I can't predict what the future of cryptocurrencies will be, but I can be sure that the development of cryptocurrencies will not be able to get rid of government intervention in a short period of time. I can only say that "decentralization" and "unregulated freedom of wealth" are two beautiful stories.
First, the "decentralized" environment is not mature
One of the highlights of cryptocurrency is “decentralization”. The rudiment of decentralized thinking has long appeared. The final appearance of the development of “Marx's communism” is to achieve equality for all and resource sharing. There is no capitalism and proletism. Historically in the early Chinese Qin empire, the idea "Great World" by philosopher Laozi, has based on the decentralization theory. But this is only an idealized state. The results of decentralization and communism development are: not self-centered. “Decentralization” is a great idea, but it is the least easy to achieve. But compared to "communism," it is more real and realistic. People are selfish, this is nature, but when the material foundation develops to a rich stage, this lust disappears.
The "decentralization" is based on the recognition of human desires, the pursuit of fairness, and the removal of the center. The technology generated by the decentralization concept is the blockchain. There are many applications of blockchain technology, which is what we often call “1.0, 2.0, 3.0”. Many people know that the word "blockchain" is through bitcoin. Even the entire cryptocurrency, indeed in the cryptocurrency block, the application of blockchain technology is the most mature, but the existence of cryptocurrency is also highly controversial. The cryptocurrency based on the concept of “decentralization” has been intervened by local institutions and organizations in many countries and regions. This is a very funny phenomenon, that is, a “decentralized business activity”, which is regulated by a “centralized organization”.
So now the development of cryptocurrency has become geographically deformed, such as:
In Japan, the United States and other places, the supervision of government agencies and the attitude towards cryptocurrency are relatively friendly. Therefore, industries related to cryptocurrency transactions, such as cryptocurrency exchanges, are developing better and have a larger living space.
But in China, the government does not recognize cryptocurrencies, so cryptocurrency transactions are difficult to carry out. First of all, China has been working to improve the international status of its legal currency,is RMB, But cryptocurrencies will have an impact on it.. Secondly, the value of cryptocurrency is very unstable. It is only an investment product. want to accept cryptocurrency, it is necessary to bear the risk of price instability. For example, it will cause confusion in the financial market.
China's current international role is different from the past. It is already the second largest economy in the world. Once China's economic and social chaos, it will have a great impact on the world economy. China’s international image has always been calm. So it is not surprising that cryptocurrency transactions are prohibited.
The limitations of cryptocurrency have not been well resolved
Poor stability.
The reason for the initial birth of Bitcoin, it was because the state financial institutions arbitrarily issued additional currency. That is to say, the definition of bitcoin is a currency of circulation. The issuance of other cryptocurrencies is also based on bitcoin, such as bitcoin-cash, but the value of these cryptocurrencies is not stable, so so far, cryptocurrency is still only an investment product. Any investment product is risky, and the cryptocurrency is more risky, from a few cents from the beginning of Bitcoin to a later rise to nearly $20,000, and now it has fallen to around $6,500. Show it out.
The price of legal tender is obviously much more stable. For example, the price of RMB to US dollar is almost unchanged in the short term. As a general equivalent, this is a necessary stability. And some regions and countries do not accept cryptocurrencies because of its instability.
The crisis of trust generated by decentralized transactions.
Why do we recognize the value of the US dollar and the RMB, because these legal tender currencies are based on the national credit endorsement, why do we buy gold and silver, because this is the common value recognition of people, of course, it has also been recognized by the state. However, due to its decentralized nature, cryptocurrency can be used for payment in areas that recognize the value of cryptocurrency, but cannot be used for areas that do not recognize cryptocurrency.
What can I do after solving it? ? ?
Let's make a hypothesis: the value of bitcoin is fixed at $10,000, trade bitcoin cash for btc, 1BCH = $1000... This means that the price of cryptocurrency is stable. Then will someone invest again? I bought a bitcoin for $10,000, and I sold it for another $10,000 for a while, without any profit in the middle, which would waste my time. Someone will invest in it？
And can bitcoin at this time be called cryptocurrency? It can only be said that it is a virtual currency, but virtual currency has long been born, such as the Q coin launched by Tencent, and has an advantage over cryptocurrency.
The cryptocurrency is used as a virtual currency, and all cryptocurrencies have no essential difference except for the channels used (for example, as a game currency or for a medical payment coin).
The cryptocurrency can also be stored as value, just like investing in gold and silver. But we can only say that there is such a possibility. We know that the legal currency is based on the credit endorsement of the national or regional government. The value of gold and silver is almost the consensus of all mankind, but cryptocurrency has no advantage over the former two in terms of credit. "Decentralization" has always been the advantage of cryptocurrency, but I think on the contrary, this thinking is too advanced, people accept it, but in terms of currency operation, our era will not accept it. Just like everyone is eager to share the same material, but no one will unconditionally give money in the pocket to others.
Reflection:
It is very difficult for cryptocurrencies to develop. Various ICO scams need it to deal with it. The government has also Promulgatedout of the ban and constantly pressured it. With modern technology, the improvement of encryption means that it can slowly move closer to the financial industry, but the road to cryptocurrency will be more difficult before it can be recognized by the government. Perhaps, now is the best time for the development of cryptocurrencies, and what kind of development trend will follow, we don't know anyone.
The cryptocurrency does not have a credit endorsement. If people use cryptocurrency to pay and generate economic disputes, who should they look for?
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