Popular science | Can't tell the difference between electronic money, virtual money and digital money? look here!

Author: Boots

Source: 52cbdc

The electronic money used for WeChat and Alipay platform transfers, the central bank's digital currency DCEP issued by China, the encrypted digital currency Libra launched by Facebook or 2020, and Bitcoin, Ethereum, which are risky in the market based on technologies such as blockchain, There are QQ coins that have been charged on the Tencent platform, as well as game gold coins in the glory of the king. What are these "coins"? How to classify? How to distinguish? look here!

What is electronic money?

Electronic money refers to the use of a certain amount of cash or deposits to exchange and obtain data representing the same amount from the issuer, or to transfer the balance in the bank through some electronic channels through fast payment services launched by banks and third parties To enable transactions. The strict meaning is that the consumer uses the bank's Internet banking service to make stored value and fast payment to the issuer of electronic money, and enables consumers to conduct transactions in electronic form through the medium (two-dimensional code or hardware device).

The definition and explanation are complicated, but what electronic money is actually is a currency paid electronically. This currency is stored electronically in the electronic equipment you hold. Its essence is the electronicization of legal currency. That is, you use WeChat payment, Alipay, or online banking and other online electronic payment platforms to perform transfer transactions, and the transaction currency stored, used and circulated in these online electronic platforms is the so-called electronic money. Electronic money is easy to use, safe, fast and reliable. It can be widely used in the fields of production, exchange, distribution and consumption.

In our daily life, because of the further development of electronic payment technology and the increasing and comprehensive consumption scenarios covered by electronic payment methods, our daily transactions are more efficient and convenient, and it is also unnecessary to carry and use cash. Trouble with paper money. Whether it is deposit and wealth management, loans, transfers, large-scale consumption, or our daily online consumption or social transfers, electronic payment methods and electronic money transactions have become the payment methods of choice for many people.
What is virtual currency?

As its name implies, virtual currency refers to non-real currency. We divide the virtual currencies currently on the market into three categories:

The first type is game currency developed by game operators for players to purchase virtual goods such as game items in the game. For example, to play King of Glory, you need to obtain game gold coins by completing game missions to purchase heroes, skins, and inscriptions in the game to improve combat effectiveness. Such game coins can only be used in the relative game system developed by the game operator.

The second type is a special currency issued by a portal or instant messaging service provider for purchasing services on this website. For example, Q coins, as we know it, can be used to purchase value-added services such as QQ membership and QQ show. This type of currency is only for internal use by network companies. Its credit protection comes from the credit endorsement of the issuing company. It only supports the single circulation of fiat currency to virtual currency, so it does not have the ability to act as a fiat currency as our daily payment method.

The third type is the virtual currency on the Internet. In fact, it is also a type of digital currency. We will put the digital currency classification below to make a detailed distinction for everyone.

What is digital currency?

Digital currencies are divided into encrypted digital currencies and central bank digital currencies.

Encrypted digital currencies are Bitcoin, Ethereum, OK coins, etc., as we know it. It is based on the blockchain network and digital encryption algorithms to ensure transaction security and control the transaction medium created by the transaction unit. It can be used to exchange fiat currencies, purchase certain goods and services, or be used for Internet financial investments. It is characterized by low transaction costs, no trusted third-party institutions, fast transaction speeds, no centralized institutions and clearing and settlement institutions, and the ability to protect privacy and achieve high anonymity.

In fact, encrypted digital currency is very close to the transaction currency used in our daily life, but its issuing institution is not issued by the monetary authority, does not have monetary properties such as legal compensation and compulsory, and is not a real currency. Earlier, the People's Bank of China and other departments also issued relevant notices and announcements regarding this type of currency, stating that it does not have the legal status equivalent to currency and cannot and should not be used as currency in the market. Citizens invest and trade virtual currencies. Protected by law.

The crypto digital currency Libra, developed by the world's social giant Facebook or about to be launched, has attracted worldwide attention and tension. They want to break through this obstacle. They want to build their own payment system that can cover the world. In this system, Libra acts as a transaction medium, anchors the legal currency of a certain country, can also be exchanged for the legal currency of each country at any time, and circulates worldwide.

Once the crypto digital currency project of Facebook, a social giant company, has been substantially promoted, or it has caused great changes and shocks in the world financial system, it has caused central banks' attention and research and development of digital currencies. . So what is a central bank digital currency?

Central bank digital currency
The central bank digital currency is a national credit-based, centralized digital currency developed and launched by the national central bank. It has monetary properties such as legal compensation and compulsoryness. It is money in the true sense. It is the electronic form of fiat money, and it is also a change or evolution of the existence form of fiat money.

Just like from the exchange of goods and materials, to the use of shells, to precious metals, to paper money, and now to the era of digital currency, currency as a general equivalent needs to take into account and bear the functions of low cost, high efficiency, convenient circulation and stable value. Role, so with the changes of the times and the maturity and popularity of Internet technology, electronic money has become a future trend.

Compared with traditional banknotes, central bank digital currencies have many advantages. Firstly, digital currency can effectively reduce the cost of currency issuance and circulation, and improve efficiency; then because digital currency is based on Internet technology, it can accurately grasp the currency circulation in the market through big data analysis, helping the country to formulate and implement a more accurate and effective monetary policy; Finally, digital currency is conducive to the development of inclusive finance, allowing more people to enjoy convenient and comprehensive financial services. At the same time, it is of great significance in promoting the circulation and internationalization of domestic currencies, breaking through the hegemony of the US dollar, and unilateral sanctions.

That's all for today's popular science. Can everyone distinguish between electronic currency, virtual currency and digital currency now? The times are advancing and technology is developing. The only thing that can be determined for the future is its uncertainty! The framework of digital currency has already taken shape. It embraces the future and embraces digital currency.