The Research Of Bitcoin’s Nature, Pricing And Regulation

Bitcoin, as an emerging virtual currency, has aroused extensive attentionfrom the date of its birth. It is a web-based algorithm for digital currency,with a limited quantity, non-credit guarantees, trading anonymity, technicalsecurity, trading globalization and avoiding regulation and so on. Bitcointransaction principle, avoids the risks of negative and unstable monetarypolicy of the Central Bank. Compared with the traditional currencies, Bitcoinembraces technology rather than government credit, believes in the power ofliberalism rather than the government. It is a currency reform in the Internetera.However, the development process of Bitcoin also accompanied by alarger controversy. In the current stage of development, its price fluctuationsmake it facing some speculative risk. As a new product, nationalgovernments’ regulations of Bitcoin are relatively deficient, which bringBitcoin a certain regulatory risk such as some tax issues, anti-moneylaundering risk, Ponzi scheme and so on.With the combination of these issues, this paper aims to be a systematicand comprehensive research on the virtual currency of Bitcoin. Firstly, this paper focuses on its basic principles, technical characteristics, also analyzingits value compared to traditional monetary characteristics. Secondly, Bitcoinis currently trading at a huge price fluctuations, leading investors facing hugespeculative risk. This paper uses a variety of methods such as cost method,substitution method, medium exchange valuation method, combined with thehistorical market analysis, parse out the maximum and minimum prices.Based on the pricing factors, we also summarize some practical investmentstrategies for investors. Furthermore, if Bitcoin aim to develop in long-termhealthily, proper regulation is essential factor. In this paper, we start from theresearch of current laws and regulations of the Bitcoin in various countries,explore the regulatory issues of Bitcoin such as tax issue, anti-moneylaundering challenges, the Ponzi scheme and other issues. Finally, we discusswhat will happen in the future for Bitcoin from the view of globalization, theinternet perspective and the digital asset management perspective.With the normative development and controllable risks, Bitcoin will bedeveloped to be a super currency representing the future under thebackground of large-scale Internet payments.