Are Monetary Rewards Effective?

The concept of Bitcoin was originally proposed by Satoshi Nakamoto on November 1, 2008, and was officially born on January 3, 2009 ^[1] . Design and release open source software and construct P2P network based on Satoshi Nakamoto's ideas. Bitcoin is a virtual encrypted digital currency in the form of P2P. Peer-to-peer transmission means a decentralized payment system.

The global financial crisis broke out in 2008. On November 1, 2008, a person claiming to be Satoshi Nakamoto published a Bitcoin white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" on the P2P foundation website.

From the nature of Bitcoin, than

Decentralization : Bitcoin is the first distributed virtual currency. The entire network is composed of users and there is no central bank. Decentralization is the guarantee of Bitcoin's security and freedom.

Circulation worldwide: Bitcoin can be managed on any computer connected to the Internet. No matter where you are, anyone can mine, buy, sell or receive Bitcoin.

Exclusive ownership: Private keys are required to manipulate Bitcoin, and it can be stored in isolation on any storage medium. No one can get it except the user himself.

Low transaction fees: Bitcoin can be remitted for free, but a transaction fee of about 1 bit cent will be charged for each transaction in the end to ensure faster transaction execution.

No hidden costs: As a payment method from A to B, Bitcoin has no cumbersome quotas and procedures. Knowing the counterparty's bitcoin address allows payment.

Cross-platform mining: Users can explore the computing capabilities of different hardware on many platforms.

advantage

1. Completely decentralized, without the issuer, it is impossible to manipulate the number of releases. Its distribution and circulation are achieved through the open source p2p algorithm.

2. Anonymous, tax-free, and regulatory-free.

3. Robustness. Bitcoin is completely dependent on the p2p network and has no distribution center, so it cannot be closed externally. The price of Bitcoin may fluctuate and collapse. Many governments may declare it illegal, but Bitcoin and Bitcoin s huge p2p network will not disappear.

4. Borderless and cross-border. Cross-border remittances will go through layers of foreign exchange control agencies, and transaction records will be recorded by multiple parties. But if you are trading with Bitcoin, enter the digital address directly, click the mouse, and wait for the p2p network to confirm the transaction, and a lot of funds will pass. No cross-border transaction record will be left without going through any regulatory agency.

5. The cottage is difficult to survive. Since the Bitcoin algorithm is completely open source, anyone can download the source code, modify some parameters, and recompile to create a new p2p currency. But these cottage currencies are fragile and vulnerable to 51% attacks. Any individual or organization, as long as it controls 51% of the computing power of a p2p currency network, can manipulate transactions and currency values at will, which will pose a devastating blow to p2p currency. Many altcoins died at this stage. The Bitcoin network is already robust enough. To control 51% of the computing power of the Bitcoin network, the number of CPUs / GPUs required will be an astronomical figure.

Disadvantage

1. The vulnerability of the trading platform. The Bitcoin network is robust, but the Bitcoin trading platform is fragile. The trading platform is usually a website, and the website may be hacked or shut down by the competent authority.

2. The transaction confirmation takes a long time. When a Bitcoin wallet is first installed, it consumes a lot of time to download historical transaction data blocks. In Bitcoin transactions, in order to confirm the accuracy of the data, it will take some time to interact with the p2p network, and the transaction will not be completed until it is confirmed by the entire network.

3. Prices fluctuate greatly. Due to the involvement of a large number of speculators, the price of bitcoin for cash has fluctuated like a roller coaster. Makes Bitcoin more suitable for speculation rather than anonymous transactions.

4. The public does not understand the principles, and the resistance of traditional financial practitioners. Active netizens understand the principle of the p2p network and know that Bitcoin cannot be manipulated and controlled artificially. But the public does not understand that many people can not even distinguish the difference between Bitcoin and Q coins. "No issuer" is the advantage of Bitcoin, but from the perspective of traditional financial practitioners, "no issuer" currency is worthless.

Germany: After the German parliament decided at the end of June 2013 to hold bitcoin for more than one year to be tax-exempt, bitcoin was identified as the "accounting unit" by the German Ministry of Finance, which means that bitcoin has been considered a legal currency in Germany, Can be used to pay taxes and engage in trade activities. ^[13]

In August 2014,

A reporter from The Coinsman website in the United States came to the Northeast to inspect "Bitcoin Mining" and everything stunned him. The scene was like the sound of angry bumblebees flapping their wings. Despite the air conditioning, the indoor temperature reached 40 degrees, and the strong wind formed by the wind turbines made it impossible to move forward. Behind these wind turbines, it was uncountable Mining machine. The monthly electricity bill is 400,000 yuan. The workers work in three shifts 24 hours a day, 2,500 machines, and 230 billion hash calculations per second.

People's Network Review

Bitcoin development has entered a "fuzzy period": the regulators in most countries are both alert and indifferent. For example, the Bank of England recently released a report that when digital currencies are fully accepted by the market, it will threaten the stability of the British financial system. ^[16]