Does digital currency belong to financial industry

5. Blockchain belongs to it technology, and finance is an application direction of blockchain
the core advantage of blockchain technology is decentralization, which can realize point-to-point transaction, coordination and cooperation based on decentralized credit in a distributed system without mutual trust by means of data encryption, time stamp, distributed consensus and economic incentive, so as to solve the high cost and low cost of centralized institutions Low efficiency and data storage insecurity provide solutions
the application fields of blockchain include digital currency, token, finance, anti-counterfeiting traceability, privacy protection, supply chain, entertainment, etc. with the popularity of blockchain and bitcoin, many related top domain names have been registered, which has a great impact on the domain name instry.

6. In western economics, LMC and SMC represent respectively, M represents margin, LMC represents long-term marginal cost, SMC represents short-term marginal cost, plus lac's long-term average cost, sac's short-term average cost, AC, to synthesize two graphs, which are used to illustrate several critical points, such as when the profit is the largest, when to start to lose, when to stop proction, etc. Western economics refers to the paradigm of political economy which is proced and popular in western countries. In a narrow sense, it refers to the paradigm of western bourgeois political economy. In a broad sense, it includes the paradigm of Marxist political economy. Western economics and Eastern economics are different economic paradigms. Western economics is mainly a paradigm concept, not just a regional concept. Since the reform and opening up, the popular Neo liberal economics in China also belongs to western economics.

7. The most common official explanation for the financial crisis is the problem of subprime mortgage. However, the total amount of subprime mortgage is only a few hundred billion, and the US government's lout fund has already reached more than one trillion. Why can't we see the end of the crisis? Some articles point out that the root of the crisis is that financial institutions use "leverage" transactions; Other experts point out that behind the financial crisis are 62 trillion yuan of credit default swap (CDS). So, what is the relationship between subprime mortgage, leverage and CDs? What kind of interaction between them proced today's financial crisis? In many financial crisis analysis articles, there is no simple and clear explanation for these problems. This paper attempts to provide an answer to these questions through our own understanding. For the sake of being easy to understand, we use several hypothetical examples. Criticism and discussion are welcome if there are inappropriate points

one. Leverage. At present, in order to earn huge profits, many investment banks use 20-30 times leverage operation. Assuming that a bank a's own assets are 3 billion, 30 times leverage is 90 billion. That is to say, bank a borrows 90 billion yuan for investment with 3 billion yuan of assets as collateral. If the investment profit is 5%, then bank a will get 4.5 billion yuan of profit. Compared with its own assets, this is 150% windfall profit. On the other hand, if the investment loses 5%, then bank a will lose all its assets and still owe $1.5 billion

two. CDs contract. Due to the high risk of leverage operation, according to the normal rules, banks do not operate such risky operations. So someone came up with a way to take leverage investment as "insurance". This kind of insurance is called CDs. For example, bank a finds institution B to avoid leverage risk. Institution B could be another bank, it could be an insurance company, and so on. A said to B, how about you do default insurance for my loan? I will pay you 50 million insurance premium every year for 10 consecutive years, with a total of 500 million. If my investment does not default, then you will take the insurance premium in vain. If you default, you will compensate for me. A I think that if I don't default, I can earn 4.5 billion yuan, of which 500 million yuan will be used for insurance, and I can make a net profit of 4 billion yuan. If there is a breach of contract, there will be insurance to compensate. So for a, it's a business that makes no loss. B is a smart person, did not immediately agree to a's invitation, but went back to do a statistical analysis, found that less than 1% of the default. If you do business with 100 companies, you can get 50 billion yuan of insurance money in total. If one of them defaults, the maximum amount of compensation is no more than 5 billion yuan. Even if two companies default, you can still earn 40 billion yuan. A. B both sides thought the deal was good for them, so they made a deal immediately and everyone was happy

three. CDS market. After B has done the insurance business, C is jealous. C went to B and said, how about you sell me these 100 CDs? Each contract will give you 200 million yuan, a total of 20 billion yuan. B thinks that it will take 10 years for me to get my 40 billion yuan. Now there will be 20 billion yuan as soon as I change hands, and there is no risk. Why not do it? Therefore, B and C will close the deal immediately. In this way, CDs, like stocks, flows to the financial market and can be traded. In fact, after C got these CDs, it didn't want to wait 10 years to collect another 20 billion yuan. Instead, it listed them for sale with a price of 22 billion yuan; D saw this proct, calculated it, 40 billion minus 22 billion, there is 18 billion to make, this is the "original stock", not expensive, bought it immediately. As soon as they changed hands, C made 2 billion. Since then, these CDs have been copied repeatedly in the market, and now the market value of CDs has been copied to 62 trillion US dollars

four. Subprime. The above a, B, C, D, e, f... Are making a lot of money, so where does the money come from? Basically, the money comes from the profits of a and its like-a investors. Most of their profits come from American subprime loans. People say the subprime crisis is e to lending money to the poor. I don't think so. The author thinks that the subprime mortgage is mainly given to ordinary American real estate investors. These people's economic strength was only enough to buy their own house, but seeing the rapid rise of house prices, they started the idea of real estate speculation. They mortgage their houses to buy investment houses. This kind of loan interest should be above 8% - 9%, which is difficult to deal with with with their own income, but they can continue to mortgage their house to the bank, borrow money to pay the interest, and set up a white wolf empty handed. At this time, a is very happy that his investment is making money for him; B is also very happy that the market default rate is very low and the insurance business can continue to develop; C, D, e, F and so on make money

five. The subprime crisis. When the house price rises to a certain extent, it will not go up, and no one will take over the offer. At this time, real estate speculators are as anxious as ants on a hot pot. The house couldn't be sold, and the high interest kept paying. Finally, on a day when there was no way out, the house was left to the bank. At this point, a default occurs. At this time, a feels a little sorry that he can't make a lot of money, but he can't lose there. Anyway, B has insurance. B doesn't worry. Anyway, the insurance has been sold to C. So where is the CDs insurance now? It's in G's hands. G has just spent 30 billion to buy 100 CDs from F. before it has time to change hands, it suddenly received news that these CDs were downgraded, and 20 of them defaulted, far exceeding the original estimated default rate of 1% to 2%. Each default will cost $5 billion in insurance, with a total cost of $100 billion. Plus the $30 billion CDs acquisition fee, G's loss totaled $130 billion. Although G is one of the top 10 institutions in the United States, it can not afford such a huge loss. So G is on the verge of bankruptcy

six. Financial crisis. If G goes bankrupt, the insurance that a spent 500 million dollars to buy will be ruined. What's worse, because a uses leverage principle to invest, according to the previous analysis, a can't pay off all its assets. So a is in immediate danger of bankruptcy. In addition to a, there are A2, A3,..., A20, all of which should be prepared for bankruptcy. Therefore, G, a, A2,..., A20 came to the U.S. Secretary of the Treasury together and lobbied with tears. G must not go bankrupt. Once it goes bankrupt, everyone will be ruined. As soon as the Treasury secretary was soft hearted, he nationalized g. since then, the insurance of a,..., A20 totaled $100 billion, all of which were paid by American taxpayers

seven. The dollar crisis. The market price of the 100 CDs mentioned above is 30 billion. The total value of CDS market is 62 trillion. Assuming that 10% of them default, there will be 6 trillion default CDs. That's 200 times more than 30 billion. If the US government buys 30 billion CDs, it will lose 100 billion. So for the rest of the defaulting CDs, the US government will have to pay $20 trillion. If you don't pay, you have to watch A20, A21, A22 and so on close down one by one. No matter what measures are taken, a big depreciation of the US dollar is inevitable

the assumptions and figures used in the above calculation may differ from the actual situation, but the severity of the U.S. financial crisis cannot be underestimated.

8. Yes,
since digital currency is not the currency initiated and approved by the central bank, it can not be banned. Digital currency belongs to digital assets, which can be freely traded between indivials. So digital currency is not an x-sale, not a capital disk, but a financial investment.

9. E-money is an electronic payment method of real money, which can normally purchase, transfer and withdraw cash; Virtual currency is a kind of currency simulated by a certain conversion relationship, which can not be used for general shopping and direct cash withdrawal. Different concepts