Zhu Jiaming: Digital currency may completely change the aggregate demand supply framework of money

On September 20th, the 10th New Moganshan Conference was held in Moganshan, Deqing County, Zhejiang Province. Zhu Jiaming, an economist and academic advisor at the Institute of Digital Assets, attended and delivered a speech entitled "Digital Currency and Complex Science." He said that digital currency has intensified the complexity of the contemporary economy and society, and the emergence of digital currency is likely to completely change the equilibrium framework of the "total demand" and "total supply" of money.


Zhu Jiaming said that we need to use a new mode of thinking to understand the digital currency and its impact and challenges. In his view, digital currency is a new form of money, not a simple transplant of traditional money, nor a direct reproduction of traditional currency, which has already broken through the limitations of traditional currency context.

Zhu Jiaming also said that the digital currency has independent vitality. "People should realize that it is difficult to control digital currencies like traditional currencies." Zhu Jiaming said that humans have never created a currency, like digital currency, which is characterized by rapid proliferation, expansion and division. From Bitcoin to the present, there are at least 2,000 digital currencies traded online.

The following is a highlight of the speech:

My topic is "Digital Currency and Complex Science", and I hope to understand the nature and basic characteristics of digital currency from the perspective of complex science.

First of all, I wrote this passage: "Because of the multi-source, multi-factor, multi-dimensional and diversified features of digital currency, it will greatly enrich the complex science: on the one hand, it promotes people to gradually recognize that the digital currency itself is a complex system. Seeking the mathematical and other scientific expression patterns of digital currency; on the other hand, pushing people to deepen the change of thinking mode because of the complexity challenges raised by digital currency."

I hope that everyone understands digital currency as a very important complex economic phenomenon in the contemporary world. It needs a new way of thinking to adapt to such a complex phenomenon to understand the digital currency and its impact and challenges.

I am going to talk about four questions.

The first question: Digital currency is a "mutant" currency derived from the genes of technology technology. Since 2008, the economic world has begun to exist in two currencies: a currency that has evolved from the birth of human society to today, and eventually became a well-known legal currency.

The digital currency that is now concerned and discussed, in essence, is not the evolution and derivation of traditional currency, it is an unnatural evolution, and it is the first human initiative and the currency designed through cross-science participation. A currency dominated by scientists, not economists, financiers, industrialists, and politicians.

In short, digital currency is a new, very unique form of currency. The history of digital currency is very short. Until now, the history of digital currency has been around 11 years.

Because digital currency is a currency designed by people based on science and technology, its genes are built from the beginning in mathematics, cryptography, and related science and technology, blockchain, or digital currency is algorithm and code, the Internet, Blockchain and big data serve as the currency of the infrastructure. The historical and technical premise of digital currency is computer language, which is the 0-1 algorithm, not the electronicization of simple traditional currency. It can also be said that digital currency is the financial form of Cyber, especially a kind of "super text". Not only that, the digital currency has a very clear and extremely strong goal orientation.

Re-emphasize that digital currency is by no means a simple transplant of traditional currency, nor is it a direct reproduction of traditional currency. Because of this, it has been difficult for people to use the currency history they have learned in the past to simply deduct a brand new monetary form based on human initiative design with a strong goal orientation.

In this case, traditional monetary theory, neoclassical, Keynesianism, neoclassical extension of Friedman “monetism”, or new monetary theory (MMT), is not enough to explain the current digital currency, creating a tradition The overall loss of monetary theory. Of course, the theory of digital currency is still in the process of being formed.

The second question: Digital currency is a currency that changes the "paradigm" of traditional currencies. Compared with traditional currencies, the form of digital currency has changed and the definition has changed. Some of the functions of the traditional currency have been learned in textbooks. Obviously, they have not fully reflected the impact and changes brought about by the digital currency.

In fact, what is more important is that the structure, model and language system of traditional currencies have changed. Digital currency has led to a new set of conceptual systems and the emergence and development of discourse, which has already broken through the limitations of traditional currency context. This reminds us that Einstein's theory of relativity represents a new set of discourse systems. It is impossible for classical classical physics to continue to describe and express the new physical world proposed by relativity. We are now facing the same problem.

The third question: Digital currency is a currency with the characteristics of “self-maintaining”. After the digital currency is created, it begins to rapidly form autonomous vitality, as well as the mechanism of evolution and evolution. Digital currency has the common characteristics of science and technology and has independent vitality. In other words, digital currency has been and is becoming a "subject." People should realize that it is difficult to control the digital currency as much as the traditional currency.

The digital currency, which is still in its developmental stage, already has the ability to store and analyze information processing. What's more important is that digital money is inherently built on decentralized self-organizing foundation capabilities, and can be connected through nodes to complete transactions. The original function of Bitcoin was peer-to-peer direct trading. The evolution of Bitcoin after more than ten years of development proved that it has strong self-organization ability.

In particular, the digital currency represented by Bitcoin shows a dual self-organization ability: on the one hand, through self-organization, creating communities; on the other hand, these created communities and organizations will strengthen the original self-organization ability of digital currency. .

It is also fully noted that digital currency is a relatively fast-growing currency. Humans have never created a currency, like digital currency, which is characterized by rapid proliferation, expansion, and division. From Bitcoin to the present, there are at least 2,000 digital currencies traded online. Why emphasize this? The self-organizing ability of digital currency leads to its unique vitality, which is increasingly independent of government or social subjects and does not depend on enterprises.

The fourth question, digital currency, has exacerbated the complexity of the contemporary economy and society. In the field of traditional monetary theory, is there a long-standing debate about whether the currency is “neutral” or “non-neutral”, is it an “exogenous variable” or an “endogenous variable”?

In the past decade, with the gradual deepening of digital currency, people's economic activities, their "non-neutral" and "endogenous" characteristics are very strong, and the two overlap. Because of the emergence of digital currency, it is likely to completely change the equilibrium framework of the “total demand” and “total supply” of money. Not only that, but the digital currency also stimulates and creates new interest structures, transforms the original financial order and ecology, and acts on and penetrates the microeconomic and macroeconomic boundaries. In addition, digital currency is subject to the influence of the so-called power rate, which is bringing very clear uncertainty to the future.

Observing the history of digital currency, digital currency has the characteristics of “emergence” described by complex science, and people cannot immediately grasp the “full picture” of digital currency. However, from Bitcoin to Ethereum to Libra, digital currency will be the typical "whole overall than the sum of parts."

It can also be observed that the digital currency has gone through two stages. In the first phase, digital currency needs to be integrated with the original economic system, trying to integrate with traditional finance and traditional industries. In the second stage, digital currency is forming a climate, self-contained, and is attracting traditional economic forms into the digital Among the monetary system, there are signs that dominate the evolution of the entire economy and society. Libra's progress from white papers to future implementation, whether successful or not, is a case in which digital currencies that deserve continuous attention affect the world economy.

The conclusion is that digital currency was born and grown because of the development of the digital economy; the digital economy expanded and expanded because of the maturity of the digital currency. So we are entering a more complex economic and ecological environment, and digital currency is here to become the most important and most persistent, one variable that is constantly evolving. The digital economy and digital currencies are forming an increasingly "two-way movement."

My conclusion is that if the 21st century is a century of complex human society and economic and social life, then digital currency will be the core of this complexity.

Article source: Sohu think tank

Original link: http://www.sohu.com/a/342454516_100160903