The Chinese government wants to strengthen controls on bitcoin, to prevent Chinese people sending massive capitals out of the country. Last week the value of a bitcoin still was above the $ 1,000 limit, but in recent days there was another sharp decline, precisely because of Chinese interference. Gladly the price seems to be stable at the moment! But what was bitcoin again? And will we ever pay with it at the bakery?
The end of 2013, early 2014. Newspapers and journals were full of bitcoins, the cyber currency seems perfect. 1 bitcoin is worth more than $ 1,000, and there are shops where you can pay even the smallest amounts virtual currency. Forget banks and governments, bitcoin will conquer the world!!
Bitcoin had all of the hype. Suddenly everyone was talking about it. The rate peaked hard, then, a few months later, just as hard it tumbled down. China had had enough and forbade the banks to use bitcoin. The crash waked even the media, but then it became quiet. Very quiet, very suspiciously quiet.
The special thing about Bitcoin is that it maintains itself. There are hardly any costs and inflation is impossible, because there are only gonna be 21 million bitcoins and that number is fixed. You can buy all sorts of things online with a bitcoin, though the number of websites that allow it as a payment is still limited.
This brings us to the situation today. How is bitcoin doing? There are more and more traders who use it. Bitcoin is still on the rise. Bitcoin is now more widely used then a few years ago. Bitcoin is indeed alive, we just dont see it. In Asia, there is much more interest in the digital currency now. As the Chinese seek even more bitcoins, they circumvent the stricter rules around their own currency. Late last year India emerged panic when the government decided to declare the most widely used paper money worthless, hoping to win the fight against black money.
The Indians rushed to the bank to open an account and to exchange their worthless papers against "legal" payment. But something else also happened. Bitcoin trading strongly gained in importance. And there is also the strength of the digital currency. It is a very good alternative in countries where the current currency, or the economy as a whole, is in a (deep) crisis.
Bitcoin is also hot in China because the Chinese currency has been falling for a while in value, but there is more. The Chinese have enormous amounts of computing power. Thanks to this power, they can more easily mine bitcoins, which are the cause of bitcoins falling more into Chinese hands. The Chinese use bitcoins also to get money anonymously and safely send it to an other land.
The Chinese government is obviously tired. Last week it was announced that Beijing will carry out more checks on bitcointransactions. The bitcoinworth received a little loss. As the increase in the preceding months was more spectacular and a correction was inevitable. One thing is clear: what's going on in China today, also largely determines the price of bitcoin.
It is a striking paradox that china has become the center of power for bitcoins. The whole vision behind the digital currency is that no one should possess power to manipulate it. No bank, and no government would have to say something about it. Today, most bitcoins in China seem to be earned by large companies with massive computational power. And who says Chinese companies, says Chinese government. The party bosses in Beijing seem to have controll of large quantities of bitcoins. They have the power to win them and the power and influence to manipulate the price. Also take into account the fact that China has a population of 1,35+ billion people.
So bitcoin is alive, but not with us.
If a new dollar or euro crisis erupts in its course. An anonymous, independent, virtual currency seems to be suddenly attractive again. What if the euro falls apart and the hundreds of millions of Europeans rush to their (super) computers to buy bitcoins? Bitcoin therefore thrives on misery. Where there is a financial crisis, bitcoin is never far away. Never say no to bitcoin.
I will just left this here:
https://www.youtube.com/watch?v=-hlN2nel5HI and sadly video ends in June 2016
