Financial crisis of digital currency

1.

Hello, where are the first batch of pilot cities of the central bank's digital currency? Do you think they are well deserved super first tier cities "Beijing, Shanghai, Guangzhou and Shenzhen"? I want to tell you that it's not all right. Except Shenzhen, the other three cities are Cheng, Suzhou and xiong'an new area. At present, Shenzhen is the earliest city to launch digital currency. On October 9, Shenzhen issued 10 million digital currency. 50000 people, 200 yuan per person, can enjoy the welfare, which is distributed to everyone free of charge through the way of wagging number. Here, I can only envy you. The implementation of digital currency is so fast. The friends in the pilot cities are lucky. I just want to watch you win the lottery

the first batch of pilot cities are selected in these four cities, which is the first step for digital currency to go to the whole country. When it matures in the future, it will be promoted to more pilot cities. So don't worry, just wait. Even if our city is not a pilot, it doesn't matter. Next time it will be our city. The pilot is just to test the stability of the system, and we don't have a great chance to get the red envelope of digital currency. There are so many people in Shenzhen, and only 50000 numbers are selected. Here we would like to express our support and thanks to the cities selected as the pilot cities of digital currency

2. The current digital currency market is bleak, but it is optimistic in the long run. The following excerpts are from Babbitt community:
historically, the trigger of the bull market in 2011 was the report of Forbes magazine, while the trigger of the bull market in April 2013 was the Cyprus government's tax on deposits of more than 20000 euros. Some people think that the trigger of the bull market in November 2013 was CCTV's report on Canada's first bitcoin ATM and the US national debt crisis

although I can't predict which event will trigger the next bull market, the following candidates have great potential:

1. Inflation in Argentina or Venezuela will trigger the financial crisis. These two Latin American countries are suffering from severe inflation now. Once the financial crisis is triggered because they can't pay off their foreign debts, it is bound to lead to the devaluation of their currencies. Buying bitcoin to keep their value may become a choice for some people

2. The bitcoin fund of winkleworth brothers is officially listed. At present, it is still difficult for the United States to buy a large amount of bitcoin, which makes it inconvenient for some large institutions that look like bitcoin to enter, and bitcoin fund can eliminate this threshold. After all, the total market value of bitcoin is about US $8 billion. Once the purchase is no longer a problem, only a few hundred million US dollars can create a new bull market

3. Super heavyweight large multinational companies announced to accept bitcoin payment. Since the beginning of this year, bitcoin has been accepted by several well-known large companies, but Dell, the largest company with a market value of less than 70 billion US dollars. If one of Amazon, Google, Facebook, apple or even Wal Mart announces its acceptance of bitcoin, the shock will be quite different. Some people who have heard of bitcoin but are skeptical about it are likely to change their mind, which can also make many people who laugh at bitcoin for not buying anything shut up

4. After further research, Li Jiacheng decided not only to invest in bitcoin related companies, but also to buy bitcoin directly. It's still very easy to buy money in Hong Kong. Li Chaoren only needs to spend 5% of his wealth to buy money, which is enough to set off a bull market. This is not the money to follow suit because of its demonstration effect. Of course, it doesn't have to be Li Ka Shing, any super rich can

5. The collapse of Portuguese banks triggered the national debt crisis, and the Portuguese government issued a tax policy on deposits, which was repeated in April 2013

6. The truth of Malaysia Airlines mh17 came out and was shot down by Ukrainian Pro Russian forces. Europe and the United States decided to further increase sanctions against Russia. In order to counter it, Russia declared bitcoin legal and encouraged it to be used in international trade

7. A leader of Iran, North Korea or Cuba finally came to his senses and decided to trade with bitcoin to circumvent international sanctions. Personally, I'm optimistic about three fat people. I'm also a post-80s generation.

3.

Ant technology is almost zero cost financing, through various forms of packaging debt, repeated borrowing, and then irresponsibly lend money to young people who have no ability to repay. This is basically bringing the crazy financial crisis of Wall Street in 2008 to China. The real capital market is changeable and more cruel than you think

ant technology's blood sucking through online loans has been picked out by many people. Zhou Xiaochuan, former governor of the Central Bank of China, also said at the Boao Forum of Asia recently that Internet technology giants controlled a large amount of data and market share, formed a monopoly and hindered fair competition, which led to the decline of Alibaba's share price

if Google can freely use users' personal information in financial business, it can also become the largest lending institution in the world. Google doesn't do it because American businessmen are particularly kind, but American policies don't allow it at all

as vice minister of Finance Zhou Jiayi said at the Bund financial conference, science and technology has not changed the nature of relying on credit to use leverage, supported the development of financial technology, insisted on the improvement of science and technology, prevented financial technology from incing excessive financial consumption, and encouraged the winner take all monopoly

now that the digital currency DCEP of "central dad" is on the way, can ma Yun's wishful thinking work well in the future? Let's wait and see< br />

4. Are you talking about coal mining? Or mining in virtual currency, which means using computer to solve a complex mathematical problem, to ensure the consistency of network distributed accounting system. Leilecoin network will automatically adjust the difficulty of mathematical problems, so that the whole network can get a qualified answer. Then, a certain amount of money will be generated as a reward to reward the person who gets the answer.

5. 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.

6.

No

China global currency is an imitation of GEC, with the same interface and mode as GEC. It is a new currency trading financial investment platform. China global currency is a kind of virtual currency, which is not protected by law

the digital currency of the central bank is issued by the Central Bank of China, which is a digital form of legal currency. It is essentially the same as cash and has national credit. Digital currency adopts the block chain technology as the transaction mode, which has the characteristics of centralization and does not need any centralized organization similar to the clearing center to process data

extended information:

precautions for the use of digital currency:

under the framework of legal digital currency, the central bank has more direct power to regulate the money market. In the case of legal digital currency, the balance sheet of the central bank is likely to expand substantially. But in the economic crisis, financial crisis, the central bank must provide more liquidity support to commercial banks

as long as the deposit of legal digital currency meets the conditions, it is easy for users to withdraw the deposit, which will cause a payment crisis of a bank, and cause a chain reaction, which may promote systemic financial risk