The influence of bitcoin on China's monetary policy
When it comes to bitcoin, many people must be familiar with it. According to the latest news, bitcoin's price has now exceeded nearly $30000< the reason for the sharp rise of bitcoin is e to certain economic impact{ RRRRR}
so it also pushed the price of bitcoin to a new high. In the second half of the year, this new pneumonia epidemic has also had a negative impact, so it has also implemented a loose monetary policy for all countries< however, we all know that bitcoin is equivalent to the encrypted virtual currency of a mainstream guy, so at this time, it has become a corresponding investment for many investment institutions who want to fight against inflation so at this time, the price of bitcoin has been raised accordingly, so it is also possible for each of us to carry out corresponding work. All this is e to the current economic situation, which leads to the rise of bitcoin
the bitcoin protocol predetermines the number of currencies in circulation to be 21 million. There are less than 4 million bitcoins left to mine, and with the popularity of cryptocurrency, scarcity seems to have an impact on prices
of course, we also see the price drop e to the same mechanism. Once Nobuaki Kobayashi, the trustee of Mt. GOx, declared bankruptcy, a large number of bitcoins were sold, and the price began to fall as the market was expected to flood< Although bitcoin is the most famous cryptocurrency with the largest circulation at present, investors also have hundreds of other options for cryptocurrencies. Generally speaking, the existence of competitors can guarantee the investment value. Without strong alternatives, such as the euro, the Renminbi or the pound, the value of the dollar would be different. However, the speculative and quasi legal status of cryptocurrency makes it difficult to understand how competition rules will affect pricing
however, as far as the current situation is concerned, bitcoin is still the best in terms of traffic volume, penetration and application. However, with the continuous development of cryptocurrency and the improvement of the ecology of other competitive currencies, bitcoin should also speed up its integration into the society, and always ensure its "big brother" status in order to continue to appreciate
regulatory issues
with the popularity of bitcoin in the world, the regulatory agencies of various countries are also racking their brains to deal with this new species. They must figure out several issues surrounding bitcoin, such as how a country's tax system treats this new currency, whether it should regulate cryptocurrency, and how to regulate it
the two events highlight that regulatory measures will have a significant impact on currency prices. Just after Japan announced that bitcoin would be regarded as legal currency, the price of bitcoin increased by 2% in one day. Over the next two months, the global price of bitcoin soared by 160%. When China announced the closure of several major cryptocurrency exchanges and the ban on domestic ICO, the price of bitcoin fell 29% in one day
although many people think that the legislative provisions are unfavorable to the encryption field, the fact is just the opposite. Although bitcoin has been in existence for nearly a decade, it gained fame in 2017 e to the sharp rise in price. In other words, in the eyes of ordinary people, this is a relatively new field
what a new market needs most is clear, concise and powerful regulations to provide potential investors with some security and a framework they can understand
how regulatory regulations deal with issues that may affect the prices of bitcoin and other virtual currencies. Earlier this year, when China announced a ban on initial coin procts (ICO), the price of bitcoin fell 5%, while eth, the second-largest cryptocurrency by market value, fell more than 12%. This is a clear example of how such a direct regulatory move could have a huge impact on the price of the bitcoin
to sum up, the most important factor affecting the price trend of bitcoin is market sentiment. If you can grasp the trend of market sentiment, you can grasp the trend of bitcoin price.
bitcoin is stored in a digital wallet. You can store it on your local hard disk or mobile phone, or in a variety of online bitcoin exchanges. Keeping bitcoin locally is like hiding money under a mattress. If something goes wrong with your digital wallet, your money will be gone
to remit or collect money, you need to point your bitcoin client or network exchange to a bitcoin address, which is the address of every wallet. After a few minutes, bitcoin will generally leave your wallet and enter the other person's wallet. There are few sites that accept bitcoin, but there are a few. It's more difficult to use bitcoin in real life, but it can be achieved through some systems
what is the impact of bitcoin on the economy
despite all kinds of problems, the soaring price of bitcoin is partly e to more and more people using it. Bitcoin fans believe in its future. Ordinary people are also graally interested in cryptocurrency, but because it is too complex, it is difficult to popularize in the mass market. If it is really popular, the fluctuation of bitcoin's value will lead to greater turbulence in the global economy
if you bought $1000 bitcoin in 2010, it's worth about $35 million now. But if you buy $1000 bitcoin in early 2014, you'll only have a quarter of your purchasing power a year later. How would you feel if you paid with bitcoin and found that you could only buy half of what you had a few days ago
this kind of inflation is unstable, but if it is used in parallel with the government supported currency, bitcoin does have some advantages. Few people will exchange all their assets for bitcoin.
the central bank has now made it clear that it will issue digital currency, and has completed two revisions. Of course, the digital currency to be issued by the central bank is different from the tokens launched by bitcoin, Leyte and European crowdfunding platforms. The digital currency issued by the central bank has the property of currency.
Digital currency is a double-edged sword. On the one hand, the blockchain technology it relies on has been decentralized and can be used in other fields besides digital currency , which is one of the reasons why bitcoin is popular; On the other hand, if digital currency is widely used by the public as a kind of currency, it will have a huge impact on the effectiveness of monetary policy, financial infrastructure, financial market, financial stability and so on. Specific Wu Xiaoxia:
1. Impact on monetary policy
if digital currency is widely accepted and can play the role of currency, it will weaken the effectiveness of monetary policy and bring difficulties to policy-making
because digital currency issuers are usually unregulated third parties, money is created outside the banking system, and the amount of circulation depends entirely on the wishes of the issuers, which will lead to the instability of money supply. In addition, the authorities are unable to monitor the issuance and circulation of digital currency, which will lead to the inability to accurately judge the economic operation and bring trouble to policy-making, At the same time, it will weaken the effectiveness of policy transmission and implementation
2. Impact on financial infrastructure. The use of distributed ledgers also poses challenges to trading, clearing and settlement, as it promotes the disintermediation of traditional service providers in different markets and infrastructures. These changes may have potential impacts on market infrastructure other than retail payment systems, such as large payment systems, securities settlement systems or trading databases
3. The impact on financial intermediation and financial market in a broad sense. As a financial intermediary, banks perform the ties of acting supervisors and supervise borrowers on behalf of depositors
generally, banks also carry out liquidity and maturity conversion business to realize the financing from depositors to borrowers. If digital currency and distributed ledger are widely used, any subsequent disintermediation may have an impact on savings or credit evaluation mechanisms
4. The impact of security risks and financial stability
assuming that digital currency is recognized by the public, its use increases significantly and replaces legal currency to a certain extent, negative events such as network attacks on user terminals related to digital currency will lead to currency fluctuations, which will have an impact on the financial order and the real economy
in addition, the virtual currency based on blockchain technology is usually held by a few people at the beginning. For example, the first purchase of bitcoin in May 2010 was $25 pizza purchased by 10000 BTC, and the price of each bitcoin rose to $1200 in more than three years by the end of 2013
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extended materials
Amazon will launch digital currency project in Mexico. Amazon is recruiting software development managers for digital and emerging payments (DEP) to develop new payment procts that will enable customers to convert cash into digital currency
the digital and emerging payments sector intends to launch the proct in Mexico first. The follow-up will be extended to Brazil and India. It is reported that the digital currency project will completely focus on payment services in emerging markets
now let's take a look at the properties of bitcoin: bitcoin is a consensus network, contributing to a new payment system and a fully digital currency. It is the first decentralized peer-to-peer payment network, which is controlled by its users without a central management organization or middleman. From the user's point of view, bitcoin is much like Internet cash. Bitcoin can also be regarded as the most outstanding three style bookkeeping system
bitcoin is valuable because it is useful as a form of currency. Bitcoin has the mathematical characteristics of money (persistence, portability, interchangeability, scarcity, separability and identifiability) rather than relying on physical characteristics (such as gold and silver) or the trust of central authorities (such as fiat money). In short, bitcoin is backed by mathematics. With these characteristics, a form of money to have value requires trust and use. In contrast, this can be reflected in its growing base of users, businesses and start-ups. Like all currencies, the value of bitcoin comes directly from people who are willing to accept it as a means of payment, which is the only source.