Bitcoin once again set a new record. What is the function of setting up virtual currency?

The value of virtual currency lies in its high security based on blockchain technology and its suitability as a decentralized currency. After a period of downturn, the price of Bitcoin has recently rebounded, reaching a price of 40,000 US dollars, which is also the biggest increase in the price of Bitcoin this month. In fact, since last year, the bitcoin market has ushered in a wave of rising prices. Some analysts said that the main driving force for the rise was that large financial institutions began to enter the market and used bitcoin as a part of asset allocation, including many well-known investment companies and fund companies, and even conservative insurance companies also used bitcoin as one of their investment options.

It is also endorsed by large institutions. Last year, the bitcoin market continued to flood in funds, and the price repeatedly broke the sky. Some optimistic investors say that Bitcoin, especially its scarcity, can be regarded as digital gold. In the future, bitcoin can be invested as an asset like gold, which has the function of preserving value. Some investors also said that the decentralized nature of Bitcoin will help it to be better promoted around the world. However, some investors hold a negative attitude, saying that the current speculative atmosphere in the bitcoin market is too strong, and a large number of retail investors speculate in the bitcoin market, and their prices may fall sharply in the future.

Some professionals explained that in fact, since last year, a large amount of liquidity has entered the market, mainly due to the monetary easing policies of central banks in various countries. First, the stock market is already too high, and then the bitcoin market is pushed up. However, once the liquidity is tight, the bitcoin market is likely to experience relatively large fluctuations.

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The concept of bitcoin was first put forward by Satoshi Nakamoto on June 5438+065438+ 10/day, 2008, and was officially born on June 5438+1 0/3, 2009 [1]? . According to Satoshi Nakamoto's idea, open source software is designed and published, and a P2P network is built on this basis. Bitcoin is a virtual encrypted digital currency in the form of P2P. Point-to-point transmission means a decentralized payment system.

Unlike all currencies, bitcoin is not issued by a specific monetary institution, but is generated by a large number of calculations according to a specific algorithm. Bitcoin economy uses the distributed database composed of many nodes in the whole P2P network to confirm and record all transaction behaviors, and uses cryptography design to ensure the security of all links in currency circulation. The decentralized nature of P2P and the algorithm itself can ensure that the currency can not be manipulated artificially and create a large number of bitcoins. The design based on cryptography can make bitcoin only transferred or paid by the real owner. This also ensures the anonymity of currency ownership and circulation transactions. The biggest difference between Bitcoin and other virtual currencies is that its total amount is very limited and extremely scarce.