Economics topic digital currency good currency
1. The government adjusts the price of related precious metals and increases the supply
(2) to choose the issuing system of currency standard instead of plicate system3. If it comes to the phenomenon of bad money expelling good money in society, only by making the information completely transparent can it be solved
the premise of bad money expelling good money is information asymmetry, which can't be eradicated, because information can't reach complete symmetry. When information flows fully, it can alleviate this phenomenon when it can distinguish bad money from good money
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extended information:
historical evolution
in the 16th century England, precious metals were not enough for coinage, so other metal components had to be added to the newly minted currency. Therefore, there were two kinds of currency in the market at that time, one was the currency without impurities, and the other was the currency added with other metals
although the two currencies have the same legal value, people can identify them, store the currency without impurities and take the currency with impurities for trading. Therefore, the good money on the market is graally stored and reced circulation, leaving only the bad money in the market Good money here refers to money without impurities.)
another kind of situation in which bad money drives out good money will happen under the gold and silver plicate system. The gold silver double standard was adopted for a long time by Britain, the United States and France from the 18th century to the 19th century. Since the exchange rate between gold and silver coins is set by the government through law, it will remain stable for a long time, but the relative price of gold and silver in the market will fluctuate e to the law of supply and demand
if the actual value of gold exceeds the legal exchange rate, people will melt the gold coins (good coins) with greater value into gold nuggets, and then sell the gold and exchange it for silver coins (bad coins). After this process, more silver coins can be exchanged than gold coins for silver coins. Sometimes people even repeat this process many times, so the good money on the market is increasingly melted and reced, and the bad money will flood the market and seriously disrupt the market order
Currency digitization has been realized for a long time. The so-called digital currency is cash digitization, which can only be used for M0. Because the large amount of funds can be easily carried, there is no need to deposit in the bank, so the large-scale outflow of bank funds is easy to achieve
today's digital currencies, such as bitcoin, litecoin, ppcoin, etc., are created, issued and circulated by means of check sum cryptography. It is characterized by the use of P2P peer-to-peer network technology to issue, manage and circulate currency, which theoretically avoids bureaucratic approval and endows everyone with the right to issue currency. Digital gold currency is an electronic currency named after the weight of gold. The typical unit of measurement for this currency is the Troy gram or troy ounce, although sometimes gold and the Dinar are also used as units. The capital source of digital gold currency is gold storage without quota or allocation quota. The relevant person in charge of the central bank said that the digital currency research team of the people's Bank of China should establish a more effective organizational guarantee mechanism, further clarify the strategic objectives of the central bank's issuance of digital currency, do a good job in tackling technical problems, study the multi scenario application of digital currency, and strive to launch the digital currency issued by the central bank as soon as possible
source:
in the 16th century England, precious metals were not enough for coinage, so other metals had to be added to the newly minted coins. Therefore, there were two kinds of currencies on the market at that time, one was the currency without impurities, the other was the currency added with other metals. Although the legal value of the two currencies is equal, people can identify them, store the money without impurities, and trade the money with impurities. Therefore, the good money on the market is graally stored and reced circulation, leaving only the bad money in the market Good money here refers to money without impurities.)
another kind of situation in which bad money drives out good money will happen under the gold and silver plicate system. The gold silver double standard was adopted for a long time by Britain, the United States and France from the 18th century to the 19th century. Since the exchange rate between gold and silver coins is set by the government through law, it will remain stable for a long time, but the relative price of gold and silver in the market will fluctuate e to the law of supply and demand. If the actual value of gold exceeds the legal exchange rate, people will melt the valuable gold coins (good coins) into gold nuggets, and then sell the gold for silver coins (bad coins). After this process, more silver coins can be exchanged than gold coins for silver coins. Sometimes people even repeat this process many times, so the good money on the market is increasingly melted and reced, and the bad money will flood the market and seriously disrupt the market order The term "good currency" here does not refer to a currency with a high unit price, but refers to a currency with an advantage over the exchange rate. Suppose that the legal exchange rate of gold coin to silver coin is 1:10. If one gold coin can exchange more than 10 silver coins after melting, the gold coin is good; If more than one gold coin can be exchanged after 10 silver coins are melted, the silver coin is good.)
example:
in order to streamline employees and improve efficiency, the factory requires one of the two employees to be laid off. The original intention of the factory is naturally to want the one with strong ability to stay in the factory, but in fact, the one with weak ability often stays in the factory, and the one with ability leaves because he has a greater chance of finding a new job. In this way, bad money drives out good money
in my opinion, it can also be said that the company gives the same salary to people with different abilities. In fact, it gives the same nominal value to people with different actual values. The result is that people with high abilities will leave and those with low abilities will stay. Then bad money drives out good money!
the asymmetric information of the parties is the basis of the phenomenon of "bad money expelling good money". Because if both sides of the transaction know well about the quality or authenticity of the currency, it is difficult for the bad currency holder to use the bad currency, or even if they can use it, they can only trade with the other side according to the "actual" rather than "legal" value of the bad currency
the founder of asymmetric information theory is George Akerlof, Professor of economics at the University of California, USA, who won the Nobel Prize in economics in 2001. However, his pioneering paper "lemon market" was once rejected by three authoritative economic journals because it was considered "superficial". After several twists and turns, this paper was published in the Quarterly Journal of economics of Harvard University, which immediately caused great repercussions.