How to understand digital currency?

First, the understanding of digital currency's concept.

Entity-based digital currency

Since ancient times, all "money" made of paper has been called paper money, but all countries in the contemporary world are actually paper money. In Marx's era, paper money was only a symbol of metal money, and the actual gold content of paper money was equal to the nominal gold content. When the nominal gold content is greater than the actual gold content, the price index of metal currency will rise because of too much paper money, and when it exceeds a certain limit, inflation will occur. Marx called these super-issued banknotes without gold as a guarantee virtual currency.

In the Keynesian era, paper money was a symbol of GDP. He defined issuing paper money as deficit currency because it made up the fiscal deficit, and thought that issuing paper money deficit currency could promote the development of production to a certain extent, but it only caused semi-inflation.

Zhang Chunjia's research in "Introduction to Virtual Currency" also proves that the introduction of paper money with neither precious metals nor GDP guarantee will cause the price to rise, and this currency is called virtual currency.

Virtual digital currency

Virtual currency is a new type of currency that appears at a certain stage of network social and economic development. It exists to meet users' demand for security and convenience, and it represents the development direction of future currency forms. It comes from the Internet and acts as a universal equivalent in the network society. Virtual currency is real currency, which has the basic properties of currency, but it is virtual and depends on the network virtual environment.

Virtual currency is borderless by nature, which makes it more liquid than traditional currency on a global scale. The virtual world corresponds to the real world and is linked by the exchange relationship between virtual currency and traditional currency. Under certain conditions, specific virtual currency can buy physical objects, and traditional currency can also buy specific virtual goods.

Second, the characteristics of virtual currency

1. effectiveness, users get utility value by consuming products and services provided by operators. Virtual currency has value by providing an exchange that satisfies the utility of consumers, and the quantity of virtual currency measures the value of general goods. The essence of virtual currency issuance is also credit issuance, which is the creditor's right of the holder to the issuer. Within a certain range, the value of this kind of creditor's right is the right of claim.

2. Virtual environment dependence, the existence of virtual currency is based on the virtual economic environment provided by the issuer and the continuous operation of the issuer itself, otherwise the virtual currency has no meaning.

3. Short-sighted monetary nature, as the highest value form in the process of commodity exchange, monetary value form can be considered as the real currency in the world. Virtual currency can't act as a universal equivalent of all commodities because of its limited circulation; But within a certain range, it has the function of monetary value scale and circulation means. Therefore, it can be considered that virtual currency is similar to the value form of money, and it is a primary form of money, which is similar to money.

4. Need to be standardized. Although the issuance and circulation of virtual currency are restricted, it will amplify the money supply through the money multiplier effect and affect the difficulty and accuracy of macro-control. Virtual currency issuers need to report their circulation and liquidity to the central bank and obey the unified management of the central bank at any time.

5. Need to regulate, the currency is issued by the central bank, and the central bank carries out macro-control through monetary policy. Virtual currency, issued by non-financial entities outside the financial system, is a market behavior, which will inevitably lead to competition among issuers. This kind of competition will completely lead to unfair competition or gain a competitive advantage through rent-seeking, which determines that the regulatory subject needs to regulate the market behavior of the market subject according to laws and regulations.

6. Virtuality, virtual currency, as an approximate currency, is virtual if it only exists in the virtual world and can buy virtual property; If linked to the sovereign currency, it can exist in the real world and can buy physical assets, then it is the virtual thing of the sovereign currency.

Virtual currency is actually a string of data files in a computer system, and it has the meaning of virtual currency only after the publisher explains its system. Thus, the existence form of virtual currency is virtual.

7. The application is limited. Generally speaking, virtual currency can buy the products and services provided by the issuer, or it can be combined with the issuer outside the scope of issuance and exchanged in a certain proportion to buy the products of the issuer. For products outside the alliance, virtual currency has no value; Similarly, when virtual currency is only authorized to buy different products in different sales cycles, the use of virtual currency is limited in time and scope, unlike sovereign currency, which is completely convertible.

8. Separability. Virtual currency has no physical form, but digitally stored information. Different from traditional paper money, it needs to consider the circulation of primary currency and secondary currency and the balance of various currency proportions, and can be split indefinitely. For example, bitcoin, although the total number is only 2300, each bitcoin can be divided into ten eight directions.

9. Relevance to the real economy. Although there is virtual currency in the virtual world, the process of new technological revolution has closely linked the virtual world with reality, and the virtual world has become an important part of people's spiritual life. It can promote the development of the real economy, for example, a large number of entertainment application projects provide people with rich spiritual wealth; On the contrary, money laundering, gambling and network theft in the virtual world will have negative effects on the real economy.

Third, the law of the evolution of monetary form.

(A) the law of decreasing transaction costs

In the history of money, the form of money is not static, and the form of money in different periods is different, and the form of money in the same period will be different because of different situations.

1. In the physical currency stage, turtle shells, seashells, mussels, millet, farm tools, leather and horns were all used as physical currency. However, with the development of commodity trade, it is forgotten by history because of its heavy quality, inconvenient carrying, uneven color, difficult division, perishable, difficult preservation, uneven scale and difficult comparison.

2. In the stage of metal currency, in order to meet the needs of economic development, base metals such as iron and copper gradually transition to precious metals such as gold and silver. The metal currency whose weight and fineness are proved by the national seal has the advantages of stable value, easy division and preservation, and the improvement of metal smelting technology, which makes the metal currency of great significance. Due to the disadvantages of high casting cost, difficult to carry, difficult to keep and easy to wear, the transaction cost is still high.

3. In the stage of credit currency, the original credit currency that can be converted into metal currency has been partially cashed in the Bretton Woods system and gradually developed into a pure credit currency that cannot be converted under the Jamaican monetary system. It is a symbol of monetary value, guaranteed by the national reputation, and represents the country's debt to users. However, inflation caused by excessive currency has caused many controversies. Credit currency reduces the cost of storage, division and safe transportation of precious metals, and the saved metals are used in other efficient production fields.

4. The stage of electronic money based on the development of computer technology is the result of financial innovation and a new starting point for future money development. Electronic money reduces a lot of expenses such as printing money, storage, cash handling, counting and destruction, and its use is not limited by time, place and service object, which greatly improves the scope and efficiency of transactions.

5. In the virtual currency stage, based on the Internet, it is a data file existing in the issuer's server. There is no so-called casting and printing cost, no card handling fee and transfer fee for electronic money, and no cost arising from the transportation and carrying of money. All circulation only needs to transmit the specified data through the network. This form of currency adapts to the development of economic globalization and greatly reduces transaction costs.

(2) Closely related to the level of scientific and technological development.

1. In the early Stone Age, agriculture and animal husbandry were the main ways of human existence, and people traded individual goods as universal equivalents, such as jade and clay, with a narrow trading range, which was a supplement to production. The development of productive forces provides more physical objects, and a large number of physical objects cannot be exchanged for the same value. There is an urgent need for a divisible currency that cannot be manufactured at will to act as a universal equivalent. With the development of handicraft industry and metallurgical technology, metal money became the main form of money in society at that time.

The invention of electric power and internal combustion engine led to the second scientific and technological revolution. In order to meet the requirements of capitalist productive forces, credit currency came into being. At this time, the printing and chemical technology produced by the machinery manufacturing industry ensured the printing, distribution and anti-counterfeiting of credit currency.

Since the 20th century, the rapid development of electronic science and computer technology has promoted the third scientific and technological revolution. Economic entities have higher requirements for the rapidity of trading media, and new electronic money has emerged. With the development of network technology, the world has entered the era of network commerce, and the prosperity of virtual network economy industry has given birth to virtual currency, which meets the economic demand for low cost, low risk, virtuality and rapidity of trading media.

(C) the law of the development of money itself

Money is produced with simple exchange, and its form changes with the development of trade exchange. Every time the form evolves, from concrete to abstract, from entity to concept, money tries to use any kind of value as a value symbol and send it to paper money, credit cards and electronic terminal equipment. Constantly develop in the direction of socialization and virtualization. Historically, commodity currency has two forms: physical currency and metal currency. This currency has the dual functions of commodity and currency, and its value as a currency is equal to that as a commodity. Barter restricted the development of transactions, and this production relationship no longer satisfied the development of productive forces, and then turned into credit currency. The issuance of credit currency is guaranteed to some extent, and the sovereign currency issued by the state relies on the credit of the state to force circulation. The monetary credit guarantee has also realized the development from concrete to abstract due to the compulsory issuance and circulation of the state, and has realized the leap from concrete goods to abstract symbols. Currency entered the electronic age from paper form and became a series of digital symbols. This kind of electronic money is a kind of money that uses electronic pulses instead of paper to transfer and store funds. Its appearance made deposit and withdrawal, investment and financing, trading and other related transactions become digital electronic data exchange forms, and money began to develop in the paperless direction, achieving the second qualitative leap. The development of network society has created a prosperous virtual network environment and rich virtual network products, which has led to the use of network society for virtual currency transactions. This currency is a data file stored on a network server and depends on the whole Internet. Its currency form is further virtualized.

Four. conclusion

The appearance of virtual currency is not accidental, it is a part of the evolution history of currency and the crystallization of digital technology revolution. Looking back at the history of money, any form of money will be questioned or even rejected from birth to maturity. Like traditional currency, it is not natural and perfect. It is constantly improved in the process of development to better adapt to and serve the productive forces.