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What is bitcoin? Is there any investment risk in bitcoin

What is bitcoin? Is there any investment risk in bitcoin

Four seas network: bitcoin is also a virtual currency. The concept was originally proposed by Nakamoto in 2009. According to Nakamoto's ideas, open-source software was designed and released and P2P network was built. Bitcoin is a P2P form of digital currency. Point to point transmission means a decentralized payment system. What is the specific concept of bitcoin? Is there any risk in investing in bitcoin? Xiaobian takes you to learn more.

What is bitcoin

1. The concept of bitcoin was originally proposed by Nakamoto in 2009. According to Nakamoto's idea, the open source software and P2P network on it were designed and released. Bitcoin is a P2P form of digital currency. Point to point transmission means a decentralized payment system.

2. Unlike most currencies, bitcoin does not rely on the issuance of specific monetary institutions. It is generated through a large number of calculations according to specific algorithms. Bitcoin economy uses the distributed database composed of many nodes in the whole P2P network to confirm and record all transactions, and uses the design of cryptography to ensure the safety of all aspects of currency circulation.

3. The decentralized characteristics and algorithms of P2P can ensure that the currency value cannot be controlled artificially by manufacturing a large number of bitcoin. The design based on cryptography can make bitcoin only be 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 the total amount of bitcoin is very limited and it has a strong scarcity. The monetary system used to have no more than 10.5 million in four years, after which the total number will be permanently limited to 21 million.

4. Bitcoin can be cashed and converted into the currency of most countries. Users can use bitcoin to buy some virtual goods, such as clothes, hats, equipment, etc. in online games. As long as someone accepts it, they can also use bitcoin to buy real-life goods.

Investment risk of bitcoin

1. Bitcoin is a special commodity with huge reverie space, great controversy and great price fluctuation.

2. Due to various defects, bitcoin is likely to fail to reach a certain scale and enter into a positive cycle, and finally it will be half dead like Esperanto.

3. It is not recommended for ordinary people to invest in bitcoin. At present, the risk level of bitcoin belongs to venture capital and does not belong to the field of ordinary people's investment. If you have to be optimistic about investing, make sure you understand bitcoin well, invest with idle money, and be prepared to lose 95% of the principal.

4. In terms of strategy, it is recommended to make a long-term small amount of fixed investment. When making a small amount of fixed investment, the number of currencies that are purchased at a high price will automatically decrease, and the number of currencies that are purchased at a low price will automatically increase, which has been proved by history to be the strategy with the least risk. Even if the bad luck in the three bubble peak before the start of small bets, but because the bull short bear long, a small amount of short-term high money costs are quickly spread out by the subsequent long-term cheap money, so will not be covered for too long.