Survival and Development

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2 years ago

The growth of virtual currency represented by Bitcoin actually has economic reasons.

One is the living soil of virtual currency. The "decentralized" structure of the public chain is essentially a self-organization that implements self-rules, a common network consensus governance mechanism and an incentive mechanism for issuing virtual currency. Virtual currency is an equivalent and payment tool recognized by participants.

The second is the market demand for virtual currencies. Virtual currency transactions can be anonymous, cross-border, and difficult to control. They can be used in public chain communities as well as gray and black transactions, and may even become tools for illegal capital flow and speculative transactions. There have always been illegal transactions in the global "dark web market" such as drugs, guns, and pornography. The scale is difficult to measure. Bitcoin, etc. has become this kind of "underground" trusted and difficult to control "underground" payment tool.

The technical flaw of virtual currency comes from the "decentralized" public blockchain architecture. Under this architecture, network-wide verification requires ultra-large data synchronization, and the operating capabilities of each node need to be up to standard and balanced. Therefore, whether it is Bitcoin or Ethereum, the issue of transaction efficiency and scale has not yet been resolved.

It seems that virtual currencies will survive and develop. Very few may expand their territory, and most of them can only stay in a corner. In the future, if the underlying blockchain technology that virtual currency relies on can break through the bottleneck of large-scale applications, and if the operating mechanism of virtual currency can solve the problem of value stability, it will be possible to enter the popular transaction and payment scenarios.

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