Interpretation of the essence and context of "digital currency"

Since the birth of currency, with the development of related technologies, its manifestations and operation methods have been constantly evolving, aiming to continuously improve operational efficiency, reduce operating costs, better function and promote economic and social development. Right now, the digital currency that is about to emerge has once again become the focus of public opinion from all walks of life. It started in early 2009, when a brand-new decentralized network "digital encryption currency" - "Bitcoin" was born, and then promoted the concept of various "digital currencies" around the world. From the birth of digital currency, to the "stable currency" linked to a single or a basket of legal currencies, to the development and design of "legal digital currency" by central banks of many countries, the pattern is constantly being refurbished, and it has even become a financial hotspot in which countries compete with each other. However, the coexistence of multiple "digital currencies" just shows that people lack sufficient understanding of the nature and development logic of "currency", and it is urgent to accurately grasp the essence and development direction of "digital currency".  In fact, currency has been moving towards digitization. Throughout the history of world currency, the basic context of currency development and evolution is: natural physical currency (such as special shells, bones, feathers, etc.) - standardized metal currency (gold coins, silver coins, copper coins, etc.) - metal standard paper money (Tokens) - pure national credit currency (also known as sovereign currency, legal tender). The fundamental direction of development is dematerialization and digitization. Among them, with the development of information technology, the form and mode of operation of credit currency are constantly evolving, and the process of cashless and digitalization is accelerating. Mainly manifested in: At present, there are various explorations of "digital currency". The emergence and development of credit currency has greatly enhanced the flexibility of money supply and total control. However, affected by various factors, it is heading towards excessive currency issuance, total loss of control, and continuous accumulation of monetary and financial risks—causing more and more serious financial risks. The direction of the current currency and financial crisis is constantly advancing, prompting people to rethink and explore innovative currency operating systems and mechanisms. Among them, the outbreak of the subprime mortgage crisis in 2007 and the subsequent global financial crisis has promoted the emergence of various "digital currencies" one after another, and there have been great variations. Data/machine intelligence aesthetics pioneer Refik Anadol launched an art NFT that interprets quantum physics: Jinse Finance reported that according to the disclosure of the well-known German gallery "King Galerie" (KÖNIG GALERIE), media artist, director and data/machine intelligence aesthetics pioneer Refik Anadol was at misa. 1,000 NFTs have been sold on the art platform. These NFTs are part of the Refik Anadol series "QUANTUM MEMORIES: NOISE". Refik Anadol used Google Quantum AI quantum computing research data and algorithms to explore the possibility of parallel worlds and developed a Custom procedural coherent noise implementation, utilizing computational surflets beyond classical measurements (Surflets: sparse representation of multidimensional functions containing smooth discontinuities). The piece is inspired by and speculates on the many-worlds interpretation in quantum physics - the theory that there are many parallel worlds that exist in the same space-time as our own. [2021/9/27 17:08:54]According to the order in which their concepts appeared, the current "digital currency" mainly includes the following categories: This raises an important question: Are these all "digital currencies"?   Although there are many concepts of "digital currency", in a strict sense, only "central bank digital currency" can really exist and develop as "currency". This is because: the reason why currency must develop from natural physical currency (including regulated metal currency) to pure credit currency has its inherent logic and laws. The so-called "currency" is the "currency" of "goods", and "currency" is the unit of value and the way of expression, which determines that the core function of currency is the measure of value, which is for goods (and later developed into labor services). Those who exchange services play a role as a medium of exchange. Beam, deputy director of Velo Labs: Interpretation of the layout behind Velo's acquisition of Interstellar: Jinse Finance reported that at 16:00 on March 17th, Jinse Finance and OKEx jointly held the "Since Finance Dialogue with Beam: Interpretation of the Layout Behind Velo's Acquisition of Interstellar", invited Tridbodi Arunanondchai (Beam), vice chairman of Velo Labs, told the story behind the event as a guest. During the live broadcast, Beam stated that Velo's goal is to build a bridge that empowers traditional banking commerce and links it with the latest centralized and decentralized commerce. When talking about the reasons for this acquisition, Beam explained that Velo and Stellar share a common goal and vision, and the two parties complement and empower each other in terms of capabilities. The Interstellar team has deep experience in providing faster, cheaper and more stable cross-border payment solutions for the Stellar network. Therefore, the integration of each other is a very natural choice. This merger will make it a stronger and more influential team in the industry. [2021/3/18 18:56:33] To give full play to the value scale function of currency, it is necessary to maintain the basic stability of currency value. To maintain the basic stability of the currency value, it is necessary to ensure that the total amount of currency in a country can correspond to the scale of tradable social wealth that can be protected by law within the country’s sovereignty, and can change with the increase or decrease of tradable social wealth. , with adjustability and flexibility. In this way, since the actual supply of traditional natural physical currency depends to a greater extent on the natural storage, development or processing of this kind of physical currency, it is difficult to adapt to changes in the scale of tradable social wealth, and it is easy to cause serious problems. Inflation or deflation, even in the trade between countries with different currencies, a serious imbalance in trade can easily lead to a serious imbalance in currencies and lead to mutual wars. Even the paper currency under the gold standard also has the "Triffin problem". Therefore, with the development of the market economy and the growth of tradable wealth, physical currency must withdraw from the currency stage and return to its source of social wealth, and its value also needs to be marked with a new currency. Han Lin, the founder of Gate.io Zhima Kaimen, connected with the top quantitative team across the sea, and deeply interpreted the top fund security solutions: On November 7, Gate.io Zhima Kaimen and TokenInsight jointly held the first island island with the theme of "Sailing Sanya, Quantifying the Future" The crossing race ended smoothly. According to official news, Han Lin, the founder of Gate.io Zhima Kaimen, connected across the sea and shared the top solutions for fund security with more than 20 top quantitative teams on site, and deeply interpreted Gate.io's product planning, technical advantages and brand philosophy The uniqueness of the above. [2020/11/7 11:56:09] Currency must be separated from natural objects and transformed into pure value units or tokens, which can no longer have practical value and can become pure numbers. But the reason why it can be accepted by the society is that a country's currency is based on the support and credit of the entire country's tradable wealth, and is protected by national sovereignty and laws. Therefore, this currency is called "credit currency". , also known as "sovereign currency" or "legal tender". The "credit" of credit currency is the credit of the whole country, not the credit or debt of the government (fiscal) itself, and is not guaranteed by government taxation (taxation can only provide guarantee for government debt). Currency is no longer the credit or liability of the central bank that issued the currency (the central bank no longer promises that currency holders can use the currency to return gold or anything else to the central bank), but more like a legal warrant of the value of social wealth (wealth securities change). From this, it can be affirmed that it is impossible to build and operate a super-sovereign world currency when national sovereignty still exists and the world has not yet achieved integrated governance (Hayek's idea of "denationalization of currency" is difficult to realize) . Specifically: First, the endogenous "digital currency" such as Bitcoin cannot become a real currency in circulation. Compared with gold, Bitcoin is highly closed: the total amount and the new supply per unit time are strictly locked by the system and cannot be artificially controlled. It is difficult to adapt to the growth of social wealth; there is appreciation expectation, which is conducive to speculation, but it violates the law of currency development and operation logic, and it is retrogressive rather than innovative at the currency level. It cannot become a real currency in circulation, but can only be a kind of Invested digital assets, or become "community currency" or "commercial currency" used by specific online communities; as "community currency", it is still subject to financial supervision (the focus is on the exchange link with legal tender, and the custody link can also be added) . Dynamic | Encrypted asset institutions increase investment in software developers to interpret market sentiment through algorithms: According to cointelegraph, with the recent increase in Bitcoin volatility, encrypted asset management companies and hedge funds are increasing investment in software developers , to interpret market sentiment through algorithmic research. Help them interpret and utilize market sentiment signals for higher returns. [2019/7/17] Bitcoin and other purely network-generated "digital coins" are not gold, although they simulate gold, so there are opportunities for speculation, but the risks are very high! The decentralized and fully-enclosed blockchain model adopted by Bitcoin consumes a lot of energy and has low efficiency. It is difficult to solve practical problems, and it is difficult to have vitality. The development of blockchain needs to jump out of the Bitcoin paradigm! Second, the "stable currency" linked to the equivalent value of a single legal currency can only be a token. In the case that only one legal currency can be circulated in a country, it does not mean that it is absolutely not allowed to be given special rights and obligations within a certain range. Tokens" existence and use. For example, in China, the legal currency is RMB, but some canteens are still allowed to have their own meal tickets/cards, some shopping malls have their own shopping vouchers/cards, and some e-commerce platforms have their own points or "Token", but these things only It can be a token of RMB, which can only be used in a certain community or business district (its value depends on the breadth and depth of the application business circle). legal tender. Third, the idea of a "super-sovereign currency" structurally linked to a basket of currencies is difficult to succeed. In June 2019, Facebook released the Libra white paper, envisaging Libra to be structurally linked to five legal currencies, of which the US dollar accounts for 50% (with the SDR currency basket The difference is that the Libra currency basket does not include the RMB, but instead includes the Singapore dollar), and claims that "Libra's mission is to build a simple, borderless currency and financial infrastructure that serves billions of people", which will be composed of Hundreds of large international companies form the Libra core association to manage independently, "making cross-border remittances as safe and convenient as sending text messages." Tonight, Zhu Tao is a guest of "Golden Lecture" to interpret the blockchain industry ecology: At 20:00 on the evening of April 12, "Golden Lecture" invited the chairman of the Blockchain Industry Alliance of the China High-tech Industrialization Research Association and the World Blockchain Organization Mr. Zhu Tao, Deputy Director-General, came to explain the current internationalization of blockchain technology, and shared the direction of how blockchain can effectively realize industrial applications, so that students can deeply understand what the ultimate destination of technology is. [2018/4/12] Based on the fact that the Libra Management Association may have more than 3 billion global users, many people take it for granted that the launch of Libra will be widely circulated and used by users all over the world, becoming a new super-sovereign currency, which will strengthen The international status of the U.S. dollar and the replacement of many non-basket currencies will have a major impact on the international monetary system and the internationalization of the RMB. This has indeed produced a huge sensation, but there are actually many utopian ideas: in terms of currency design, Libra is not more innovative than SDR, even in currency exchange, dynamic control of structure, management of reserves, and handling of exchange gains and losses , There are more difficulties and challenges than SDR in terms of practical use and convenience. The issues that need special attention are: It can be seen that it is easy to launch tokens (such as USDT) that are pegged to the legal currency of different countries and used separately, but it is difficult to achieve a structural peg with a basket of currencies. Even if the International Monetary Fund (IMF) envisages using new technologies to create eSDR, it is also difficult to become a super-sovereign currency and circulate freely in its member countries! To sum up, from a strict "currency" point of view, "digital currency" can only be the digitization of legal tender in the end, and the fundamental development can only be "central bank digital currency". Moreover, the central bank's digital currency can only be the digitization of legal tender, and cannot be another new currency besides legal tender. It is impossible for the central bank's digital currency to imitate Bitcoin, Ethereum, etc. to design a decentralized cryptocurrency (similar to the "petrocoin" launched by Venezuela using Ethereum ERC20, and the LBcoin launched by the Central Bank of Lithuania, etc., it is impossible to coexist with its legal currency, only become a special investment product or collection); it is necessary to adhere to the essence of currency and the basic logic of management (such as the separation of the central bank and commercial banks, the central bank shall not directly issue loans or purchase bonds to enterprises, individuals and governments for currency delivery ), the change can only be the form of currency and its operation mode, system, mechanism, etc., and the goal can only be to further improve the efficiency of currency operation, reduce the cost of currency operation, and strictly monitor currency risks.  Adhering to the principle of active-ethexc innovation, seeking advantages and avoiding disadvantages, the choice of the central bank's digital currency design scheme may be: the central bank's digital currency system is open (open source) to all users (including overseas users), and all social entities (including financial institutions) You can download the system and open the only digital currency "basic account" in the central bank. You need to implement a strict real-name system, register the amount of each digital currency receipt and payment one by one, and keep the timely balance of the account. However, the basic account is only for verification and cannot be used business, no interest. All kinds of financial businesses are still handled by various financial institutions, and social entities can open digital currency "business accounts" in commercial banks and other financial (including payment) institutions, record the changes in creditor's rights and debts and their results when they start their business, and follow the Agreed to accrue interest. Among them, commercial banks also need to open a loan account and a deposit account at the central bank (the deposit account can also be merged with the basic account), and calculate interest separately according to the agreement. The business account of each social entity must maintain a link with its basic account in the central bank, and it can be properly distinguished in the degree of account real-name system.

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