Why can’t digital currency be exchanged for gold (why digital currency cannot replace traditional currency)?
Why can\’t digital currency be exchanged for gold? Why can\’t digital currency be
Why can’t digital currency be exchanged for gold? Why can’t digital currency be exchanged for gold?
Bitcoin has always been regarded as a global safe haven asset as a means of value storage. However, due to its high volatility, it cannot be traded directly on the market (spot and derivatives), making it difficult to serve as a hedge against inflation. Therefore, if it is used as a speculative investment portfolio or wealth storage tool, it will be difficult to achieve the “break-even” effect, as there are no meaningful price changes that can be retained by investors in this cryptocurrency.
So why is Bitcoin unable to compete with the traditional market? One reason is that Bitcoin is a highly unstable and illiquid virtual commodity. It also has a high risk premium, which can result in significant economic losses when there is excessive returns.
From this perspective, it is not a good idea—even projects like Ripple have issued their own tokens or introduced new tokens through various distributions and transactions. However, these are new products designed and tested independently, not relying on the development work of other projects. But now we can see that many tokens and applications based on blockchain technology are using the Ethereum network and running on different smart contract platforms, and there is no difference between these platforms. (Note: The author of this article is Anthony Pompliano, co-founder of Morgan Creek)
In addition, although the price of Bitcoin has fallen by more than 40% recently, most people still believe that Ethereum is safer than Bitcoin, and some even predict that Ethereum may rise further. Although the transaction speed on Ethereum is currently very fast, as more and more investors turn to concepts such as DeFi and NFT, the growth of ETH will quickly slow down.
Furthermore, for ordinary investors to participate in decentralized exchanges, they must first have the following conditions: 1. Users must first download DAPP software that supports wallet services; 2. Your wallet must have enough time to prepare your ERC20 tokens and various tokens. If you only want to buy BTC and LTC, you will be able to easily convert them into fiat currency. However, for those who want to enter the DeFi ecosystem, they may not understand exactly what DeFi is. For example, you are looking for a DeFi aggregator (DEX) or a protocol (such as Compound). When you choose the protocol, you will see an interface that shows which platform you are using for the USDT/DAI trading pair. Of course, you can also choose to deposit money somewhere and then withdraw it, which can earn returns.
Why digital currency cannot replace traditional currency
Why can’t digital currency replace traditional currency? Looking at the data from the past few months, the prices of Bitcoin and Ether have continued to rise after reaching new historical highs. Now, discussions about the “price difference between Bitcoin and fiat currency” are also heating up in the market.
According to statistics, currently about 40% to 60% of Bitcoin in the market is considered as value-anchored assets, of which only 20% belongs to exchanges, and the rest is primarily funds stored in other exchanges (such as Coinbase), with the remaining portion coming mainly from deposits on trading platforms. This indicates that digital currency, as an emerging technology, does not have a true application scenario. However, these cryptocurrencies have strong characteristics of innovation, disruption, and utility, so their future application prospects are still very broad.
This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/23620/
It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.
Recommended articles
-
Meilian Education’s Crypto-Related Revenue Takes the Lead in 2022
It is reported that Meilian Education released its annual report for 2022. During the year, the revenue of Meilian was 399 million yuan, down 45.2% from 729 million yuan in 2021. Among them, in 2022, the revenue of Meilian’s cryptocurrency related businesses totaled 81.599 million yuan, accounting for 20.4% of the total revenue. Meilian Education pointed out that in the financial year ended December 31, 2022, mining from Bitcoin contributed the vast majority of revenue. In 2022, the annual cryptocurrency related business revenue of Meilian Education totaled 81.599 million yuan, accounting for 20.4% of the total revenue Analysis based on this information:Meilian Education, a leading education company in China, recently released its annual report for 2022. The report revealed a decline in revenue from the previous year, with a 45.2% drop from 729 million yuan in 2021 to 399 million yuan in 2022. This could be attributed to the disruption caused by the pandemic and the economic slowdown in China….
-
Binance’s Impact on TrueUSD
It is reported that the TrueUSD (TUSD) stable currency has become the fifth largest stable currency in terms of market value, driven by the increasing importan…
-
**Bitcoin Network’s Pending Transactions: An in-depth Look**
According to reports, according to BTC.com data, the current number of unconfirmed transactions in Bitcoin\’s entire network is 127750, with a total network computing power of 338.4
-
Understanding the Performance of the A-Share Market, Shanghai Composite, Shenzhen Composite and Shenzhen Blockchain 50 Index
According to the news, the A-share market closed at 3338.15, with the Shanghai Composite Index rising 0.6%, the Shenzhen Composite Index closing at 11800.09, with a closing increas
-
Avalanche sees record daily production of BTC.b
It is reported that according to Dune data, on March 2, Avalanche cast about 2011 new BTC. b, the largest number of BTC. b castings in a single day, and the to…
-
DuckDuckGo introduces AI-powered search function using Wikipedia
It is reported that DuckDuckGo, the privacy search engine, has launched a test version of the AI-assisted search function that uses Wikipedia to answer questio…
-
SEC Chairman Seeks $2.4 Billion to Chase Cryptographic “Misconduct”
According to reports, Gary Gensler, chairman of the United States Securities and Exchange Commission, supported President Biden\’s request to allocate a record $2.4 billion to the r
-
Accounting Standards for Encrypted Assets: A Proposal by FASB
On April 3rd, it was reported that the Financial Accounting Standards Board (FASB) of the United States has proposed an update to accounting standards for and disclosure of encrypt
-
Ethereum Domain Name Service Launches Name Wrapper App on Goerli Test Network
On March 4, according to the official Twitter, the Ethereum domain name service ENS announced the launch of a new app that supports Name Wrapper. At present, t…
-
PERP sees significant gains in 24 hours, reminding investors to exercise caution
According to reports, on February 24, market data showed that PERP (Perpetual Protocol) rose by more than $1, and is now quoted at $1.02, up 21.79% in 24 hours…
-
What kind of mining machine is ibelink (chain link mining machine)
What mining machine is ibelink? According to official information, what mining machine is ibelink According to iBELINK’s official website, ibelink’s mining revenue is settled on a daily basis, with an annualized rate of approximately 30%. Currently, there are three projects running on the Coin Security smart chain: 1. Issuing BNB tokens based on the ibelink protocol 2. Projects that use POS consensus mechanism for PoW forking 3. It uses the solution of Bitmain and Shenma OEM The above three modes are developed by the ibeLink R&D team, as follows: 1. DeFi project ilin (ibeswap) on Ethereum is a decentralized trading pair issued based on the ibeam public chain, on which users can buy and sell any digital assets or services 2. ibelink is a cross platform, borderless blockchain open network that supports the exchange and transfer of any digital currency 3. Based on the cooperation agreement between ibeswap and imToken, build a decentralized financial ecosystem based on cross platform, not…
-
JPMorgan Chase Predicts $2 Trillion Injection from Federal Reserve’s Emergency Loan Plan
According to reports, JPMorgan Chase said that the Federal Reserve’s emergency loan plan may inject $2 trillion into the US banking system. （Watcher.Guru） JPMorgan Chase: The Federal Reserve’s emergency loan plan could inject $2 trillion into the US banking system Analysis based on this information:JPMorgan Chase, one of the country’s largest banks, has predicted that the Federal Reserve’s emergency loan plan could inject as much as $2 trillion into the US banking system. This report comes as the US economy continues to reel from the effects of the global pandemic, which has caused record levels of unemployment, business closures, and a historic drop in gross domestic product (GDP). The Federal Reserve announced its emergency loan plan in March of this year, designed to offer assistance to businesses and individuals impacted by the pandemic. This plan consists of several programs, including the Main Street Lending Program, designed to support small and mid-sized businesses, and the Municipal Liquidity Facility, designed to provide…
-
#Damus Launches v1.4.0: A Revolutionary Update To The Nostr-Based Open Social App
According to reports, Damus, an open social app based on the Nostr protocol, tweeted that v1.4.0 had been launched in the Apple App Store. This version upgrade includes support for
-
Synthetix’s SCCP-293 Will Lower Perps Fees and Increase Position Limits
On April 28th, Synthetix announced that SCCP-293, which has been activated to update perpetual contract parameters, will significantly reduce Perps fees and increase the limit on o
-
Pendle’s Total Lockup Value Reaches a Record High in DeFi Yield Market
On March 19th, according to Defellama data, the total lockup value (TVL) of Pendle in the DeFi yield market reached a record high of $38.35 million. The DeFi yield market Pendle TVL reached a record high of $38.35 million Analysis based on this information:The DeFi yield market has witnessed an unprecedented rise in demand, and Pendle has emerged as a promising name in the industry. On March 19th, Defellama data reported that Pendle’s Total Lockup Value (TVL) reached a record high of $38.35 million, indicating the platform’s immense potential and its users’ trust in it. Total lockup value refers to the total amount of assets locked in a smart contract. This metric is used to gauge the popularity and success of DeFi projects. The surge in Pendle’s TVL is a testament to its ability to generate high yields and provide liquidity to users. Pendle is a decentralized platform that allows users to earn yields in the form of ERC20 tokens….
-
Market Fluctuations in Cryptocurrency: Understanding Binance Coin (BNB) Fall Below $315
According to reports, market data shows that BNB has fallen below $315 and is currently quoted at $314.8, down 3.52% in 24 hours. The market fluctuates greatly, please do a good jo