The essence of currency is 'something that a certain not small group in society considers valuable, and its value is relatively stable.'
It must
① Difficult to replicate; ② A sufficiently influential group must first acknowledge its value and promote it; ③ Form a snowball effect.
Regarding condition ①, the technology of blockchain inherently has characteristics that make it difficult to replicate and tamper with. Taking Bitcoin as a simple example:
The principle of Bitcoin is that every time a user makes a transaction, a computer helps you keep the ledger and publishes it on the public ledger for all of humanity, then it is verified by the principle of majority rule to determine if you have created false accounts.
Is it possible for it to be completely tampered with?
Theoretically, it is certainly possible. When a person or institution has computing power that exceeds the total computing power of all other miners in the world, this large ledger is dictated by them.
However, this is almost impossible to happen. First of all, it is nearly impossible for any institution to occupy more than 50% of the global computing power. Even if, hypothetically, they had that level of dominance, there would be no need to play with Bitcoin.
Regarding condition ②, with Bitcoin as a representative, the promotion motivation from various groups for virtual currencies is quite strong. Of course, whether they have the 'sufficient influence' you believe in can only depend on individual judgment. Personally, I think this influence is sufficient.
Regarding condition ③, it actually depends on whether virtual currencies have a decisive advantage over the previous generation of currencies. For example, the convenience of bartering with gold, silver, and copper, and the convenience of paper money compared to gold, silver, and copper. Currently, virtual currencies seem to have significant advantages over paper money, such as low transaction fees, ease of cross-border transactions, anonymity, and no physical form that can be lost; however, since they directly bypass traditional powers like banks and governments, these entities are unable to profit from them. Therefore, at a certain stage of development, they will inevitably encounter strong resistance from these traditional forces, which is the biggest risk.
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