Does the blockchain change the nature of money?
As a digital currency based on the blockchain's new information and cryptography technology, it has long been a deep source in the history of monetary theory, and has undergone the transformation of the times, not with the blockchain concept. .
As a lubricant of human society, currency in the true sense begins with the earliest Mesopotamian civilization and has a history of thousands of years. In the long historical evolution, it is actually the value storage property of money. The circulation exchange function has not changed much. In modern society, the rise of the national credit currency, the currency gradually only assumed the value scale and the function of the trading medium. The economists represented by Hayek proposed a revolutionary claim that privately issued competitive currencies to replace the national issue of legal currency. The state even introduced a coexistence system of multiple attribute currencies, such as supplementary currency and alternative currency, which are different from single sovereign currency.
It is the historical evolution of these monetary theories that led to another breakthrough in science and technology in the early 21st century, and when blockchain technology reshaped the human trust ecology, digital cryptocurrencies were able to emerge and gradually evolved into different categories. Presents various forms such as cash attributes, commodity attributes, token attributes with purchase services, and securities attributes similar to those issued by IPOs.
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Only in the current digital currency trading market, the frantic investment has caused the volatility of the currency price. This is actually pushing the road away from the circulation exchange function and becoming a pure speculative scarce commodity. Another function of money is — value storage, and if it only has this function, digital currency will only exist as a financial asset, not a currency.
The test and direction of the future of digital currency is whether it is a private competitive currency, an exclusive currency in the form of digital, a supplementary currency under the coexistence of multiple currencies, a large class of financial assets or just the largest asset bubble in financial history. These are the most optimistic to the least. There is a possibility of optimistic broad spectrum. Therefore, blockchain, as a kind of subversive technological innovation, has pointed out the direction of currency innovation to a certain extent, but it cannot judge the innovation of digital currency equivalent to currency.
How to understand digital currency?
The currency pattern after the emergence of the Internet has developed rapidly, and the Internet-based digital currency has many forms. The earliest and most widely used is the circulation of national currency through the Internet. Like our well-known Paypal, Alipay, WeChat payment, online banking, etc. are all extensions of the French currency on the Internet.
The rapid expansion of Internet business applications, while stimulating the digitization of legal currency, has also created a demand for the endogenous currency of the Internet business ecology. After the success of QQ, Q coins were issued in the ecology. Other large Internet companies have similar virtual currencies, but they are not issued by the national monetary authorities, nor are they collateralized or linked to legal currency, but issued by individuals or companies. The bookkeeping is mainly circulated within its own ecology.
Of course, there are also a lot of virtual currencies that have once exceeded the ecological scope, and even have a certain impact on policy supervision and business cycles, and even caused some confusion. In order to correct the trade chaos, in addition to strengthening supervision, it is the introduction of digital legal currency, and many countries have already made brilliant results. For example, Nigeria and Tunisia have issued digital legal currency, and nationals of the two countries can not only use this to buy and sell goods. It can also pay utility bills, etc. The European Central Bank is also about to issue the euro digital currency ECB-Coin, and the Bank of England commissioned the University of London's research and development currency number RSCoin to complete the test and so on.
From a global perspective, although the digital currency will use the block decentralization mechanism like the private digital currency, it is controlled by the monetary policy to serve the real economy and to prevent the risk of fluctuations in the financial market. The issue will still be "centralized", that is, the central bank will issue and control it in a unified manner, which means that the digital currency will have the nature of national credit endorsement like the current banknotes. For the flow management of digital currency, the central bank will unambiguously borrow blockchain technology, such as decentralized bookkeeping and “peer-to-peer” transactions, to fully realize “decentralization” to facilitate central bank data collection and capital flow. Real-time tracking to prevent digital currency from entering the road.
Digital currency is the new engine of the digital economy
The digital economy is based on digital payments, and digital payments require corresponding digital currencies. Existing digital payment methods do not generate digital currency spontaneously. This requires a new digital currency derivative approach, and only digital legal currency can effectively support the digital economy.
First of all, the digital legal currency is a true digital currency, which can effectively terminate the separation of digital payment from the private scene, and can also open the digital payment of the corporate department and the government department, and open the digital scene of digital payment. Furthermore, digital currency can bring about the occurrence and development of digital statements, promote the occurrence and development of digital finance, and ultimately bring digital financial activities. It is in this sense that the legal digital currency is the new engine of the digital economy.
From the current point of view, China has the most abundant source of digital legal currency, and has a richer scene of digital economy and digital payment. The practice of digital legal currency in China is bound to be based on the reality of digital economic development and trends, combined with the needs of the monetary economy. And related technical conditions. In this regard, China may also have the conditions and should do better and more realistic to enhance and promote the long-term, sustained, effective and strong development of the digital economy.
Original author: Dipperin Pan Pengfei