Many diehard fans of digital currencies believe that digital currencies such as Bitcoin are gold or property rights, and the amount is rare and limited. Therefore, many people hold a large number of digital currencies and rarely hold cash, because they believe that cash must depreciate in the long run. , And digital currency is the future!
But I have to face a very real problem. The application rate of Bitcoin in reality is still very low and cannot be used for real-life payments. The main application in the real world is legal currency. Utilities and electricity and temporary capital turnover require legal currency. To pay. What should I do if I don’t want to sell coins when there is a real emergency?
The bear market is when a lot of big guys acquiesce in their layouts, and they have no choice but to have a full currency, and what if the legal currency turnover does not open and miss the freedom of wealth?
Bitcoin is equivalent to real estate
What do you do when you have an unused house in the city, but you are in a hurry for money? Real estate in the urban area is rare, you will never sell the house to cash out, because the future may mean that you need to spend more money to buy this house.
If it is only a small amount of money, you can choose to rent out and get a stable income every month. If it is a large amount of money, you will choose to pledge to the bank to obtain a loan, the house is still there, and you get a cash reserve.
The logic of Bitcoin is the same. It is rare enough, it must rise for a long time, and it may take more money to buy it after it is sold. But holding bitcoins without financial tools similar to real estate will result in extremely low capital utilization of bitcoins and fail to give full play to the value of bitcoins.
Can Bitcoin be rented or pledged like real estate?
Many individuals and institutions have emerged on the market to borrow money against coins. You can lend bitcoin or other digital currencies to these institutions. However, most of these institutions and individuals are centralized. The fatal risk of renting or staking Bitcoin is: Bitcoin is transferred and you may lose the principal of Bitcoin.
Centralized bitcoin pledge lending, take your bitcoins with low interest rates, and use them for quantification, there may be the risk of losing the principal. At present, the entire Bitcoin pledge market has not yet seen a platform with sufficient reputation. Pledge lending depends entirely on the risk control capabilities of centralized institutions. In addition, the pledge rate and interest rate are mostly single modes, which cannot meet the needs of diverse users.
However, it is worth mentioning that the industry infrastructure has been continuously improved and strengthened since the development of blockchain, and corresponding financial services are constantly emerging, such as DeFi, liquid mining, lending, wealth management, insurance, etc.
Judging from the status quo, if you want to mortgage bitcoin and other digital currencies like real estate to obtain cash flow, it is completely fine. For example, the industry leader in financial services, Morecoin mushroom digital asset financial service platform, provides comprehensive services The process can effectively help you obtain liquidity.
That is to say, in Morecoin, user A with cash can borrow cash from user B with bitcoin, and bitcoin is pledged on the platform and locked in the wallet address to achieve rigid payment.
Security still needs attention
The emergence of pledge lending has provided industry users with more liquid cash flow and improved the utilization rate of everyone’s funds. However, we still need to pay attention to security issues. After all, there have been many hacking incidents in the blockchain industry. Or the platform insists on stealing itself. As investors, we must keep our eyes open.
So how do we, as users, look at the security of the platform? After all, we don’t understand the code. So here, we can refer to the following points:
1. Whether the platform code has passed a third-party security audit. At present, the most well-known blockchain security team in the industry is SlowMist Technology. Generally speaking, if the platform code passes the SlowMist security audit, then there is a certain degree of credibility in security issues.
2. Multi-signature mechanism. In the blockchain world, users transfer assets through private keys, and absolute control of assets is in their own hands. The same is true for platform institutions, which need to control assets through private keys. There will be a problem here. If the private key is only stored in the hands of one person, and the platform funds reach hundreds of millions, one billion or even tens of billions of dollars, will the person who holds the private key be tempted to keep the private key and steal the user directly? The assets of users, resulting in permanent loss of user assets.
Therefore, as a platform party, a multi-signature mechanism must be required, that is, multiple different nodes jointly manage the private key. Any changes to platform assets can only be executed after multi-signature nodes are jointly authorized and agreed, which greatly improves the security of user assets and further reduces the possibility of evil on the platform.
Therefore, if a platform uses a multi-signature mechanism, it is more credible than a platform without a multi-signature mechanism. As mentioned before, Morecoin uses multi-signature.
Conclusion
The last thing to say is that Bitcoin and other digital currency markets are still in their early stages, and the market opportunities are diverse, but at the same time, various tricks, temptations, and risks are everywhere. You must keep your eyes open and avoid various minefields. Realize the steady appreciation of assets on a safe basis.
Author: Morecoin, Website: www.morecoin.com, please indicate the source.