Why should Bitcoin be issued (why is Bitcoin allowed to exist)

Why issue Bitcoin Why issue Bitcoin? In 2009, the first state government in the United States announced a new bill “Law on Cryptocurrency Transactions and Blockchain Technology”, which aims to enable people to exchange, buy, sell or use value storage means through a digital method called “Distributed Ledger” (DLT) So why issue Bitcoin? Let’s start with the following points to understand: why is Bitcoin issued? Why is Bitcoin issued globally? What is the purpose of Bitcoin? To create a decentralized payment network and provide services to users, many people around the world are seeking to integrate Bitcoin into their systems to improve efficiency Firstly, establish a simple financial protocol to address the unmet needs of existing banking systems and promote the cost of cross-border payments; Secondly, under certain conditions, allowing customers to directly engage in transactions with other institutions to reduce risk. Finally, everyone hopes to become a part of this system. So they need to let all different types of participants work together, and their interests are subject to specific rules, such as legal status, Capital gains tax and other restrictions. If done in this way, it will lead to unnecessary demand for this new economic system, which is one of the goals they want to achieve – creating a secure and trustworthy network to manage their own funds In addition, as there are currently no entities or organizations that can issue CBDCs like central banks, it is difficult to predict whether they will eventually change. And for users who already have a private key, this is a very troublesome thing. Because most individuals do not know how to control them and cannot even guarantee their identity, they cannot control their private keys. On the other hand, although there are currently a large number of assets stored in one place, there are still many different options available. To ensure the security of these assets, Bitcoin must have a smart contract operated by an independent third party supported by central authorities, which has exactly the same functionality and standards to perform this process without the need for external intermediaries. This allows developers to access these services by creating multiple wallets and hosted services, which is much more complex than current levels. The reason why we need to issue Bitcoin and mine Bitcoin is that Bitcoin is a scarce product. The vast majority of resources in the world today come from miners or investors, so all the resources needed to produce Bitcoin are consumed in large quantities. However, despite this, Bitcoin is still in its early stage of development, so more and more Proof of work proof consensus mechanisms will be added over time to achieve more security and performance than traditional computers, while reducing some energy waste, such as electricity At the same time, two main reasons need to be considered: 1. Limited supply; 2. The price fluctuates violently, making it difficult to evaluate its reliability and speed; 3. Huge demand; 4. Technological development bottleneck

Why Bitcoin is allowed to exist

Editor’s note: This article is from Cointelgraph Chinese (ID: Cointelgraph China), authored by JOSEPHYOUNG, and reprinted by Daily Planet with authorization According to the latest report released by encryption research company Chainalysis, “the supply of Bitcoin is limited, and its usage will decrease as time goes by. The study found three key reasons, including regulatory and tax impacts. One of the most important reasons is the potential risk of restrictions on Cryptocurrency exchange

Despite such problems, the Federal government of the United States still took some measures to ban Cryptocurrency in January 2019. This will enable traders, investors, and other participants to gain ownership of the assets they hold. We have seen a continuous decrease in the circulation of Bitcoin, and it may be subject to more scrutiny. However, if necessary, this situation is changing – which means there is no need to close Bitcoin transactions. In addition, to address this issue, the Federal Reserve has been implementing its digital dollar plan – a news that has been confirmed to be ‘very important’. According to reports, by the end of 2020, the central bank may have to issue its own CBDC and launch its own encrypted version to meet public demand, and it is currently unclear whether other countries will do the same

Therefore, the policy of allowing BTC as Fiat money is obviously a positive factor. According to CoinMarketCap data, the market value of Bitcoin for the week ended May 31 was $2.89 trillion, which is comparable to the level in 2017; Only about 2% growth compared to the first quarter of 2018 Since early March, major global institutions have started purchasing BTC as a payment method, which is a catalyst for many banking giants to enter emerging markets. Due to the recent drop in Bitcoin prices leading to increased market volatility, Bitcoin is facing significant selling pressure. However, for those who want to invest in Bitcoin, Bitcoin may be another option For example, Galaxy Digital, the parent company of Grayscale, announced at the end of April this year that its total assets under management had exceeded $1 billion

The founder and CEO of Grayscale, Michael Sonnenschein, previously stated, “In the long run, I don’t think Bitcoin will completely fail or collapse,” he added. I’m not sure how many people will have anything in the next decade, but I do believe that people will always have Bitcoin… so you should remember that only a few large fintech companies in the world will see it as a store of value at some point.