How much role does blockchain technology play behind the surge in Bitcoin prices?

Author: Hey Yaoyao

On June 16, OKCoin, China's largest bitcoin trading platform, showed that the highest price of bitcoin was 4,954 yuan. In just half a month, bitcoin soared by 1,300 yuan from 3,646 yuan at the beginning of the month, an increase of 135%. In addition to the news that bitcoin will be reduced in July, blockchain, a technology that is popular in various countries, has also played a role in fueling the trend.

So what exactly is Bitcoin that is so popular in the Chinese market?

OKCoin Vice President Duan Xinxing said that currently in China and most countries, Bitcoin is defined as "digital assets", that is, a form of digital assets or digital commodities. If we look at it from an asset perspective, rather than as a currency like the US dollar or the RMB, then price fluctuations of gold, oil, futures, etc. are actually normal.

OKCoin founder and CEO Mingxing Xu believes that the rise in Bitcoin prices is because the blockchain technology behind it has attracted more attention from people around the world.

So what is the blockchain behind Bitcoin?

Duan Xinxing added: "In fact, I personally agree with a statement in The Economist that blockchain is actually a trust mechanism. It is a distributed ledger that cannot be tampered with by the public. The records in this ledger cannot be tampered with by a single party and can be traced. It is such a system that ensures its open, safe and reliable use."

Blockchain has several properties:

1. Data and records can be registered. Once recorded, there is no way to tamper with it if it is on the chain. You cannot change yours to mine;

2. It is not centralized. If it is centralized, if someone changes something in the center, or if there is a hacker attack, the center will have problems and the entire system will be paralyzed. However, decentralization is equivalent to having various nodes. There are about 6,000 nodes in the entire global blockchain, and the number is gradually increasing. They all have common data backup.

Blockchain can be extended to a series of applications, including digital currency with original general ledger transaction records established on the ledger, including asset rights confirmation. Based on its digital characteristics, coupled with the underlying programmability, smart contracts can be implemented to perform some IoT operations. Due to its characteristics of decentralization, openness, immutability, and programmability, blockchain has been sought after by Wall Street in the United States. Chinese blockchain technology companies also play an important role. Blockchain will reshape the world's financial system and economic structure.

Bitcoin and blockchain have a symbiotic relationship, and more and more people are realizing that Bitcoin blockchain has the potential to become the basic chain of multiple blockchain systems due to its largest number of users and the most secure characteristics. Based on this gradual consensus, it is natural for Bitcoin buyers to shift their interest from blockchain to Bitcoin value.

However, as a commodity, the value of Bitcoin is always determined by the supply and demand relationship in the market. Specifically, how to quantify the application value of Bitcoin on the blockchain still requires continuous market adjustment.