Interpretation of the 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 stabilityDigital money (electronic money or electronic currency) is a kind of money in digital form (different from paper money and coins)
it shows properties similar to physical currency, but it can allow real-time transaction and borderless ownership transfer. Examples include virtual currency, cryptocurrency and currency issued by central bank and recorded in computer database (including digital base currency)
like traditional currencies, these currencies may be used to purchase physical goods and services, but they may also be restricted in some communities, such as online games
digital currency is the currency balance that is electronically recorded on stored value cards or other devices. Another form of electronic currency is network currency, which allows value transfer on computer network, especially on the Internet. E-money is also a creditor's right to other financial institutions such as private banks or bank deposits
digital money can be centralized, that is, it has a central point to control the money supply, or it can be decentralized, that is, the control power can have different sources
this kind of money has long been suspected as a pyramid scheme. Mutual aid disk, split disk, cloud mining machine, compound interest disk, dynamic and static disk are typical Ponzi scams. The existence of these projects has seriously affected the reputation of bitcoin, Ruitai coin, Laite coin, vitality coin and other normal digital currencies.
this division of cognition not only helps us understand digital currency, but also guides our behavior in the process of investment. So I'm going to analyze this topic in two or three articles
from the perspective of cognition, I divide all digital currencies into the following three categories:
the first category is that their value and consensus have been strongly recognized, almost indisputable, and have been transmitted from within the circle to outside the circle. This kind of currency is the least in the whole field of digital currency
this kind of currency typically includes bitcoin and Taiwan dollar. Bitcoin is recognized as "digital gold" and has repeatedly shown the characteristics of "sea calming needle" when the external political and economic environment is unstable; The profit model of platform currency is clear, especially the top three platform currencies have solid cash flow and income relying on the exchange
when talking about this kind of currency, both their consensus and value are highly recognized in the instry, and ordinary people can understand it outside the instry
when we talk about bitcoin with ordinary people, as long as we tell them that gold goes up, bitcoin goes up; When talking about platform currency with ordinary people, just tell them that platform currency is equivalent to the stock of securities companies, and they will immediately understand what we are talking about
although some people outside the instry do not agree with some consensus (for example, some people still do not agree with the value of bitcoin), this does not prevent ordinary people from understanding what we are talking about
the second type is that consensus has been reached, but the actual use value is still being proved, or the so-called "use value" can not show us the actual effect for the time being. This kind of currency is slightly more than the first kind, but also very few in the whole field of digital currency
this kind of currency typically includes Ethereum, EOS and cross chain projects in the field of smart contract
take Ethereum and EOS for example, they are highly expected by the instry. We hope to see that their smart contract function can proce killer applications and bring higher efficiency and lower cost to our daily life
in the past two years, Ethereum has developed a highly concerned defi Ecology (defi, decentralized finance, often referred to as distributed finance or decentralized Finance) in the instry
however, does this ecology have a direct relationship with the life of ordinary people or bring direct benefits? In fact, it does not exist at all. It is still a "niche ecology" in a small circle, far away from our daily life
the ecosystem developed by EOS in the past two years is far from the areas where we expect to bring value into play, and even there are not many people in the instry who pay attention to it
the concept of cross chain project is very novel when it first came out, and it is also considered by the instry to have great potential demand. But after a period of discussion, some people began to question whether this demand really exists
the instry has a consensus, or even a high consensus, on these currencies, but their current value is not satisfactory. Therefore, even if they are recognized by the instry, it is difficult for this consensus to be transmitted outside the instry, not to mention that ordinary people can understand these consensus and values
so we can't talk with ordinary people about what "defi" and "cross chain" are and what's the use
the third category is the currency whose consensus is still in the process of forming. The design objectives and scenarios of this kind of currency may not be understood or recognized by the instry, or even there are great differences in understanding. Their value is even more difficult to judge. This kind of currency accounts for the vast majority of the current market.