Bitcoin and traditional currency

Bitcoin has attracted much attention since it came out. This kind of virtual currency is the product of the development of the times, but compared with the traditional currency, its quantity is limited, and it does not have the multi-denomination of the traditional currency, so it cannot replace the traditional currency, and it is more like a bubble.

1. Bitcoins are limited and cannot replace traditional currencies.

The upper limit of Bitcoin is 2 1 million, and the global population has exceeded 6 billion. It can be seen that the number of bitcoins is not enough for everyone. Assuming that bitcoin replaces traditional currency, bitcoin will only be in the hands of a few people and cannot be widely circulated. You know, money flows. If a currency cannot be widely circulated, then it cannot produce value. From this perspective, bitcoin cannot replace traditional currency.

Second, traditional currency has many denominations, while bitcoin does not.

Traditional currency has many denominations, so people can easily carry out reciprocal transactions in the transaction process. Bitcoin is a currency obtained according to a specific algorithm, and the price of each currency is the same except for the different characters. But there are many kinds of goods, and the price of each one is different. If you use bitcoin instead of traditional currency, you will get into trouble and make people feel very inconvenient. So bitcoin is not suitable to replace traditional currency.

Third, Bitcoin seems to be a bubble at present.

Although each bitcoin is unique, in a sense, this currency is indeed safe. But at present, many countries do not recognize this currency, which also makes Bitcoin illegal in many countries. Therefore, the current price of Bitcoin is artificially hyped, indicating that someone is recognizing the value of Bitcoin. But if one day people no longer recognize bitcoin, then bitcoin is just a string of characters and has no value. It is precisely because of this that the current popularity of Bitcoin is like a bubble, with great risks and the possibility of collapse at any time.

Generally speaking, Bitcoin can't replace traditional currency, and it is more like a short-lived bubble.