By Ren Zeping, a column writer of the Sina Finance Opinion Leader Column, Gan Yuan, Shi Lingling, Xie Jiaqi　

　　Introduction

　　The highest leader General Secretary pointed out that the application of blockchain technology has extended to many fields such as digital finance, the Internet of Things, intelligent manufacturing, supply chain management, and digital asset trading. The integrated application of blockchain technology plays an important role in new technological innovation and industrial transformation.

　　Bitcoin has pioneering the blockchain technology, pushing it into the public eye. In the future, as an important breakthrough in independent innovation of core technologies, blockchain will greatly promote the application of lottery and How to find it and other fields. As of January 2, 2021, the closing price of Bitcoin was $29,382.40 per coin, with a total circulation of 18,587,962.5 coins, and a market value of $544.7 billion.

　　Why has Bitcoin developed so rapidly? Does it have long-term investment value? Is it digital gold, a monetary revolution, or a speculative bubble? Following the ‘Blockchain Research Report’ and the ‘Libra Research Report,’ this article will introduce Bitcoin’s technical foundation, historical development, market status, and regulatory policies at home and abroad in a textbook-like manner, analyzing the reasons for Bitcoin’s surge, its investment value, and risks.

　　Abstract

　　Bitcoin is a typical representative of Online casino and How to find it with decentralization, limited total supply, secure transactions, and public information, marking the characteristics of an advanced era. Bitcoin was born in the 2008 financial crisis, stemming from concerns about centralized banks and distrust of inflationary currencies. With the influx of speculative capital, relaxed regulations, and recognition as lottery and How to find it and a means of payment by various countries, Bitcoin surged to $19,187.78 per coin in 2017. Over the past 10 plus years, it has experienced extreme volatility, leading to the creation of a variety of forked coins and山寨coins.

　　Speculative demand is the intrinsic reason for the rapid rise in Bitcoin prices, including transactions such as disguised exchange and ICO financing. The relatively lenient regulatory attitude of developed economies such as the United States is an important external factor for the continuous expansion of the asset bubble of Bitcoin. According to the data of the Global Bitcoin Development Report, China’s Bitcoin trading accounts for 80% of the global Bitcoin trading volume. User survey shows that the age of Bitcoin investors is mostly 30-39 years old, and the proportion of investors with high school and above education is over 80%. IT professionals account for about 35.45% of the total number of users. 80.77% of Bitcoin investors aim for short-term profits, and only 13.81% of users choose to hold it for the long term.

　　Comparing the four characteristics of physical currency, Bitcoin cannot match gold and other physical currencies in terms of general acceptance and value stability, but it can meet the uniform divisibility of value and has the advantage of being portable and easy to carry, which is difficult to compare with physical currency. The greatest obstacle to Bitcoin replacing credit currency is its decentralized nature; Bitcoin without a credit base cannot well exercise the functions of money. Drawing on the relevant technology of Bitcoin, the primary goal of researching and developing the central bank’s lottery and How to find it is to supplement and replace traditional physical currency.

　　While acknowledging the technological innovation of Bitcoin, attention should be paid to the risks generated by its own operational mechanism. For new things, we should observe and learn more, while preventing risks. In order to ensure the safety of Chinese investors’ funds and maintain the stability of the financial market, the Chinese government has gradually strengthened the supervision of Bitcoin trading activities, and it is expected that the development of private encrypted currencies will be restricted. At the same time, the People’s Bank of China is strengthening the research and development of lottery and How to find it. Bitcoin and other Online casino and How to find it have been incorporated into the regulatory systems of various countries. While recognizing the inherent risks of Online casino and How to find it, we cannot deny the innovativeness and development potential of blockchain technology. The research and development of the central bank’s lottery and How to find it is in line with the needs of the times, guaranteed by the national credit, adhering to the principle of centralized management, and maintaining national monetary sovereignty while providing efficient services.

　　Risk Alert: Excessive regulation leads to the inability to trade Bitcoin; Network hackers bring a large number of risk events; The drastic fluctuations in the price of Bitcoin lead to difficulties in stabilizing its currency functions

　　Main Text

　　I. Introduction to the Background

　　1. Online Casino and How to Find It: A Product of the Popularization of the Internet

　　Online Casino and How to Find It refers to the non-tangible currency widely existing in the Internet world, which is different from the non-tangible currency in reality that is mediated by physical entities. Its usual form is a string of numbers recorded in a network account. With the popularity of personal computers and the development of Internet technology, people’s online activities have shown explosive growth. As a type of transaction medium in the network world, Online Casino and How to Find It is widely circulated in the fields of e-commerce and Internet finance, bringing convenient transaction and payment experiences to network users.

　　According to the different issuance methods of Online Casino and How to Find It, it can be divided into two major categories: one is the type with Tencent’s QQ coins, Shanda’s game points, various forum coins, and game coins as representatives, which are centralized legal Online Casino and How to Find It with an issuing center. Like credit currency, they are often credit currency, and their issuance is decided by centralized institutions. The other type is the decentralized Online Casino and How to Find It represented by Bitcoin and other lottery and How to Find It, which, just like the limited supply of precious metals in real life, the number of currency issuance of metal-like Online Casino and How to Find It is often strictly limited by algorithms. The main differences between them are as follows:

　　2. Bitcoin: Representative of Decentralized Lottery and How to Find It

　　The concept of Bitcoin was first proposed by Satoshi Nakamoto in 2009, which is a P2P lottery and How to find it, and its production and trading rely on the open-source software designed and released by Satoshi Nakamoto and the P2P network built on it. As a representative of decentralized Online casino and How to find it, Bitcoin has developed rapidly in recent years and has become the most influential Online casino and How to find it in the global market.

　　Bitcoin has created the blockchain technology, which is a completely new distributed infrastructure and computing paradigm that uses block chain data structure to verify and store data, uses distributed node consensus algorithm to generate and update data, ensures the security of data transmission and access through cryptography, and programs and operates data through smart contracts composed of automated script code.

　　We can simply define Bitcoin as a digital that is generated by computers, has a strictly limited total amount, has high transaction security, is difficult to lose or damage data, and has distributed storage of historical transaction records in the Bitcoin network. Unlike the credit currency issued by the central government, the value of Bitcoin depends on people’s trust in the Bitcoin system algorithm rather than the government. The transaction of Bitcoin is based on a point-to-point electronic cash system realized by technology, which allows the two parties to make online payments directly, without the clearing and settlement process of any intermediate authority, which improves the efficiency of transactions and settlements and saves the cost of cross-border transactions.

　　Bitcoin mainly has four characteristics: the system sets the issuance method, there is no central issuance institution; the annual issuance amount is halved every four years, and the total amount is finite; the balance information is difficult to be tampered with, the transaction security is guaranteed, and the overall stability of the system is strong; the historical transaction records are public.

　　3. The production method of Bitcoin

　　The production of Bitcoin has the characteristics of output determined by computing power and smooth income through cooperation. The production process of Bitcoin is to find a random number through a large number of calculations, to make a value in a block meet the system requirements through a specific function, so that a new block is generated, and the user who successfully calculates the random number that meets the requirements receives the system reward. In order to increase the probability of success, participants try to expand their share of the total computing power in the network by improving the performance of their mining chips and expanding the scale of their mining equipment.

　　The mining pool model has gradually become the mainstream of mining. Assuming 1000 people participate in mining and 50 bitcoins are given each time, the expected time for a single miner to successfully mine is 1000 times 10 minutes, that is, the expected return is to obtain 50 bitcoins in about 7 days, but the actual time may be longer or shorter, and the miner’s income fluctuation is very large. If these 1000 participants unite to form a ‘mining pool’, all the mining income is evenly distributed among all participants, and the actual income of each miner will be smoothed to 0.05 bitcoins every 10 minutes, and the stability of income will be greatly improved.

　　Investors can either connect their own mining equipment to a mining pool to participate in calculations or directly use funds to rent mining pool computing power to share the mining pool’s revenue. Currently, the concentration of Bitcoin mining pools globally is high, with the top ten mining pools accounting for 80% of the computing power. In China, some well-known Bitcoin commercial mining pools include F2Pool, BTCCPool, AntPool, BWPool, etc., which have strong competitive advantages globally. Mining farms consume a huge amount of electricity and are generally located in areas with abundant electricity and low electricity prices.

　　The concentration of Bitcoin trading markets is very high. In the overseas market, mainstream exchanges occupy most of the market share, while new exchanges gain customers through differentiated positioning. In the domestic market, before 2017, Bitcoin trading platforms showed a trilateral situation with Huobi, OKcoin, and BTCChina. In September 2017, the central bank jointly issued the ‘Notice on Preventing Risks of Token Issuance and Financing’ with seven ministries and commissions, requiring all types of ICOs to immediately stop, and major trading platforms successively stopped operations.

　　4. The winding development path of Bitcoin

　　For 10 years since its inception, Bitcoin has gone from a playful game among programmers to a digital asset that has captured the world’s attention, constantly facing skepticism. Over these 10 years, the value of Bitcoin has experienced a dramatic increase. As of October 25, 2019, the total number of Bitcoin mined reached 17.845 million, the total number of blocks reached 60.09 million, the price reached 8675.61 US dollars, and the total market value exceeded 154.8 billion US dollars, becoming an eye-catching part of global asset allocation. As a controversial new asset, Bitcoin is influenced by macro conditions such as international economy, monetary policy, and foreign exchange policy, and is also closely related to factors such as platform regulation, grey industry demand, and the development of blockchain technology. The development process of Bitcoin can be summarized into the following four stages.

　　Phase 1: October 2008 – June 2011, the rise of a new thing

　　Bitcoin was born in the 2008 financial crisis, stemming from concerns about centralized banks and distrust of inflationary currencies. In October 2009, the first published exchange rate for Bitcoin was 1 US dollar for 1309.03 Bitcoin, calculated based on the electricity consumed to produce one Bitcoin. In May 2010, Bitcoin was first granted the payment means attribute of ‘currency’: a programmer in Florida used 10,000 Bitcoin to exchange for a $25 pizza voucher, thus giving birth to Bitcoin’s first fair value: 0.25 cents/Bitcoin. In the same year, in July, the message released by the Bitcoin client was mentioned by the famous news website Slashdot, bringing a large number of new users to Bitcoin, and the price of Bitcoin rose to 0.08 US dollars in the next 5 days. With the increasing attention of public opinion such as Time Weekly and Forbes, as well as the increasing types of currency that can be exchanged for Bitcoin, its price has soared.

　　Stage 2: The Burst of Two Bubbles from June 2011 to December 2013

　　On June 19, 2011, the MT.Gox website, which carried more than 70% of Bitcoin transactions, was hacked, causing the data of 60,000 users to be leaked, some hackers obtained the login rights of the website administrators, sold a large number of fake bitcoins, and for a time, the price of Bitcoin fell from $17.51 to $0.01. In the following six months, multiple platforms were hacked, and the Bitconinica platform was permanently closed after being attacked twice. These disasters made Bitcoin trading platforms and Bitcoin investors fully aware of the security risks brought by hackers.

　　After the恶性事件, 2012 became a year of market confidence recovery for Bitcoin. During this year, the first Bitcoin magazine was born, the first credit default swap transaction specifically for Bitcoin occurred, and merchants and service providers began to accept Bitcoin payments. The price of Bitcoin returned to $13.41 at the end of 2012. In 2013, with the market warming up, the influx of a large number of Chinese investors, and fluctuations caused by short-term events, the price of Bitcoin rose to the $100 level in April and remained within a range of $60 to $140 until October.

　　On December 5, 2013, the central bank issued an announcement, prohibiting Chinese banks and payment institutions from directly or indirectly participating in the exchange transactions of Bitcoin. This ban applied only to banks owned by the government and payment processing recognized by the government, while ordinary Chinese citizens were still free to trade Bitcoin as a commodity. On December 18, 2013, the price of Bitcoin in China fell to 2011 yuan (about 330 USD). The bursting of this bubble reflected the market risk caused by the differences in regulatory attitudes towards Bitcoin.

　　Stage 3: After the Weak Downward Trend from March 2014 to November 2016, there was a rebound

　　From 2014 to 2016, the price of Bitcoin generally showed an ‘U’ shape. During these three years, the once popular MT.Gox website failed to withstand hacker attacks and went bankrupt; more and more enterprises accepted Bitcoin payments; a group of senior investors such as Mark Andreessen, Yang Zhiyuan, and Li Ka-shing emerged in the Bitcoin market, and many investment institutions such as Sequoia Capital, Lightspeed Venture Partners, and SoftBank also laid out in the Bitcoin industry.

　　Stage 4: The Repeated Illusion After the 2017-2018疯狂牛市

　　At this stage, the influx of a large number of speculators and institutional investors, along with the market’s improved acceptance and technological upgrades, fueled the surge in Bitcoin’s bull market. However, the hot market for Bitcoin did not last long, and after reaching its peak, the price fell sharply, leaving speculators who entered at high levels with no profit to show. The controversy over Bitcoin also intensified.

　　第五阶段：2018-2020比特币市场的修复之年

　　全球市场出现了新一波追逐风险的反弹趋势，带给比特币以及其他被视为追逐风险的数字资产一轮资金流入。区块链技术的大力发展与政策支持，也为比特币行情提供了乐观环境。

　　5、 乱象初现：分叉币和山寨币

　　比特币的交易者都使用一套统一的规则（数据结构），这是保证比特币交易和流通的关键，而比特币钱包则是通过识别区块上的交易记录来确定每一笔交易的有效性。那么比特币为什么会出现分叉呢？

　　比特币的区块大小限制使得挖矿收益降低，挖矿成本居高不下。为了防止比特币网络的超载风险并鼓励全网算力参与挖矿，中本聪最初将比特币的区块大小限制为1M。但是随着比特币的接受程度提高，挖矿和交易需求的提升，1M的区块大小限制使得网络容易发生拥堵。全网算力的提升造成比特币的挖矿难度和成本增大，矿工的收益也受制于挖矿难度增加而减少。根据BTC公布数据，截止2021年1月2日，比特币全网周平均算力为130.36EH/s，而2018年10月19日数据仅为51.41EH/s，挖矿难度也迅速提高，从去年同期的7.18T达到目前的13.69T。

　　比特币集中于少数利益群体，新进者寻求新的参与方式。比特币诞生的10年时间中，目前约有1784万比特币被开采出来，而大部分的比特币都集中在比特币的开发团队和少数大矿场主手中，因此新进的Online casino and How to find it 交易者在寻找有升值潜力的虚拟币种。

　　在这样的背景下，目前市场上提出了两种主流的升级改进策略：硬分叉和软分叉。硬分叉简单的来讲就是挖矿过程中在区块链上形成了新的节点，由于矿工的挖矿行为相对独立，部分算力可能会在新的节点上继续挖矿而形成分叉的一条新的规范。新规范往往会发布出来，只有当多数节点同意后才会正式发布。这时如果旧的节点不接受升级而继续维持原本的区块链，那么新节点产生的区块无法被旧区块识别，这种分歧就造成了硬分叉的发生。而软分叉是一种双向兼容的规范设计，新规范下产生的区块可以被旧的节点识别，而旧节点产生的区块也同样可以被新的节点识别，这样的升级方式并不会产生真正的分叉，适用于对比特币数据结构进行细微修改的情况。

　　The technical upgrade of Bitcoin is already on the horizon, but the improvement plans proposed by the development teams are different, resulting in a variety of fork coins such as BCH, BTG, B2X, BCD, SBTC, BCHC in the market.

　　While Bitcoin is rapidly developing, some development teams have been inspired by the design of Bitcoin and have created a variety of other Online casino and How to find it by improving the algorithm of Bitcoin. Among them, Litecoin (Litecoin) is relatively active. The birth of Litecoin was inspired by Bitcoin, and it has the same technical implementation principles, aiming to improve Bitcoin. Compared with Bitcoin, there are three significant differences: first, the Litecoin network can process a block every 2.5 minutes (instead of 10 minutes), thus providing faster transaction confirmation. Second, the expected output of 84 million Litecoin is four times more than the currency issuance volume of the Bitcoin network. Third, the computational amount of the encryption algorithm used in the proof-of-work algorithm is slightly lower than that of Bitcoin, reducing the difficulty of mining.

　　Similar to the Online casino and How to find it based on Litecoin, it has made some changes to a greater or lesser extent, and technically it is not difficult, but it can cause confusion in the market. Whether it is a fork coin of Bitcoin or a clone coin, these so-called improvements or upgrades have not deviated from the implementation principles of Bitcoin. However, the emergence of these currencies not only diverts the computing power of Bitcoin but also lacks an authoritative institution to regulate the issuance and circulation of these currencies. In a short period of time, hundreds of Online casino and How to find it have emerged, making it difficult to ensure the safety of investors’ funds through regulation.

　　2. Behind the sudden surge of Bitcoin: speculative demand and insufficient regulation

　　Since 2013, Bitcoin trading has been active, with prices showing an explosive upward trend. From the lowest price of 66.34 US dollars per coin in 2013 to the historical highest price of 19,187.78 US dollars per coin, it has appreciated nearly 300 times. What is the reason behind the Bitcoin’s myth of wealth creation? We believe that the reasons for the疯狂 rise in Bitcoin need to be discussed from the aspects of speculative demand and regulation.

　　1. Speculative demand for Bitcoin drives the price up

　　Bitcoin, as a trading asset, has many advantages: convenient account opening, low transaction threshold, low transaction fees, 24-hour trading, and no geographical restrictions. These advantages have led to a rapid increase in the trading volume of Bitcoin, with the daily trading volume rising from a low of 2.86 million US dollars to a high of 21.8 billion US dollars on December 21, 2017.

　　ICO has become a new financing method in the blockchain field. ICO (Initial Coin Offering) refers to the financing through the issuance of encrypted tokens, and quickly dominates the financing of blockchain start-up enterprises. Compared with the IPO financing method, ICO has the characteristics of less regulatory restrictions, fast financing speed, and no cross-border financing legal restrictions. On March 19, 2018, the U.S. House of Representatives passed the

　　2. Insufficient regulation provides a lenient environment for speculation

　　Insufficient regulation is an important external factor that promotes the formation of the Bitcoin price bubble. Due to the significant differences in the development level of financial markets, the strength of central governments, and the degree of conservatism of investors among countries, the regulatory attitudes towards Bitcoin vary from country to country. Currently, only a few countries such as Russia, Iceland, Bolivia, Ecuador, Kyrgyzstan, and Vietnam have adopted a completely strict ban on Bitcoin. Developed economies such as the United States, Germany, Switzerland, and Australia have relatively lenient regulations on Bitcoin, only incorporating it into their own regulatory framework.

　　By comparing the regulatory policies of different countries and regions, it can be seen that countries like the United States and Singapore have relatively lenient regulations on Bitcoin, clearly stating that Bitcoin does not have the status of credit currency but can be invested as a financial asset. China, France, Japan, and the European Union have implemented relatively strict regulatory measures on Bitcoin, recognizing it as not a true currency and not allowing it to circulate and be used as currency in the market. However, no relevant laws and policies have been formulated to protect the interests of investors. We believe that the relatively lenient regulation and the relatively delayed legislation are important external factors for the continuous expansion of the Bitcoin bubble.

　　3. Bitcoin Investment: It is essentially not currency, and investment still needs to be objectively viewed

　　According to the form of currency, we can divide currencies into two major categories: physical currency and credit currency. Physical currency is mainly used as a general equivalent in commodity exchange, with metal currency being the most representative form. In the 1930s, the global economic crisis caused widespread panic and financial chaos, forcing major capitalist countries to先后 abandon the gold standard and silver standard one after another, and the currency with credit guarantees provided by the state was born, known as credit currency.

　　1. Bitcoin and Physical Currency

　　Physical currency is the earliest form of currency produced in the process of commodity exchange, serving as a general form of value representation for commodity transactions, and is based on the intrinsic value of the commodity itself. The commodities that can serve as physical currency have the following characteristics: ① Universally acceptable; ② Value stability; ③ Value divisibility; ④ Portability and ease of carrying. Metal currency is the most representative form of physical currency, among which gold, as a physical currency, still plays a role in economic activities. Next, we will compare the similarities and differences between gold and Bitcoin based on the four characteristics of physical currency, and then discuss the possibility of Bitcoin replacing physical currency.

　　From the perspective of general acceptability, gold has both commodity and currency attributes. Hu Entong (2005) believes that these two attributes play a role simultaneously in the historical development, but the degree of prominence of these two attributes is not the same in different periods. From the perspective of commodity attributes, gold, like other general commodities, plays a role of practical value in real life, such as in jewelry, electronic industries, etc., and the mining of gold also reflects the value of human labor. From the perspective of currency attributes, Wang Suzhen (2014) believes that the essential characteristic of money is general acceptability. Before the collapse of the Bretton Woods system, gold was the most widely accepted currency and was used as a general equivalent to measure the value of other commodities. Even under the current credit currency system, gold remains the value basis of all credit currencies and can be used as a settlement means worldwide. The history of gold is almost as long as that of human history, from the initial fervent worship to becoming a special commodity that plays the role of a medium of exchange, the status of gold in human trading activities is irreplaceable. Under the classical gold standard system, gold was linked to a country’s currency, and the value of each currency was measured by a certain amount of gold. Even after the collapse of the Bretton Woods system, a country’s gold reserves were still used to balance international payments, maintain or affect exchange rates, and play a special role in stabilizing the national economy, controlling inflation, and improving international credit.

　　For Bitcoin, fundamentally speaking, Bitcoin is a product of the development of computer technology. As a sequence of digits recorded on a carrier, it does not possess practical value in daily life. Some opinions hold that the mining process of Bitcoin consumes a lot of electricity, and the electricity consumption can reflect the intrinsic value of Bitcoin, which is a one-sided understanding. The mining of Bitcoin is a reward obtained by computers through solving mathematical problems, which is not a value-creating activity involving human participation, but a mathematical game recognized by developers and participants. Therefore, Bitcoin does not have practical value, and its mining process cannot reflect the value of labor, nor does it have the commodity attributes similar to goldonline casino entrance and Latest. Secondly, from the perspective of currency attributes, the acceptance range of Bitcoin is quite limited. Currently, there are not many enterprises that accept Bitcoin as a means of transaction. It is also affected by the increasingly strict global supervision and the drastic fluctuations in the price of Bitcoin. Major social media platforms have also begun to refuse advertisements for Bitcoin and other Online casinos and How to find it. Twitter (Twitter) issued an advertising ban on March 26, 2018, to prevent potential fraudulent activities that could cause the public to lose a large amount of money. The platform will ban advertisements for Online casino and How to find it ICO and sales. Facebook and Google have also made similar decisions to ban the advertising of Online casino and How to find it. The well-known forum and social networking site Reddit has also announced that it will stop accepting Bitcoin payments.

　　From the perspective of value stability, the price of gold is affected by many factors. The research of Jiang Xianling (2017) indicates that in the long cycle, the cycle of London spot gold prices is opposite to the cycle of economic development; in the medium cycle, it shows characteristics consistent with the cycle of commodities prices; in the short cycle, the price of gold is greatly affected by sudden factors, with investor sentiment and expectations being the main reasons for fluctuations. However, the intrinsic value of gold, as a commodity containing the value of labor time, is long-lasting because there has been no major breakthrough in gold mining technology for many years. Since its inception, the intrinsic value of Bitcoin has been a subject of debate, mainly because Bitcoin itself does not contain the value of labor time and is not linked to any physical assets, which also causes its price to fluctuate abnormally. Taking the COMEX gold price and Bitcoin price from January 30, 2013, to October 25, 2019, as an example, their standard deviations are 104.16 and 3677.84, respectively. The price fluctuation of Bitcoin during the same period is much greater than that of gold, and Bitcoin cannot match gold in terms of value stability.

　　From the perspective of uniform divisibility of value, the smallest unit of Bitcoin is satoshi, one Bitcoin equals one hundred million satoshis, theoretically as evenly divisible as gold in terms of value.

　　From the perspective of portability and ease of carrying, in the context of small transaction volumes in early human society, commercial activities in various countries could be settled in the form of gold coins or gold bars, as gold, compared to other metal currencies, has the characteristics of portability and ease of carrying. This is because gold of the same quality can represent more value. However, with the development of society, gold could not keep up with the rapid growth of transaction volumes and was gradually replaced by substitute money and credit money. In this aspect, Bitcoin has advantages that cannot be compared with physical currencies like gold. The storage and transactions of Bitcoin depend on Bitcoin wallets and the internet environment. By simply connecting their accounts to the network, individuals can achieve global transfers and transactions, making convenience often considered a significant advantage of Bitcoin.

　　2, Bitcoin and Credit Money

　　Credit money is defined by national law as a currency that is强制circulated independently of any precious metal, performing monetary functions, and its intrinsic value is much lower than its monetary value. Currently, the currencies issued by all countries in the world basically belong to credit money. The forms of credit money include coins, cash or paper money, bank deposits, and electronic money.

　　Keynes’ ‘The General Theory of Employment, Interest and Money’ points out that accounting money (money of account) is the currency that represents debt, prices, and general purchasing power, which is an original concept in monetary theory. Chu Junhong’s (2002) research indicates that the essence of money is credit, and the essential law of monetary development is the reduction of transaction costs. Credit money is essentially a form of debt endowed with legal tender status by the state, and its circulation ability is legally enforced, which guarantees the general acceptability of credit money. Generally speaking, credit money has the following characteristics: ① symbol of value; ② debt currency; ③ compulsoriness and legal tender status; ④ the state body can regulate the issuance of credit money.

　　The greatest obstacle to Bitcoin replacing credit money is its decentralized nature. This nature means that Bitcoin lacks an issuing body, and any team with development capabilities can develop new digital currencies, forked currencies, and山寨 currencies theoretically have the same functions as Bitcoin. Then, how we should trade with Online casino and How to find it has become a problem that cannot reach a consensus, because there is currently no law that gives Bitcoin and other Online casino and How to find it the mandatory circulation ability. Lacking the endorsement of a credible country or organization, and not linked to any physical assets, the credit basis of Bitcoin as money does not exist, and it cannot well perform the functions of money. Even when a sovereign state declares Bitcoin illegal, Bitcoin may be worthless.

　　Bitcoin cannot replace credit money, and compared to physical money, Bitcoin is theoretically feasible in terms of uniform divisibility of value, while its huge advantages in portability and ease of carrying are not to be ignored. Therefore, we believe that it is necessary to draw on the relevant technology of Bitcoin. Yao Qian, the director of the Research Institute of Central Bank Digital Currency and How to Find It, also pointed out in his article ‘Technical Considerations of Central Bank Digital Currency and How to Find It’ that the primary starting point for the research and development of central bank digital currencies in our country at this stage is to supplement and replace traditional physical money. However, the essence of Bitcoin is not money, and its investment still needs to be viewed objectively.

　　4. The Future of Bitcoin: Limiting the development of private digital currencies and accelerating the research and development of central bank digital currencies and how to find them

　　1. The risk of Bitcoin: inherent risks generated by its operational mechanism

　　Behind the myth of Bitcoin’s wealth creation lies many potential riskssports betting secrets and The latest method. The design mechanism of Bitcoin leads it to be different from previous currencies, and it has many inherent problems. These include market risk, shallow market issues, storage and transaction risks, operational risks, privacy-related risks, and legal and regulatory risks, among others.

　　Market Risk: Firstly, whether Bitcoin is invested as an asset or used as a medium of exchange, any holder of Bitcoin will face the market risk brought by the fluctuation of Bitcoin prices. Bitcoin, lacking an issuing body, is almost uncontrolled and easily affected by external factors. The lack of a value foundation makes it very difficult to determine the intrinsic value of Bitcoin, and such uncertainty may cause losses to investors. The unstable value may reduce the motivation of investors to hold Bitcoin and make it difficult for merchants to price Bitcoin, which further hinders the expansion of Bitcoin’s circulation range.

　　Storage Risk: Holders of Bitcoin obtained through mining and purchase must store it in various electronic wallets. The security coefficient of the electronic wallet on online platforms is often insufficient, and it is easy to be attacked by hackers, leading to the theft of Bitcoin. Offline wallets also have the hidden dangers of loss or damage. If the computer is damaged without backup, it is also possible to permanently lose Bitcoin.

　　Transaction Risk: The irreversibility of Bitcoin payments also increases transaction risks. If Bitcoin is sent due to a mistake or fraud, the Bitcoin system does not have an built-in mechanism to solve this problemonline casino plan and The latest entrance. Although the buyer and seller can voluntarily agree to correct the error, there is no mechanism in the Bitcoin protocol that can forcibly recover the funds. The irreversibility makes Bitcoin at a disadvantage in the competition of transaction methods: under all other conditions, consumers should tend to use a payment system that can avoid erroneous payments.

　　Privacy-related Risk: Bitcoin also brings potential risks to the privacy of investors. Bitcoin transactions are actually a non-real-name system, and the transaction information of each account is completely public, but the actual holder of the account is unknown. However, using Bitcoin for the purchase of goods and online payments often requires mailing addresses and real names, which, in principle, can obtain the identity of Bitcoin users, which brings the risk of privacy leakage to users.

　　Policy Risk: Finally, the Bitcoin system faces different laws and regulations in different countries. The legislation of various countries on the taxation of Bitcoin income and the protection of Bitcoin assets is relatively weak, and the legitimate rights and interests of investors may be difficult to obtain effective protection. Currently in our country, there are the following shortcomings in the regulation of Bitcoin: 1) The legal definition of Bitcoin is vague. The connotation and extension of ‘Online casino and How to find it’ in our country are not explicitly stipulated or explained, and it itself is a vague concept. There are loopholes and gaps in legal supervision, and in specific cases or practices, the law cannot play a guiding role. 2) The difficulty in identifying the value of Bitcoin. The price volatility of Bitcoin leads to inaccurate value judgment, and it is difficult to properly handle the interests of Bitcoin traders when they are damaged, which may lead to some criminal cases that are uncertain due to the value of Bitcoin, damaging the authority of the law and affecting subsequent judicial relief. 3) Unclear jurisdiction and no choice of applicable law. In cases of Bitcoin infringement and violation, a series of legal disputes such as the country with jurisdiction, the court with jurisdiction, and the place of infringement have become a major focus in the judicial field today. When Bitcoin cross-border crimes occur, how to determine judicial authority is even more lacking in unified national treaties or rules among countries, increasing the difficulty of solving international cases.

　　2. China’s regulation of Bitcoin

　　With the rise of Bitcoin worldwide, Chinese investors began to flood into the Bitcoin market, becoming an important force in Bitcoin trading. In June 2011, the Bitcoin China trading platform was launched, mainly as a service provider for Bitcoin buying and selling, and trading. Domestic Bitcoin began to attract attention. In May 2013, China Central Television’s ‘Economic Half Hour’ objectively introduced Bitcoin to Chinese viewers for the first time, which was the first time the Chinese government’s official media introduced Bitcoin and was considered a positive signal. The trading volume of Bitcoin in the Chinese market soared to the first place in the world. However, with the rapid development of Bitcoin, many counterfeit coin trading and illegal ICO financing projects emerged in China. In order to ensure the safety of Chinese investors’ funds and maintain financial market stability, the Chinese government has gradually strengthened its supervision over Bitcoin trading activities.

　　In December 2013, the central bank and five other ministries issued a notice on preventing risks related to Bitcoin, considering Bitcoin to be a virtual commodity. It required financial institutions and payment institutions not to use Bitcoin as a product or pricing unit, not to engage directly in the buying and selling of Bitcoin, and also not to provide clearing and settlement services for Bitcoin transactions. This set up a barrier between Bitcoin and the financial industry to prevent the expansion of Bitcoin risks into the financial sector, leading to more severe systemic risks. Major banks also quickly responded to the regulatory requirements and banned providing services for Bitcoin. After the issuance of the notice, the market was severely shaken, and the price of Bitcoin was severely hit, with the price falling by 70% from its peak of about 8,000 yuan in the following year, once dropping below 2,000 yuan.

　　In March 2014, the central bank issued a notice on further strengthening the prevention of risks related to Bitcoin, prohibiting domestic banks and third-party payment institutions from providing services such as account opening, deposit, payment, and withdrawal for Bitcoin trading platforms.

　　Cease illegal ICO activities and expel related exchanges. By the first half of 2017, China’s ICO market had already taken shape, with fundraising reaching 2.6 billion yuan. However, at the same time, the lack of government supervision over ICO activities has led to a large number of uneven ICO projects, with unclear norms for issuers, lack of proper management for investors, irrational investor behavior causing market bubbles, and criminals taking advantage of the situation to defraud and launder money. In September 2017, the central bank, together with seven ministries, issued an announcement on preventing risks related to token issuance and financing, requiring all types of ICOs to immediately stop, and related trading platforms to cease operations. Up to this point, Bitcoin has been explicitly restricted in its development in China.

　　On January 12, 2018, the China Internet Finance Association issued a risk warning on the prevention of disguised ICO activities, pointing out that a model named ‘issuing virtual digital assets with mining machines as the core’ (IMO) is worth being vigilant about, as it has potential risks and hazards.

　　On March 28, 2018, Deputy Governor Fan Yifei of the People’s Bank of China said at the 2018 National Monetary Gold and Silver Work Teleconference that in 2018, strict internal and external management and supervision would be strengthened, and a rectification and cleaning of various online casinos and How to find it would be carried out.

　　On August 24, 2018, the China Banking and Insurance Regulatory Commission and other five ministries jointly issued a risk alert on the prevention of illegal fund-raising under the name of ‘Online casino and How to find it’ and ‘blockchain’, stating that such activities use ‘financial innovation’ as a pretext, but are essentially Ponzi schemes that rely on ‘new to pay old’, and it is difficult to maintain the capital operation in the long run.

　　On February 21, 2019, at the People’s Bank of China’s 2019 National Monetary Gold and Silver Conference, Deputy Governor Fan Yifei of the People’s Bank of China said that in 2019, it is necessary to further promote the research and development of the People’s Bank of China’s lottery and How to find it, and strengthen the monitoring and regulation of online casinos and How to find it.

　　3. The People’s Bank of China’s lottery and How to find it: China is at the forefront of the world.

　　The People’s Bank of China’s credit currency is supported by the national credit guarantee, and has the legal mandatory circulation ability. In contrast, cryptocurrencies such as Bitcoin are based on cryptographic principles, and due to the lack of credit guarantee and issuer, their value is easily affected by external policy changes and speculative behavior, and their acceptance range is relatively limited. With the rise of Bitcoin and blockchain technology, the People’s Bank of China’s lottery and How to find it has become a key research area in many countries. Central banks in countries such as the United Kingdom and Canada have expressed their intention to enter this field, but no central bank has come up with a practical application. Sheng Songcheng (2016) believes that the technological innovation of lottery and How to find it cannot replace the issuance of central bank currency and monetary policy, and is expected to play an important role in reducing issuance costs, ensuring capital security, and improving transaction efficiency.

　　China started early in the research and development of legal lottery and How to find it, and it has developed rapidly. The People’s Bank of China established a special research group in 2014 to demonstrate the feasibility of issuing legal lottery and How to find it; in September 2016, the preparation group of the bill trading platform and the preparation group of the lottery and How to find it research institute jointly established the preparation group for the digital bill trading platform, and initiated the closed development work of the digital bill trading platform. On January 25, 2017, the experimental production system of the digital bill trading platform was successfully launched for trial operation, and the digital bill issuance, acceptance, discounting, and rediscounting business based on blockchain technology was completed smoothly, achieving a breakthrough in the digital bill business, which has a milestone significance for the application of blockchain technology in the financial field.

　　
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　　The operational framework of legal lottery and How to find it has two models: one is the central bank directly issuing lottery and How to find it to the public; the other is to follow the traditional ‘central bank-commercial bank’ dual model. The signed article by Deputy Governor Fan Yifei of the Central Bank, ‘Some Considerations on the Central Bank Lottery and How to find it’, believes that the second model (dual distribution system) is more in line with China’s national conditions. This model still adopts the current paper currency issuance and circulation model, where the central bank issues lottery and How to find it to the business reserve of commercial banks, commercial banks, entrusted by the central bank, provide services such as public deposit and withdrawal of legal lottery and How to find it, and together with the central bank, maintain the normal operation of the legal lottery and How to find it issuance and circulation system. The advantage of the ‘central bank-commercial bank’ dual model lies in the credit guarantee of the central bank, having unlimited legal tender status; it is conducive to fully mobilizing market resources to promote innovation, competition, and selection of the best; it is conducive to the dispersion and resolution of risks; and it avoids the ‘squeeze effect’ of the central bank’s direct issuance of lottery and How to find it from affecting the investment and loan capacity of commercial banks.

　　Online casinos such as Bitcoin have been incorporated into the regulatory systems of various countries, and while recognizing the inherent risks of Online casinos and How to find it, we cannot deny the innovativeness and development potential of blockchain technology. The research and development of central bank lottery and How to find it complies with the demands of the times’ development, but it must be guaranteed by national credit and adhere to the principle of centralized management in order to maintain national monetary sovereignty while providing efficient services.

　　Intern Li Xin yi also contributed to this article

　　(This article’s author introduction: Chief Economist of Evergrande Group, President of Evergrande Economic Research Institute. Has served as the Deputy Director of the Macro Department Research Office of the State Council Development Research Center, Director General and Chief Macro Analyst of Guotai Junan Securities Research Institute.)