Since its inception, Beijing Digital Technology Co., Ltd. has been working on how to effectively solve the industry's pain points in the “traditional industry + blockchain”. Various projects in the blockchain industry are emerging one after another, and the technology has hit new highs. The hottest topic at present is the “stabilized currency”. Beijing Digital Technology has also supported the stable currency system to bring new development opportunities to the blockchain industry.
What is a stable currency?
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Stabilizing coins, as the name implies, is a cryptocurrency with stable value, and the exchange ratio with the legal currency remains relatively stable. Because the exchange ratio between legal currency and goods and services is relatively stable, the ultimate anchor for stable coins is goods and services, which is the actual purchasing power.
The stable currency originated from the USDT (targeted US dollar) issued by Tether Limited, which was formed by Bitfinex in 2014. The opportunity of birth is that the majority of the market value of the mainstream currency, but the price has strong volatility, making the cryptocurrency market liquidity decline. In this case, investors need to find better means of storing value for their own assets, and the stable currency market will emerge.
The essence of stable currency is a bookkeeping voucher
The modern banking system is based on the central bank, with commercial banks at the top and financial technology companies at the top. Their basic prototypes are mainly derived from the double-entry bookkeeping method that was born 500 years ago. Even after so many years, the banking system has continued to evolve and change, but its core is the centralized bookkeeping system, which relies on the central bank. We transfer money from one account to another, in effect the change in the account is done through the bank. When transferring money by means of stable currency, it is completely transferred from its own book to another book. The essence of the stable currency is a kind of bookkeeping voucher.
Some people will say that Alipay does not apply blockchain technology now? Alipay is an iterative upgrade of this set of books on this basis, which is two different schemes for stable coins issued based on blockchain technology. You see money moving from one Alipay account to another Alipay account, but it is still operating in the central bank's bookkeeping system.
Why is stable currency the future of blockchain?
At present, the main purpose of the stable currency is to provide a channel for the legal currency to enter the world of cryptocurrency, to help the currency users to hedge in transactions, and to provide payment services for blockchain application projects. Although the digital currency market is not too optimistic, the cryptocurrency project is constantly evolving. The number of stable coins in the market has already exceeded 50, and it is still rising. In 2019, it must be a year of stable currency. How does stabilizing the momentum of the currency break through the encirclement of the digital currency? Why is it that the stable currency is the future of the blockchain? This involves how the stable currency affects the blockchain industry.
Tickets for users entering the market
After the "94" in 2017, China explicitly prohibited the market circulation of cryptocurrencies, restricted banks and other financial institutions as payment platforms or channels, and many countries also restricted the circulation of cryptocurrencies. However, there are still many users who want to enter the market, they will choose over-the-counter transactions and trade through the community. However, over-the-counter trading has certain trading risks due to uncertainties, opacity, and small scale. USDT, this kind of stable currency exchanged with the US dollar 1:1 anchorage has begun to become a supplementary solution for the admission of some new funds.
Insurance medium for user assets
In the weak market conditions, Token prices fluctuate greatly, traders do not want to take risks, and do not want to leave. In the case that the trading platform does not support the legal currency transaction, the use of "stable currency trading pairs" for conversion to stable currency is almost The only choice.
The generation of stable coins is the result of the rapid development of Token investment demand, and the contradiction between regulatory restrictions on the entry of legal currency, which has spawned a special historical stage. The more volatile the mainstream currency price, the more valuable the existence of stable currency.
Efficient payment settlement tool for "transaction is settled"
Blockchain technology has great value in the field of payment settlement. With the advent of JP Morgan Chase JMP, many banks around the world have begun to explore how to use blockchain technology to follow the example of stable currency. The “stabilized coins” issued by these banking giants are essentially using a convenient and efficient settlement network based on blockchain technology. The more financial institutions and customer groups that join this network, the greater the value of this settlement network.
With JP Morgan Chase, IBM, and Facebook all revealing that they want to issue coins, the stable currency has once again set off a boom. After the strong fluctuations in the USDT in the second half of 2018, many people sneered at the "unstable currency instability", so PAX, TUSD, GUSD and so on appeared closely behind. It took a long time to seize the market quota of stable coins, but the fierce market competition means that there is not much room left in the market. It seems that there are no more stable coins. Then the major exchanges began to launch their own platform coins, JP Morgan Chase, IBM, Facebook also entered, the situation of stable currency has also changed a lot. Facebook and JPMorgan Chase have both a broad user base and a far-reaching economic impact, and the currency will certainly have an innate advantage. Beijing Digital Technology, which is deeply rooted in the study of the meaning of stable coins, has implemented the practice of stable coins in the fields of postal, supply chain finance, lottery, etc. It is understood that the world's first African blockchain lottery will be released in the near future. So it seems that the stable currency market must be expected (Beijing Digital Technology)