Investing In Stocks
gambling, investment). However, due to its gambling advantage, bitcoin has virtually no chance of being fully legalized as a means of payment. Worse still, there is a risk of bitcoin banning in some countries. This may alarm manufacturers who have suffered
real costs in producing bitcoin and they probably kept some of it produced
cryptocurrencies for investment purposes. In a reasonable scenario, over time, bitcoin gambling services and their users will gradually take over the produced
bitcoins at current prices. Let us recall, however, that bitcoins are constantly produced, which
increases their supply ». Thus, further popularization of this cryptocurrency becomes a way to increase the demand, which could maintain the current prices.
The steps taken by bitcoin promoters, however, cannot duplicate the success of the websites
offering group purchases. In this case, providers of services and retail goods
they were forced to make massive use of these websites. This compulsion was based on the fact that
Due to the lower price, customers chose only those suppliers who offered purchases
in a group system. Bitcoin cannot create such a constraint. Café
accepting bitcoin payments may gain several new customers. Non-users
bitcoin, however, lose nothing when you go to another coffee shop that only accepts regular
payments.
The model of popularizing bitcoin may be based on the provision of services and gifts for
people who gamble with bitcoin. This type of model works in the world
standard gambling industry. In short, for the owned bitcoins, the user can
get to the hotel, get a few prizes and a certain amount of standard currency there,
who will later (on average) lose at a nearby casino.
17 Of course, these are not real shares that allow you to get a portion of profit from the activities of this
business.
14
However, the successful popularization of bitcoin, which will allow bitcoin producers to exit this business unscathed, may have unexpected results. Bitcoins can deepen
its illegal uses. For example, it has been accepted as a safe way
for the transfer of money as part of corruption. The corrupt person may allow
waiting for the transferred bitcoins to be confirmed and converted into currency
standard. This type of practice is practically undetectable, which can be easily explained by
How bitcoin propagators are gaining new supporters of accepting this cryptocurrency.
Acceptance of bitcoin in local communities may also release the social advantage of this cryptocurrency, that is, using it for the promised purpose. People who do small jobs
jobs and sellers of their own products can use bitcoin to run their own
operating in a gray tax-free zone.
However, Bitcoin has several limitations that will inhibit its popularization.
Let us recall that bitcoins are produced in blocks that contain and confirm information about transactions made. All blocks produced are set accordingly
the order of their production, creating the so-called ªa «a chain of blocks. This chain contains confirmations
of all transactions made with bitcoin and is the core of this cryptocurrency. For some, this chain of blocks is a brilliant solution that, like a great land book
lists all bitcoin movements and will grow infinitely so that everyone can
add ¢ to it. For others, this chain of inwestujfinanse.pl blocks is a hopeless and ugly solution
the problem of transferring currency in the form of information. A full user of bitcoin must have
access to the entire chain, which is constantly updated. This raises serious doubts
of a practical nature. In order to use bitcoin fully, it is important to keep track of all past transactions of all bitcoin users around the world. Normal
the currency has no such limitations.
The issue of the size of the blockchain is so sensitive that bitcoin users consider it
too closed. Ša «cuch is currently about 19 GB (19 gigabytes) in size and shows a light
the tendency to square increase. It is worth noting that this increase is recorded
even with a stable transaction volume in bitcoin. The increase in the popularity of bitcoin and the increase in the volume of transactions may cause the size of the blockchain to start
they grow too fast. The increased number of transactions will also affect the time needed for them
confirmation. Bitcoin in its current form does not guarantee the technical capacity to cope with the increase in popularity. As a result, the bitcoin promoters
offer simplified procedures for acquiring, storing and spending bitcoins, co
it affects the security of this cryptocurrency.
Failure to solve the security issue and the loss of trust of many existing bitcoin users is a serious brake on its popularization. Mysterious disappearance 650
thousands of bitcoins deposited by users on the Mt. Gox odstrasa
from bitcoin and highlights problems with its convertibility into standard currencies. Shows
also, that blockchain is a weak solution. In case of bitcoin theft
the perpetrator leaves his trail, i.e. information to which addresses are stolen
bitcoins. So it is a normal transaction that results in confirmation with new blocks
of bitcoins is lost forever in the blockchain. So the detection of the theft procedure is
possible, but canceling these transactions is difficult. Simple cancellation of these transactions
means the cancellation of all transactions that have been confirmed with subsequent blocks.
To avoid this, the bitcoin production process should be temporarily stopped. Cancel the disputed transactions and restart bitcoin production for re-confirmation
other transactions. In this solution, some blocks are destroyed causing losses
to their producers and producing overhangs of transactions to be confirmed. Due to
15
for the decentralization of bitcoin emissions, this type of solution is not used and the blockchain
seals such acts of theft.
To sum up, bitcoin as a product may turn out to be unattractive or even inconvenient for
people who do not need to operate in the gray zone.
4.7 G. Market parameters
The price of bitcoin versus USD reached its maximum of USD 1,250 at the end of November 2013
year. A few days later, the price dropped permanently below $ 1,000. The reason for this limitation
was the decision of the Central Bank of China (of December 5, 2013) imposing the
serious restrictions in bitcoin trading. According to this decision, Chinese financial institutions cannot buy or sell bitcoins, quote prices in bitcoins and offer
any bitcoin related products and services.
This decision is important because more than half of all bitcoins are converted into currencies
standard is in the hands of people using the Chinese currency. In fact, according to data from bitcoincharts.com/charts/volumepie/ peki, the OKCoin stock exchange has a 56% share of
global trading of bitcoins listed on all exchanges for this cryptocurrency
on standard currencies. Another 5% share is held by the Shanghai BTC China stock exchange. Both of these
the stock exchanges can only use Chinese currency and other cryptocurrencies. A total of 62% of all
bitcoins exchanged on world stock exchanges are exchanged into Chinese currency. The exchange of bitcoins into USD has a share twice as small and amounts to 27%. Replace with others
currencies have a share of 11%, of which only around 3% is in the euro.
Such a large share of the Chinese currency in the global exchange of bitcoins into standard currencies
requires in-depth analysis.
The turnover recorded on the global bitcoin exchanges is not high. In the second quarter of this year.
all bitcoin transactions were worth around $ 50 million per day. Rotation on
All bitcoin exchanges should therefore not exceed 50 miles. USD per day.
The share of the Chinese currency in this turnover is no more than 30 miles. USD per day.
The above speed is very low. According to BIS last year - average daily market turnover
exchange rates of standard currencies amounted to 5.3 trillion USD, so it is about 200 thousand times
more than a possible 50 million USD of average daily turnover on the foreign exchange market
bitcoin.
Despite these low turnover of the Chinese currency exchange into bitcoins, it should be remembered that the bank
central China applies a rather tough policy of isolating its currency from other standard currencies. Therefore, not only the desire to protect your citizens, but also your currency
are cited as the reasons for the imposition of severe restrictions on bitcoin by the People's Republic of Poland
Bank of China.
The most popular world currency is the US dollar due to the size and strength of the US economy
and political and historical conditions. The size of China's economy is comparable,
but the Chinese currency is not freely exchangeable with other standard currencies (co
it has its justification, but it is slowly destroying China's trading partners.) Bitcoin could be
so it is treated as a special transmission belt, which also enables
and risky scale.
The currency issued by China's central bank is called the renminbi. Basic unit
this currency is yuan. Yuan is used in mainland China and is referred to as CNY.
16
In addition, the yuan can be transferred to Hong Kong under the abbreviation CNH. Exchange
CNY on the CNH is subject to certain restrictions. Additionally, Hong Kong has its own
convertible (and quite popular) currency Hong Kong dollar denoted as HKD. Due to
Due to its structure, the dollar may be equated to the USD. HKD to USD rate
is almost constant at HKD 7.75 for $ 1. Therefore, restrictions on replacement
Yuan to HKD must be similar to the conversion to USD. Of course, with the exception
the black market of the yuan exchange in Hong Kong.
Whether bitcoin can join this game of exchange depends on the attitude of the authorities residing in Chinese territories. So far, he has not had such opportunities. In May this year. such
The possibility, however, was created together with the bore by the Hong Kong ANX stock exchange (Asia
Nexgen Bitcoin Exchange) for trading in key global currencies. Of course the main
The attraction of this stock exchange is the possibility of exchanging bitcoins for the Chinese currency CNY. Other accepted currencies are: AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, SGD and USD. See you
trading in these currencies is in the start-up phase. Each of these currencies has a daily exchange rate
for bitcoin is almost identical. However, it is difficult to assess whether the leading Chinese cryptocurrency exchanges will provide their users with adequate security and will receive permanent
permission to operate in yuana allowing bitcoin to benefit from the minimum
thaw in Chinese monetary policy.18
It is also worth emphasizing that the real scale of operations in bitcoin is difficult to assess.
The key issue is the average daily bitcoin turnover. The website blockchain.info reports the total turnover, which on average varies between a million and a half million btc a day. Unfortunately
Bitcoin works by having the person making the transaction transfer a certain amount first
bitcoins, and then receives the rest in bitcoins. Total revolution counts both parts of this
transaction. If a person sends 1 btc and receives 0.9 btc the rest by making a transaction
transferring 0.1btc, the real turn is 0.1btc and the total turn is 1.9btc. Data
related to the total turnover are thus processed to estimate the real turnover (see blockchain.info/pl/charts/estimated-transaction-volume). It is unclear to what extent
these estimates are correct. However, bitcoincharts.com does provide more details
data on trading on bitcoin exchanges. According to these data, the average daily turnover on these stock exchanges over the last 30 days amounted to about 100 thousand. btc a day.
This amounts to about 50-60 million USD of daily turnover on the btc exchange market to standard currencies (as long as we include a not very convertible yuan).
For safety, we can also focus on the total turnover and assume that it is
1 million btc a day. Even if this turnover goes entirely to btc exchanges, then
we get 500-600 million USD of daily turnover on these exchanges. So it is a drop
20 thousand times smaller than the entire ocean of the FOREX market, which according to BIS data in the previous
the year had 5.3 trillion dollars in daily turnover.
Bitcoin capitalization alone is very meager at just $ 8 billion. For
comparison, in March this year. Unicredit announced a quarterly loss of around 20 billion
dollars. The disappearance of all bitcoins in one day can therefore be assessed as a smaller
a financial loss than a severe sneeze of a large European bank.
In its current state, bitcoin, along with its adherent and competitive cryptocurrencies, is
almost invisible from the perspective of the financial market.
18 Since the issue of yuan's marketization is very serious, it is possible that this
bitcoin will disappear when yuan is included in the SDR basket (see internet).
17
4.8 H. Big failure rate
The high failure rate in the bitcoin-related services environment is a factor that
significantly reduces the possibility of popularizing this cryptocurrency. The calendar of these
the failure is not complete, but it does make it possible to understand the scale of the problem.
Aug. 15, 2010 - A vulnerability in the bitcoin protocol exploited and generated by the user
two fake transactions for a total of over 184 million bitcoins. IN
To cancel these transactions, the block chain has been split.
13.06.2011 - User allinvain declares that 25 pieces of his virtual wallet were stolen
thousand btc, thus informing about the first cryptocurrency theft.
19.06.2011 - A hacker steals data from users of the Mt. Gox, break
passwords of some of these users and place an order for the sale of large amounts of bitcoins
causing their value to fall to 0.01 USD.
July 26, 2011 - Polish bitcoin exchange Bitomat loses 17 thousand. btc in error
administrator, and then was taken over by the Mt. Gox.
05/08/2011 - One of the first providers of simplified procedures for bitcoin trading
MyBitcoin announces bankruptcy due to the loss of over 78 thousand. btc as a result of a hacker attack.
05.10.2011 - The bitcoin exchange Bitcoin7 after a few months of operation announces its
closure as a result of a hacker attack and the loss of over 5,000 btc.
13.02.2012 - The second largest (at that time) bitcoin exchange Tradehill
announces its closure for legal reasons (without revealing the losses suffered by her
users).
March 2, 2012 - Linod, a cloud computing company, is attacked
by hackers. They target Linod customers who use Linod's servers to support them
own bitcoin-related websites. The biggest losses are incurred by the company
Bitcoinica (over 43 thousand.Btc) offering contracts for speculation on the rate of btc against
USD. In total, the losses of Linod customers amounted to approx. 47 thousand. btc.
04/11/2012 - Betcoin, a bitcoin gambling website, reports