The most significant reason for the emergence of Bitcoin is that it proved that a monetary solution with a "source of value" that is different from the currency (banknotes) provided by the central bank can exist in the virtual space.
The elemental technology itself is a "dead technology" that has been tried for many years. Encryption technology is used to confirm the right holder, and a mechanism called blockchain (distributed ledger) is applied to determine the right amount.
However, even if anyone can do it, it is difficult to do it first. After all, followers and imitators, which are collectively called altcoins (alternative coins that mean alternative coins), have appeared one after another, which is why Bitcoin is "the egg of Columbus". Let's do it.
What is Bitcoin's strength?
Bitcoin's strength as a currency is that it has its source of value. This is different from what is called "electronic money" such as Suica. Electronic money is a container for the value of existing currencies such as yen and dollars and does not create new value. Bitcoin, on the other hand, finds the source of value in an act called "mining" without taking in such external value. Specifically, a new bitcoin is given to the miner who proves the correctness of the transaction as a reward. You can read more here about risks related to bitcoin
Simply put, bitcoin is closer to gold and silver in the sense that mining costs create market prices. In the case of Bitcoin, it can be said that the main cost is the electricity bill of the miner. If the banknotes are the national credit standard, Bitcoin can be called the electricity standard.
In this way, Bitcoin, which has its source of value, can theoretically build an independent financial system, similar to the yen and dollar. Not only for payment purposes, but it can also be used for deposits and loans when interest rates are generated, or it can be IC chip-type electronic money, You can. It's a joke, but it's not difficult to circulate in the form of a real coin (in fact, some companies have already made it).
However, it will be difficult to maintain the trust of people as a currency with the current "bad performance" of Bitcoin. The reason is that the generation rate is fixed (halved every four years) toward the total issuance limit of 21 million BTC (the currency symbol of Bitcoin is BTC).
Under such a rigid supply schedule, if the price of Bitcoin goes up, miners gather and it becomes difficult to mine, and the price goes up further, and if it goes down, price depreciation in the sense that popularity falls to mining and price goes down further. It has already been rampant.
You don't know the true meaning of the designer, but in short, Bitcoin is a "speculative" asset. If the followers of Bitcoin, also known as Altcoins, want to increase their presence in the monetary world, this badness needs to be corrected.
You don't think it's appropriate to call bitcoins and altcoins as "virtual currencies." As with the yen and the dollar, there are "virtual" elements in the currency in the first place. When it comes to the hypothesis, it is much cleaner to call the Special Withdrawal Right (SDR) of the International
Monetary Fund
Monetary Fund (IMF), which allows the exchange of major currencies by the legal system. Moreover, the argument that inflation increases when the amount of money supplied increases is felt as if the currencies such as the yen and the dollar do not have a supporting value entity, that is, they are "virtual.
However, there are many tears in the POW-type currency whose value is backed by mining. That is, as, with gold and silver, the mining cost becomes the money supply cost itself. On the other hand, banknotes are, so to speak, "free-for-use" credit money that is issued by the central bank buying government bonds and other assets. In history, real money has been replaced by credit money. The same is likely to happen in the digital space.
