What are the financial characteristics of digital currency
digital currency is characterized by low transaction cost, fast transaction speed and high anonymity
1, low transaction cost
compared with traditional bank transfer, remittance and other ways, digital currency transaction does not need to pay fees to the third party, and its transaction cost is lower, especially compared with the cross-border payment that provides high handling charges to payment service providers
2. Fast transaction speed
the blockchain technology used in digital currency has the characteristics of decentralization. It does not need any centralized organization similar to the clearing center to process data, and the transaction processing speed is faster
3. High anonymity
in addition to the point-to-point transaction without intermediary participation, one of the advantages of digital currency compared with other electronic payment methods is that it supports remote point-to-point payment, and it does not need any trusted third party as intermediary, Both sides of the transaction can complete the transaction in a completely unfamiliar situation without mutual trust, so they have higher anonymity, which can protect the privacy of traders. But at the same time, it also creates convenience for cyber crime, which is easy to be used by money laundering and other criminal activities
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the impact of digital currency:
digital currency is a double-edged sword. On the one hand, the blockchain Technology it relies on realizes decentralization and can be used in other fields except 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 and financial stabilityvirtual currency is the electronization of illegal currency, and its original issuer is not the central bank. This kind of virtual currency is mainly limited to circulation in a specific virtual environment. Digital currency can be used for real goods and services transactions, but only the digital currency issued by the state is legal digital currency
in 2013, the central bank, together with five ministries and commissions, issued the notice on preventing the risk of bitcoin, which clearly defined non legal digital currencies such as bitcoin as virtual commodities, not in the form of currency and legal currency< At the same time, digital currency is different from electronic payment. In the actual use experience, digital money and electronic payment may feel similar, but they are still quite different in essence. Before digital currency, the financial instry has been highly informationized. Such as Internet banking, WeChat, Alipay and so on pay the popularization of electronic technology, physical cash accounts for only a very small part of the total circulation of money. In spite of this, because the money used in the transaction comes from the bank account, it actually corresponds to the banknotes.
Digital currency is a kind of legal tender, which must be issued by the central bank. Both digital gold coin and cryptocurrency belong to digital currency, which is not a network virtual currency, because it is not limited to virtual space, but is often used for real goods and services transactions, such as bitcoin, Wright coin, bitstock, etc. at present, there are thousands of digital currencies issued around the world
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1. Impact on financial infrastructure
the decentralized mechanism of value exchange based on distributed ledger technology has changed the basic settings of gross and net settlement on which financial market infrastructure depends. 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
If digital currency and distributed ledger based technology are widely used, it will bring challenges to the intermediary role of financial system participants, especially banks. As a financial intermediary, banks perform the ties of acting supervisors and supervise borrowers on behalf of depositors. Usually, 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 mechanisms1. Litecoin is similar to bitcoin, which is also an encrypted digital currency, and its price has risen sharply recently. It is a P2P open source digital currency, which can be regarded as a branch of bitcoin. However, although lightcoin is based on bitcoin protocol, it does not require very high computing power. It can also be mined using ordinary computers. Lightcoin's algorithm comes from the algorithm designed by Dr Colin Percival for tarsnap secure online backup service (backup for Linux and other open source operating systems)
2. Namecoin
namecoin is also based on bitcoin, which is another branch of open source. Namecoin is a distributed DNS protocol -- generally speaking, it can transform the website name (such as ifeng. Com) that can be understood by human into the address that can be understood by machine. As its own DNS, this kind of currency can operate outside the normal Internet, so it can break away from the control of ICANN
the monetary value and domain name of namecoin are stored in the user's blockchain records, limiting the total number to 21 million
3. Peercoin
peercoin is a peer-to-peer variant of bitcoin, which can improve mining efficiency and security, and improve safeguard measures to avoid group mining. Now, group mining has been considered as a potential defect of bitcoin. According to the statistics of emerging currencies by coinmarketcap.com, peercoin currently ranks fourth in the market value of digital currencies
4. Primecoin
primecoin is a cryptocurrency similar to bitcoin, but it uses a completely independent mining algorithm. Bitcoin uses the hashcash algorithm, while prime coin uses the long Cunningham chains to create the value of money - a sequence of prime numbers named after mathematician AJC Cunningham
in the process of bitcoin mining, as the amount of money goes on, the difficulty will increase sharply. But prime is different. Every time a primecoin is mined, the mining difficulty will increase slightly, and the process is much more stable< 5. Feathercoin
based on the design of litecoin, released in April 2013, can adjust the mining difficulty more frequently than litecoin. Feathercoin will be updated frequently, adding new features and improvements to eliminate malicious mining behavior
6. Novacoin
another P2P digital cryptocurrency. Novacoin is different from most other currencies in that it integrates a protection mechanism in the currency core, which can identify illegal mining activities
the total number of novacoin is limited to 2 billion, which is considerable. If necessary, the total can be adjusted upward
7, infinitech
published in June 2013. A by-proct of litecain. According to the mining situation and the total amount of money, infinite money can frequently adjust the mining difficulty ratio< Megacoin was only released in the fourth quarter of 2013, imitating bitcoin in the early stage. The total number of megacoin is limited to 42 million, which can be mined like other virtual currencies. Its biggest selling point is brand publicity, which other digital currencies lack< It was released in 2013 and is still in its infancy. In the security part of quarkcoin, nine independent loops are deployed and six different algorithms are used.
Digital currency is a new type of investment. Compared with other familiar investment procts such as stocks, bonds, funds, real estate and art, digital currency is essentially different in basic principles, supply and demand pattern and internal mechanism. Before investing in digital currency, we should deeply understand the basic principles and value basis of digital currency. Let's first look at the history of money
As a general equivalent, the essence of money lies in social identitythe three foundations of the value of digital currency are excellent nature, payment network and general recognition. First of all, digital currency itself has a series of excellent characteristics, including thorough digitization, thorough Internetization, high separability, security and simplicity based on Mathematics and cryptography, decentralization, high transparency and scarcity Low cost, no boundary, zero threshold, fairness, unforgeability, tampering, anonymity and so on
Secondly, digital money itself has built-in payment network, while the issuance and circulation of the traditional financial system are separated. Recently, the payment network supporting digital currency is becoming more and more perfect Finally, e to a series of excellent properties of digital currency. With huge prospects and infinite possibilities, the number of its users has soared, and more and more people and investors begin to pay attention to digital currency. In just a few years, digital currency has achieved rapid development, new models and new concepts emerge in endlessly. The instry is more and more confident in the future digital economy dominated by digital currency, and the general recognition of digital currency is rapidly forming
it can be predicted that with the evolution of digital currency technology in the future, digital currency will graally move towards the mainstream and become the dominant currency of Internet economy. Try to make an all-round text interpretation of digital currency, readers still inevitably fall into the situation of blind people feeling the elephant. Therefore, you can download a bitcoin software, buy a bitcoin and trade it several times. Naturally, you can have a deeper understanding of digital currency and have more confidence in the future of digital currency
The role of digital currency:
1. First of all, the central bank's digital currency can provide a huge data base for monetary policy and macro Prudential policy, so that the regulatory authorities can collect real-time trading books of different frequency and different institutions according to their needs, and it is complete and real. This information advantage can help the central bank use policy tools more accurately and flexibly
Secondly, the central bank's digital currency technology can track the flow of funds and help the regulatory authorities to comprehensively monitor and assess financial risks. Finally, the central bank's digital money technology is concive to the transmission of interest rate of monetary policy. Digital currency technology supports "point-to-point" payment and settlement, which can improve the liquidity of market participants. Only the digital currency of the central bank, which is generally accepted by the whole society, can radiate this advantage to the participants of different financial markets, so as to improve the liquidity of financial markets. This will make the term structure of interest rate smoother and the transmission mechanism of interest rate smoother
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digital currency can be considered as a virtual currency based on node network and digital encryption algorithm. The core characteristics of digital currency are mainly reflected in three aspects: because it comes from some open algorithms, digital currency has no issuing subject, so no one or institution can control its issuing; Because the number of algorithm solutions is fixed, the total amount of digital currency is fixed, which fundamentally eliminates the possibility of inflation caused by the overuse of virtual currency; Because the transaction process needs the approval of each node in the network, the transaction process of digital currency is safe enough