To be frank, I still don’t understand how to mine Bitcoin, why mining is costly, and why the amount of Bitcoin is limited. I have read lots of articles about Bitcoin or other cryptocurrencies and one of my friends has set up his own business on block chain. He is enthusiasm about the Bitcoin and block chain.
From the traditional economic aspect, I want to point out that because thenature of deflation and the nature of decentralization determine that it cannotbecome a real currency.
Bitcoin has a ceiling of 21 million, which is a fatal flaw. This alsodetermines that it cannot be circulated as a currency and is also an excellentspeculative tool. First, money is not used as a general equivalent. Its role isto measure social wealth. It is inferred that the existence meaning of currencyis not to measure the "labor value" in a certain economics. Simplyput, the purpose of currency is not to maintain its own currency stability, butto measure the financial situation of society. If human beings continue to createwealth, human social wealth continues to grow, and human labor has meaning,then the significance of currency lies in the constant devaluation andcontinuous increase in the number of individuals, in order to meet the actualsituation of social wealth growth.
Then is the liberalization(denationalization) of currency issuance. In reality, how to make the world'scentral bank issuing currency into free circulation should be the mostdifficult step.
What is the future of Bitcoin and other virtual currencies? When adispute occurs, is the Bitcoin service provider protecting the seller or thebuyer? Satoshi Nakamoto provided a set of answers, but up to now, the originaldesign has been unable to meet the current needs. Difficult to adjust, forexample, the pursuit of privacy will accept more complex systems and highercosts, but mainstream consumers and businesses will require simple technology,low cost.
Other virtual currencies are also looking at this area. Forexample, Litecoin's confirmation of transaction speed is four times faster thanBitcoin and is suitable for retail use and other time-sensitive transactions.
Whether or not Bitcoin expands with the expectations of its vast majority of believers, it provides researchers with an extraordinary laboratory and offers businesses and consumers an attractive exchange.
So buying into Bitcoin has, at least so far, been a goodinvestment. But does that make the experiment a success? Um, no. What we wantfrom a monetary system isn’t to make people holding money rich; we want it tofacilitate transactions and make the economy as a whole rich. And that’s not atall what is happening in Bitcoin.——Paul Robin Krugman
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