Why go to the central financial system

1. In token economics, decentralized money is not the only object of value circulation and measurement. Therefore, a fixed amount of decentralized money does not necessarily lead to rejection by the market
decentralization in decentralized money contains multiple meanings: decentralization of money issuance, decentralization of money circulation, decentralization of money withdrawal...
as far as our current economic system is concerned, the issuance of money is carried out by the central bank or other similar institutions and endorsed by the national credit. Therefore, the issue of money is obviously a kind of centralized, controlled by the government or institutions. However, in the current economic system, the circulation of money is decentralized
although in our current financial system, the vast majority of money has been circulating through banks, this mode of circulation is mostly controlled by the money owners themselves, that is to say, the circulation of money is not controlled by central institutions. In addition to some specific financial requirements, some circulation has been regulated; Or the judicial organs may intervene and forcibly manage the circulation of money. In proportion, these centralized operations are very few. Therefore, we can say that in the existing economic system, the circulation of money is decentralized< In fact, the central bank and other financial management institutions make use of the power of currency issuance to regulate the whole market and maintain the stability of economic development and currency
we have learned in economics that the total amount of money circulation should match the current trade situation. In other words, the total amount of money circulation is closely related to the economic situation. The circulation of money needs to be regulated to influence the market; And the market also forces the regulatory agencies to regulate the currency through various feedback, so as to maintain the stability of the currency.

2. From the perspective of Internet development, decentralization is the form of social relationship and content generation formed in the process of Internet development, and is a new network content proction process relative to "centralization"
with the diversification of network service forms, the decentralized network model becomes more and more clear and possible. After the rise of Web2.0, the services provided by Wikipedia, Flickr, blogger and other network service providers are decentralized. Any participant can submit content, and Internet users can create or contribute content together
decentralization is a phenomenon or structure, which can only appear or exist in a system with many nodes or in a group with many indivials-- Cloud financial services for you

3. The decentralization of blockchain refers to the form of social relations and content generation formed in the process of blockchain development. It is a new network content proction process relative to "centralization"
blockchain is an important concept of bitcoin. It is essentially a decentralized database. At the same time, as the underlying technology of bitcoin, it is a series of data blocks generated by using cryptographic methods. Each data block contains a batch of bitcoin network transaction information, which is used to verify the effectiveness of its information (anti-counterfeiting) and generate the next block
blockchain is unified in the whole network, so it is logically centralized. From the perspective of architecture, blockchain is based on peer-to-peer network, so it is decentralized. From the perspective of governance, blockchain makes it difficult for a few people to control the whole system through consensus algorithm, so it is decentralized.

4. Compared with the traditional centralized financial system, the decentralized financial platform has three advantages:
A. indivials with asset management needs do not need to trust any intermediaries, and the new trust is rebuilt on the machine and code
B. everyone has access, no one has central control
C. all protocols are open source, so anyone can cooperate on the protocols to build new financial procts and accelerate financial innovation under the network effect
defi is a relatively broad concept, including currency issuance, currency transaction, loan, asset transaction, investment and financing, etc
we regard the birth of BTC and other cryptocurrencies as the first stage of decentralized finance. However, the decentralization of currency issuance and storage only provides a point-to-point settlement solution, which is not enough to support the rich financial business. The rapid development of decentralized lending agreements in the past two years will have the opportunity to further open the financial system of the blockchain world and bring decentralized finance into the second stage<

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5. Hello, it's a great honor to be here to answer your question. The following are some of my views on this issue. If there are any mistakes, please point them out. Start all
and enter the column
almost every supporter of encryption start-ups has a trend, that is, to use the decentralized value of blockchain technology to sell their business fundamentals

in this paper, we will explain the differences between decentralized financial agreement business and traditional business:

we will mainly discuss two aspects:

1) what is the real meaning of defi

2) what are the types and main differences of defi platforms< Users of traditional financial systems often want to build a system that is easier to access, more transparent, lower transaction costs and less dependent on intermediaries. To build such a more equitable financial system, banks, loans and derivatives must undergo fundamental changes. In addition, a decentralized ecosystem, such as defi, is needed. It promotes P2P lending, eliminates centralized control, and provides users with financial freedom

recently, in the field of cryptocurrency, there are many discussions about defi. It provides financial services to the world: loans, derivatives and other procts. Moreover, the role of traditional financial intermediaries has weakened, or even failed to play a role. Proponents of a decentralized financial system see defi as a good alternative to traditional lending. Some have called it the future of borrowing

defi is built on public blockchains such as bitcoin network and Ethereum. It has become one of the "core drivers" on the Ethereum network. By using unlicensed distributed networks, the defi platform converts financial procts into untrusted protocols that can be accessed by anyone anywhere in the world. People who don't have an account in the bank can also use the defi solution to loan and borrow assets, as well as to trade with financial instruments

open source platforms provide users with great benefits, including transparency, cheap cross-border transactions, no credit checks and less censorship. Anyone can carry out financial activities because there is no geographical restriction<

the degree of decentralization of defi

in recent months, the introction of defi solutions has proliferated. They have different models and their degree of decentralization is also different. Compared with other models, some defi models have poor dispersion. This is because only a few of their components are decentralized, while the rest are still centrally controlled by the company

the establishment of agreement, non trust, price supply, determination of interest rate, provision of liquidity of margin call and start-up of margin call are the key components of defi agreement. They determine the degree of decentralization

if there are a large number of decentralized components, then the defi protocol is more decentralized than other models. Such a protocol will give users complete control over their digital assets and get rid of centralized control. So far, there is no single defi protocol that disperses all components

each defi protocol is assigned a category according to the number of distributed components:

centralized finance (cefi)

defi solutions are usually unmanaged, which means that users can control their funds and be responsible for their security. Instead, cefi is hosted. The central system is responsible for keeping the assets of users and ensuring the safety of users' funds

when it comes to loans or loans, users can't control any aspect of funds. The interest rate is determined by the central government, and the liquidity of margin call is provided by the central system or authorities. Cefi procts use centralized price supply, and it is also permitted to issue margin call. Thank you very much for your patience. If you have any help, please accept it. I wish you a happy life! thank you!

6. The design of "decentralization" determines that the "centralized" government cannot touch bitcoin
the emergence, development, amendment, circulation and extinction of bitcoin do not depend on the government, so "whether the government allows" has nothing to do with "whether bitcoin exists"
for example, the birth, development and extinction of the solar system do not need the permission of the government
if bitcoin is exchanged with the government controlled "legal tender" (such as US dollar), the government can influence the performance of bitcoin by controlling the legal tender
if the recognition of such assets reaches the bottom line of% 35 in 2019, the world pattern will be more reasonable, transparent and open

how should we deal with the coming risks- Buy bitcoin quickly to deal with the risk of "no bitcoin".

7. The central bank is the central link of each country's financial system
the international financial system came into being and developed with the continuous expansion of international economic exchanges. As the exchange of goods and services and capital transfer between countries become more and more frequent, the speed of these activities is also increasing. These activities ultimately have to be settled and paid internationally through currency. Therefore, there is a requirement to coordinate the monetary relations among countries in the international scope. The international financial system is formed on the basis of coordinating monetary system, legal system and economic system of many countries.

8. The narrow sense of financial center refers to the financial market which is in the central position in the operation of commodity currency. In a broad sense, financial center refers to the large and medium-sized cities that play a central role in financial activities in the macro geographical region
financial center is the proct of highly developed commodity economy, and its formation must meet the following conditions
(1) financial center is formed with the development of economic center, which is the highest form of economic center. When the development of commodity proction and circulation takes a certain city as the center, on the one hand, a large amount of monetary funds need to seek investment places from the field of proction and circulation; On the other hand, in the field of proction and circulation, a large amount of monetary capital needs to be continuously supplemented for operation. Therefore, only when a city's economic strength is very strong and has become the economic center of a certain region, can it proce, accumulate and use huge amounts of funds, which will lay a foundation for the formation of a financial center
however, the complexity and diversity of financial activities and the huge role of financial forces in economic development make it impossible for financial centers to be as universal as commercial centers and trade centers, that is, not every economic center has the function of a financial center, and only a few economic centers will develop into financial centers. In this sense, financial center is the highest form of economic center
(2) the financial center should rely on the vast economic hinterland to form a developed capital market network. Urban economy itself is not enough to support the formation of financial center. Because as a kind of resource, capital must have a very solid and reliable resource supply place in order to form a huge capital movement and form the center of adjustment in the movement
at the same time, the development of modern commodity economy makes the means of financing increasingly diversified, which objectively requires the establishment of a perfect capital market system and the formation of a developed market network inside and outside the region, so as to make the capital flow in a wider range, so as to improve the efficiency of capital utilization
(3) the financial center should provide perfect infrastructure and create a good circulation environment. Capital movement must be guaranteed by sufficient and fast information services. Therefore, the city is required to provide perfect transportation, communication and other infrastructure, create a good circulation environment, and attract as many banks and financial institutions as possible to operate in the city. Otherwise, the establishment of a financial center can only be a fantasy of the city< The main characteristics of financial center can be summarized into four aspects:
a financial center needs to gather a sufficient number of financial institutions, including banks, securities companies (investment banks), insurance companies and other financial institutions, as well as services or supporting instries related to financial activities
2) with advanced financial facilities, developed financial markets and sensitive financial information, it is the capital gathering and dispersing place in a larger geographical area than the urban area
the good infrastructure, legal system and cultural environment of the central city provide support for the function of the financial center
as the hub of the financial system, it plays an important role in the overall financial system and plays a key role in the overall financial system
three level classification
financial center classification can usually divide financial centers into three levels
(1) world financial center. For example, New York, London and Tokyo, with advanced settlement and payment systems, are large, global and well served centers; It is an international financial center that can support a huge domestic economy, has a vertical and mobile market, in which the sources and use of funds are diversified, and the legal and regulatory system can fully protect the fairness of important agent relations and regulatory functions[ 1]
New York Stock Exchange
(2) International Regional Financial Center. For example, Hong Kong, Singapore and Luxembourg develop their financial markets, financial infrastructure and media funds both inside and outside the region, and their domestic economies are relatively small< (3) national financial center. For example, Shanghai, Chongqing and Seoul mainly develop their financial markets at home, but their influence on international financial markets is relatively weak.

9. The leading role of commercial banks in the financial system is shown in the fact that mixed operation banks have a large number of securities assets. When the liquidity is insufficient, and the residents are in urgent need of money to live in the economic downturn, some small banks are unable to respond to the withdrawal of depositors in time. The crisis of small banks begins to spread to large banks and even the whole financial system, and banks can only go bankrupt in the face of run, This exacerbates the lack of liquidity, There is a vicious circle

it is very difficult for enterprises to operate only with existing funds, so a large number of bank loans and other financing means are needed to inject funds. However, the chaos of the banking system will lead to the exhaustion of funds, and a large number of enterprises can not maintain proction, resulting in the increase of unemployment rate and the continuous decline of people's consumption ability, forming a vicious circle

through the analysis of bank to enterprise relationship By analyzing the transaction cost in the process of financing, we can see that the high transaction cost is an important reason for the current financing bottleneck. Because the credit system can effectively solve the problem of incomplete information and asymmetric information. It can process transaction information on a large scale and efficiently, rece the uncertainty in the process of transaction as much as possible, effectively prevent potential risks and further rece transaction costs, Therefore, building a complete credit system is an effective way to rece transaction costs

so the banking system is very important

I recommend that you read the relevant articles of the financial crisis in the 1930s and the relevant analysis of this financial crisis, and it is not difficult to find out why the U.S. government always rescued the banking system first