How to apply for BTF digital currency

1.

About bitcoin, the news is flying all over the world these two days

specifically, a foundation called BTN foundation announced that it has set up a bitcoin bifurcated development team to launch a new bitcoin bifurcated BTN. Now its official website is online, which is called btn.kim. Two days later, bitgo, another bitcoin development team, announced that it would fork out from bitcoin. Its name is BTF, which literally means "bitcoin faith"

according to Yao yuan, a well-known bitcoin columnist, bitcoin will "have 10 children" in December, and will at least bifurcate out of 10 "children" such as BCX, SBTC and LBTC

as soon as these things happened, the bitcoin market began to fluctuate again, some investors blew up, and all kinds of rumors came out: why so many forks? Is bitcoin out of order

in fact, the bifurcating of bitcoin is far more complicated than what it shows. If we don't explain its historical background clearly, we really can't understand what happened

< b > the origin of bifurcations: the origin of the bifurcations of bitcoin has existed. The so-called bifurcations refer to the accounting differences caused by different underlying protocols. According to Xue Hongyan, director of the Internet financial center of Suning Financial Research Institute, bitcoin is jointly maintained by a number of point-to-point decentralized nodes. The orderly operation of the whole system depends on the consensus of all nodes, that is, there is a set of recognized standards for key issues such as which transactions are acceptable and which nodes have accounting rights. This set of standards is deployed in the underlying protocol of blockchain and implemented automatically

but nodes are operated by people after all, which is the so-called "miner", but everything operated by people will be different. For example, the miners of some nodes go online every day, while the miners of some nodes go online occasionally; Some nodes are in the eastern hemisphere, some nodes are in the Western Hemisphere... In a word, e to various reasons, over time, bitcoin has different underlying protocols in different nodes

if different versions of underlying protocols are running in a node, different standards will appear, which will result in bifurcation. If the nodes can deal with these version differences and finally form a unified standard, the bifurcation will eventually disappear, which is called soft bifurcation. If the difference cannot be eliminated, when some nodes continue to run different versions of the protocol, the bifurcation will continue, which is called hard bifurcation

it's easy to solve the problem of soft bifurcation, that is, if the account book is wrong, just modify it. Hard bifurcations are not easy to solve. No one thinks he is wrong and explains them according to his own standards. In the end, he can only go his own way and keep his own account. At present, bitcoin bifurcation refers to hard bifurcation

< b > the first bifurcations: the first hard bifurcations of bitcoin technology upgrade are purely technical reasons. The settlement performance of bitcoin itself is limited. According to the original technical agreement, bitcoin can only support up to seven settlements per second. This was not a problem in the early days. With the fire of bitcoin, more and more people flocked in, and the settlement became more frequent than ever. At this time, the original technology was not enough

therefore, in the middle of 2017, some miners proposed new technology agreements, but the other miners did not agree with them. Eventually, both sides held one end and ran their own underlying agreements, which was the first bifurcation in the history of bitcoin

However, with the development of bitcoin trading means, speculators graally regard the bifurcation as a means of money collection, which leads to a great change in the nature of the current bifurcation

the principle is that each bifurcation is essentially equivalent to the issue of a new digital currency, which is linked to bitcoin. The target audience is larger than the general ICO, and it is easier to be accepted by ordinary users than issuing a new digital currency directly

because the team that creates this kind of bifurcation takes the lead, it is very easy to control the transaction of the new currency, especially in the early stage, and it only needs a small cost to control the price trend of the whole currency. This leaves a lot of room for speculation. The forked team only needs to make the new currency accepted by the users, and then it can artificially raise the price to a sky high price. After the real users come in, they can sell all the money they hoard, and get high profits out of thin air

on October 25 this year, a domestic team forked out bitcoin gold (BTG). Two days before the forking, Jiang Zhuoer, CEO of leibitchi, denounced the forking as money looping: "Liao Xiang, founder of BTG, had g 200000 BTG coins in advance before the forking, and wanted to convert them into 20000 bitcoins, looping 80 million yuan."

The advantage of bifurcations can be seen, so that the word "bifurcations create value" has become popular in the field of currency speculation. For this reason, a new word "IFO" - first token issue has been derived

He Sheng, a well-known financial blogger, once told the media that most of the so-called IFO may evolve into the operation of collecting money by harvesting leeks. "Many previous ICOS are doing IFO, and ICO needs to write a white paper and go to the stock exchange to gain market recognition, while IFO does not even need to write a white paper."

this also explains why bitcoin is becoming more and more profitable. To put it bluntly, everyone wants Nakamoto

Can

< b > not bifurcate

whether it's Hong shuning of Suning finance, or Mike & Chen, CEO of bitgo, a bitcoin wallet software provider and one of the project leaders of segwit2x; Mike belshe, the instry actually refuses this bifurcation of bitcoin. In fact, real blockchain practitioners have always hated speculation. At present, the leading enterprises in the domestic blockchain instry have clearly expressed their opposition to the overflow of bitcoin bifurcation. For example, when Xunlei launched the first popular blockchain project in China, its CEO Chen Lei said in an interview: "Xunlei opposes all speculative activities using blockchain, so it is definitely against bitcoin for the purpose of speculation and leek cutting arbitrage."

However, to solve this problem, it is not enough to have an attitude alone, but to have specific means. The best way is not to let bitcoin bifurcate

this is difficult to achieve. Bitcoin's own technology is a relatively primitive blockchain technology with limited computing power. It can barely cope with the previous transaction scale. In view of the current situation of bitcoin fire, it is difficult to support. So sooner or later bitcoin will have to solve the problem of its own computing power

but there is no hope at all. With the innovation of blockchain technology, there will always be some new ways. For example, the shared computing proposed by Xunlei can effectively improve the total amount of computing power and rece the cost per unit of computing power without changing the existing hardware facilities. If bitcoin is combined with shared computing, it can effectively solve the problem of bitcoin's computing power limit without new bifurcation

secondly, the bifurcations for the purpose of cutting Chinese chives can be supervised by means of supervision. For example, compared with the real name system of special currency wallet, the real name system of transactions can effectively prevent the risk of Financial Bureau. At present, the real name system has been implemented in some blockchain projects, and has achieved good results. For example, Xunlei's blockchain is the first blockchain application to introce the real name system in China, which basically eliminates the hidden danger of malicious speculation

in a word, there is a way. It depends on whether bitcoin players accept it or not, and there is a process to implement it. It takes time. Therefore, at this stage, it is better for us to stay away from the bifurcations of bitcoin in various names

2.

what is bitcoin ETN? Bitcoin ETN is bitcoin exchange traded notes (bonds)

ETN, that is, exchange traded bonds or exchange traded notes. It is a kind of unguaranteed creditor's rights. The issuer promises to pay investors a certain amount to the holders at the maturity of the bonds. The payment amount is based on a specific market index, minus the necessary fees, and does not pay fixed interest, And the principal is not guaranteed

bitcoin ETN is a bill (bond) traded on bitcoin exchange, which allows users to participate in investment by tracking the price trend of bitcoin. What users hold is the promise to cash their funds according to their price index over a period of time. At the same time, it is also a very efficient hedging tool

after investors purchase bitcoin ETN, they do not need to hold bitcoin directly. The company will hold bitcoin on behalf of investors, which reces the investment risk of investors. As an investment tool, it greatly widens the channel for institutional investors to invest in cryptocurrency

is bitcoin ETN and ETF confused

so, what are the differences between bitcoin ETN and bitcoin ETF

the procts of bitcoin ETN and ETF are similar in that investors can invest in bitcoin without holding bitcoin directly; Second, in view of the characteristics of cryptocurrency price fluctuations, both of them have solved the worries of investors when they invest in cryptocurrency; Secondly, both can effectively attract more investors and bring more capital inflow; At the same time, both have the credit endorsement of traditional financial institutions, which greatly reces the investment risk of investors

First, unlike ETF, ETN is a bond trading tool, which is guaranteed by the issuer and not supported by other assets. The issuer is usually a bank rather than an asset pool. It is more like a debt instrument supported by a bank or any other credible issuer

Second, bitcoin ETN allows users to participate in investment by tracking the price trend. What users hold is the promise to cash in accordance with their price index over a period of time. Bitcoin ETF is a trading open-end index fund set up with the bitcoin price index in a certain market as the target index, similar to gold ETF. In addition to the ETF investors who are the beneficiaries of the trust, there are also three important subjects: the sponsor, the trustee and the custodian. They will sign the trust contract and perform their respective ties according to the contract

Thirdly, different from ETF using a basket of stocks for redemption, ETN using cash for redemption will be subject to some restrictions, resulting in low timeliness. The arbitrage efficiency of ETF is lower than that of ETF because of the non physical redemption characteristics, so the discount premium rate is generally higher than that of ETF

The successful entry of ETN procts into the U.S. market can make it easier for investors holding US dollars to invest in bitcoin related procts, which undoubtedly increases the attraction of digital currency as an investment asset

the regulation of ETN, a cryptocurrency listed on the stock exchange, fully shows that bitcoin is officially recognized as a legal asset class. In addition, as an investment tool, it greatly widens the channels for institutional investment to enter cryptocurrency investment

after ETN enters the market, what is the response of bitcoin market

it was once believed that bitcoin price would soar all the way when ETF passed and a large number of institutional investors entered the market. ETN is regarded as the "soft" substitute of bitcoin ETF, which is the dream of the public. ETN allows us dollar holders to invest in bitcoin without holding bitcoin. In principle, this should be a big event that can drive the market, but in fact, the market response is not big, and it does not attract many US investors and the Wall Street capital they are fighting for, This is a strange phenomenon

Jeff kilburg, founder and CEO of KKM financial, explained that the price of bitcoin will continue to fluctuate until the application for ETF is finally answered, and ETN will not have much influence

Bart Smith, head of the digital assets Department of Susquehanna International Group, a global investment market giant, is optimistic about this. He said that ETN has had a certain influence on the market, but it is far less explosive than ETF

there are also views that in order to make ETN procts more competitive, investors need to persuade their brokerage account providers to provide bitcoin ETN services on their platforms. According to the reaction of many investors, their brokerage account suppliers say that they do not support cxbtf (bitcoin tracker one's transaction code) transactions at present, or they need to perform more complicated steps to carry out transactions

ETN is neither regulated by SEC nor registered with SEC, so its influence is far less than that of ETF

although US investors can now invest in bitcoin through ETN and some institutional exchanges, bitcoin has not yet reached a new height. Most cryptocurrency market investors still hope that regulators can approve bitcoin ETF to enter the U.S. market, because they believe that this will promote bitcoin to be adopted by more mainstream funds, including wall street, and will cause a large-scale price rise. In addition, the SEC continues to consider various applications for bitcoin ETFs, so there are still a lot of hype and excitement about the ETFs that may pass