Bitcoin: The rise of the king of currencies and investment value analysis

In the world of digital currencies, Bitcoin is undoubtedly the brightest star and is often called the "King of Currency". So why does Bitcoin get such a title? Is it really worth investing in? This article will explore the value, advantages and future investment potential of Bitcoin from multiple perspectives.

First of all, the rise of Bitcoin is inseparable from its unique technical background and economic model. Bitcoin was released in 2009 by an anonymous person named Satoshi Nakamoto. The blockchain technology behind it provides it with decentralized, transparent and secure features. This technology not only makes transactions no longer dependent on traditional financial institutions, but also ensures the immutability and anonymity of transactions. Because of this, Bitcoin has attracted a large number of users and investors around the world, forming a huge ecosystem.

Secondly, the scarcity of Bitcoin is also one of the reasons why it is called the "King of Currency". The total supply of Bitcoin is limited to 21 million pieces. This design makes Bitcoin highly resistant to inflation in the long run. Unlike traditional currencies, governments can print money at will, leading to the risk of inflation. The scarcity of Bitcoin makes it more like a digital gold, a tool for investors to fight inflation.

In terms of investment, Bitcoin's performance is also quite eye-catching. Since its first public trading in 2010, the price of Bitcoin has experienced many fluctuations, but the overall trend is upward. For example, in 2020, the price of Bitcoin soared from about US$7,000 to US$64,000 in April 2021, an increase of more than 800%. This phenomenon has attracted the attention of a large number of investors, and many financial institutions and companies have begun to include Bitcoin in their asset allocation.

However, despite the impressive return on investment of Bitcoin, its price volatility cannot be ignored. The high volatility of the Bitcoin market exposes short-term investors to huge risks. For example, in May 2021, the price of Bitcoin plummeted from $64,000 to $30,000, and many investors suffered huge losses in a short period of time. Therefore, investing in Bitcoin requires a certain risk tolerance and investment strategy.

Of course, Bitcoin is more than just an investment tool. It has also driven innovation in financial technology around the world. As Bitcoin becomes more popular, more and more financial technology companies are beginning to explore the application of blockchain technology, not just limited to digital currency transactions. For example, the rise of decentralized finance (DeFi) platforms enables users to borrow and trade without intermediaries, bringing disruptive challenges to the traditional financial system.

In addition, Bitcoin has also facilitated cross-border payments. Traditional cross-border payments usually take days to complete and have high fees. Bitcoin transactions can be completed in just a few minutes, and the fees are relatively low. This feature has led to the gradual application of Bitcoin in international trade and personal remittances.

However, investing in Bitcoin also faces some challenges and risks. First, the uncertainty of market regulation is an important factor. Governments have different attitudes towards Bitcoin, with some countries taking a supportive attitude while others have restricted or even banned it. This policy uncertainty may affect the price of Bitcoin and the stability of the market.

Secondly, security issues are also an aspect that investors need to pay attention to. Although the blockchain technology of Bitcoin itself is safe, there are hidden dangers in the security of exchanges and wallets. In recent years, many exchanges have been attacked by hackers, resulting in the loss of user assets. Therefore, choosing a safe and reliable trading platform and properly keeping personal assets are issues that every investor must pay attention to.

When considering the investment value of Bitcoin, it is also important to understand its market dynamics and technological development trends. As more and more companies and institutions recognize the value of Bitcoin, the maturity of the market will continue to increase. For example, companies such as Tesla and Square have included Bitcoin in their balance sheets, which not only enhances the legitimacy of Bitcoin, but also attracts more institutional investors.

In addition, with the continuous development of blockchain technology, the emergence of technologies such as Layer 2 solutions and Lightning Network will further improve the transaction efficiency and scalability of Bitcoin. These advances are expected to solve the problems of slow transaction speed and high handling fees during peak hours of Bitcoin, making it more convenient in practical applications.

In the future, with the popularity of digital currencies and the continuous innovation of financial technology, the status of Bitcoin may be further consolidated. As an emerging asset class, the role of Bitcoin in investment portfolios will become increasingly important. Many investors are beginning to view Bitcoin as a tool to hedge against the volatility of traditional assets, especially in the context of increasing economic uncertainty.

Finally, although Bitcoin is known as the "king of currencies", investors still need to be cautious when making decisions. Market volatility and policy uncertainty may bring risks. Reasonable investment strategies, risk management and in-depth research on the market are the keys to successful investment. The future of Bitcoin is full of opportunities, but also accompanied by challenges. Investors need to find their own position in the changing market.

In short, Bitcoin is called the "King of Currency" not only because of its technological innovation and market performance, but also because of its unique position and potential value in the current financial system. Despite all the challenges, Bitcoin is still a digital asset worthy of attention and investment. In the days to come, with the advancement of technology and the maturity of the market, Bitcoin may be able to truly realize its mission as a global currency.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Why is Bitcoin called the king of coins? Is Bitcoin the most worthwhile digital currency to invest in? As the representative currency of the entire cryptocurrency industry, Bitcoin has always had a position and price that is unrivaled. I still remember that in June 2013, the market value of Bitcoin accounted for more than 95% of the entire digital currency market. With the development of blockchain and the entire digital currency industry, other currencies including Ethereum have also begun to exert their strength. Although they cannot shake Bitcoin's position as the leader, they are also constantly eroding its original share.
--As of September 11, 2017, Bitcoin's market share was approximately 47%, more than half of its peak.
Recently, the supervision of ICO in China has attracted the attention of almost everyone in the cryptocurrency circle. When the relevant departments urged domestic ICO projects to return and repurchase coins, it seems that there is not much supervision on Bitcoin and Ethereum. So some friends may ask: In the future, will the entire cryptocurrency circle only have a few currencies such as Bitcoin and Ethereum, and no other "miscellaneous" tokens will be needed?
The answer is of course no!
Why do we need tokens?
As we all know, blockchain projects are all open source.
Open source means that everyone can view the operation of the project and it is impossible to make profits through information asymmetry.
A project team often needs to operate and maintain through profit, so they choose to give a certain value to the issued tokens to reward the contributions made by relevant project participants. For example, in addition to its main payment function, Bitcoin can also be used as a miner's fee to reward miners who have contributed computing power to reach consensus (interestingly, the initial price of Bitcoin was calculated by dividing the electricity cost consumed by mining by the number of coins mined).
After making their own efforts and obtaining corresponding tokens, these token holders will be more motivated to maintain and improve the system so that it can be recognized by more people and become more valuable, and the value of their tokens will naturally rise.
In many ICO projects, the issuing team will often keep a portion of the tokens for themselves. On the one hand, it is used as funds to maintain the normal operation of the company, and on the other hand it also serves as an incentive: after all, if no one is interested in the project, these tokens will naturally have no value.
In addition to value functions, some tokens are also given the right to use the project. For example, when developing a blockchain project on Ethereum, a certain fee needs to be paid each time the blockchain service is used. This fee is not paid to the project party, but to the Ethereum miners who maintain the entire network. There is also the familiar cloud storage SC, whose tokens can be used to purchase network storage space.
Another example is GXS, the token of GXS. The GXS chain it developed is a public chain. Applications based on the GXS chain can be developed on it. The execution of such applications requires GXS as fuel. At the same time, holding GXS can obtain indirect benefits from the project's profits. Therefore, the token GXS belongs to both virtual goods and income certificates.
Why Bitcoin Can't Unify the Cryptocurrency Circle
Almost all blockchain projects are self-contained systems with their own rules and settings. If their most critical tokens are attached to Bitcoin or Ethereum, then their future value will depend entirely on Bitcoin or Ethereum, which in turn affects the value of their own projects.
The best example in reality is the establishment of the Bretton Woods system after World War II, which stipulated that the U.S. dollar was directly linked to gold, and the exchange rates between the legal currencies of other countries and the U.S. dollar were fixed, which meant that the prices of legal currencies of various countries were set by the United States alone.
--This was of course unfair, so the system was ended by the Nixon administration in 1971.
In addition, as described in the second part, different tokens have different usage functions (currency, usage voucher, income voucher, etc.), and it is difficult to perfectly measure them with just one currency. Let's take the real world as an example that is not very appropriate but easy to understand: even if the world abandons the legal currency of each country and uses RMB as the only currency, it is still impossible to use computers directly with RMB. You must use RMB to buy electricity and then start the computer. The RMB and electricity here can be simply compared to Bitcoin and Ethereum in digital currency.
Finally, the maximum number of Bitcoins is 21 million, and there is no possibility of additional issuance. If everyone uses Bitcoin as the only digital token, then as more projects are added, Bitcoin will become more and more dispersed and scarce, and then Bitcoin will be subdivided to the point where 8 decimal places are not enough. The following annoying scenarios may even occur:
"How much BTC should I pay you?"
"0.0000000000000000000233 BTC, thank you for your patronage"