some virtual coins from a Chinese Company — Tencent) the difference. “No issuer” is the advantage of Bitcoin, but in the traditional financial practitioners view, “no issuer” currency worthless.

Can Bitcoin replace the traditional coin?

After knowing the overview of Bitcoin, we may ask Can Bitcoin replace the traditional coin?

The answer is no.

Not to mention that it is impossible to obtain sovereign protection of the heterogeneous, which itself has a fatal flaw, such as payment efficiency problems and even become a Ponzi scheme, the competition between the miners and monopolies also threaten the market order of Bitcoin.

The investment boom of the bitcoin makes the ICO (Initial Coin Offering) in the chain area become unusually hot, and more and more companies aiming at misappropriating are involved in the bubble, In addition to the platform with money, there are a lot of MLM organizations mixed with investors to fraud.

As the gold standard, which is back to the 21st century and beyond the human society is not realistic. Hoping that a class of “currency” can become a new super-sovereign world currency, at best is a heterogeneous dream.

The Future of Bitcoin

Although the Bitcoin can’t replace the traditional coin, there are some countries allow the Bitcoin come into the currency market recent years.

At the end of June 2013, the German parliament decided to hold Bitcoins more than one year will be tax-free, the Bitcoins by the German Ministry of Finance as a “unit”, which means that Bitcoin in Germany has been regarded as a legal currency, and can be used to pay taxes and engage in trade activities.

In August 2013, the US District Court Judge Amos-Mazenz in the United States ruled in a case of a counterweight currency hedge fund, which is a currency that should be included in the regulatory limits of financial regulations Inside.

In China, the “Renminbi Management Regulations” provides for the prohibition of the production and sale of tokens. As the definition of tokens has no clear judicial interpretation, if the bitcoin is included in the “tokens”, the bit currency in China’s legal prospects facing uncertainty.

In short, the future of Bitcoin is not clear. We can wait and see.

Source: http://nhprice.com/can-bitcoin-replace-the-traditional-coin.html