Currency is created only for transactions, and when it is seen as wealth stored in an account, has it deviated from its own essence? Confusing money and wealth will smooth out the characteristics of wealth itself, and I think blockchain technology will promote wealth and money to distinguish each other.
1. Discrimination and Analysis of the Nature of Currency
Wealth is used for storage, and currency is used for transactions. The traditional account-based statistical method misleads people to regard currency as wealth, while the ledger-based blockchain pays more attention to the transaction itself, which is closer to the essence of currency .
When I receive 100 dollars, I don't care how the 100 dollars were earned. But when people evaluate an economic activity, they will consider factors such as the broken window effect, economic complexity, nanny economy, and high-tech industry. This shows that although money is indiscriminate in people's minds, wealth is different. This distinction is erased when wealth is abstracted into money.
In the process of being abstracted, the impression of wealth on us has changed from the earliest common objects such as land, grain, and livestock to the specific objects such as silk in the Tang Dynasty, salt in the Song Dynasty, and precious metals in the Ming and Qing Dynasties. , so that today's legal currency, digital currency, etc. Accompanying it is the gradual blurring of the cognition of the specific attributes, functions and rights and interests of wealth.
For example, in an era when wealth is considered to be land, people will consider whether they have the right to buy and sell, whether they can change the use of the land arbitrarily, and whether they can let the land go to waste, etc., and the corresponding land use rights will be restricted. But in the era when wealth is considered to be currency, people will think that since it is their own money, it should be 100% at their disposal. This suggests that wealth without specific attributes is not constrained.
In order to distinguish the difference between the concretization of wealth and the abstraction of money, it is necessary to classify the use cases of money. According to the behavior classification of dealing with people and money, it can be divided into three situations: acquisition, holding and payment. Among them, the acquisition can be divided into labor remuneration, capital gains, loans and free gifts; the payment methods can be divided into consumption, investment, lending and free gifts. If we look closely at the economic activities associated with each method, we will find that the rights exercised over currency are different, and the corresponding rights are also based on different basis.
For example, a private enterprise has 100 employees and a boss A. The average monthly income of employees is 3,000, and the net income of boss A is 300,000. This shows that the boss is as important as all employees. But the reason why A can play the role of the boss is firstly that the industrial and commercial society determines the existence of privately owned enterprises, so there must be a private boss, and secondly, A has outstanding ability and becomes the boss in the social competition.
Therefore, in the role of the boss, the social environment contributes most, and A's personal efforts contribute a small part, but all of these are counted as A's income. If A’s income can be differentiated, the labor income part should be used freely, and the capital income part is the joint contribution of individuals and society, which should be used with restrictions.
But employees are different. No matter in industrial society or agricultural society, they are laborers. The nature of personal income will not change due to social development, and all income should be freely controlled. When the wealth rights and interests are clear, A is the capital custodian exercising limited rights, but when the wealth rights and interests are not clear, A is the capital owner exercising all rights.
Another example is the huge amount of idling currency in the U.S. financial market, which is nominally no different from the currency in physical transactions, but the currency in these virtual economies cannot flow into the physical market on a large scale under normal circumstances, but can only buy financial assets, because Once they withdraw from the financial market, the price of financial assets will plummet.
However, after the financial tsunami, these low-quality bad coins can be laundered and cashed out through the bailout of the Federal Reserve, and circulated in the physical market openly. What has shrunk is the purchasing power of hard-earned wages in the hands of ordinary people. If you can distinguish the circulation process of every penny, you can characterize them and prevent such theft.
I think that based on the principle of "whoever pays, who benefits", the payment of rights and interests should correspond to the way of acquisition. What is obtained from the society should be given back to the society, and what is obtained by individuals should be used for individuals, that is, capital gains should be mainly used for reinvestment. , and the income from labor can be used by individuals at will.
If these rights and interests are to be clearly divided, it is required that not only the currency can be classified according to the method of acquisition, but also the purchased goods or services can be recorded according to the method of payment. That is, the full digitization of all currencies and physical objects in the transaction network. And the current form of money simply cannot do that.
2. The battle of the trend of digital currency
I think the most important feature of digital currency is to record transactions, and the greatest power of currency is the right to issue and liquidate. Grasping these two points can distinguish the similarities and differences between different trends.
The information at the end of the article mentions that "in terms of the specific implementation of the central bank's digital wallet of a commercial bank, the digital currency wallet ID field can be added to the existing bank's basic account. The role of the wallet is mainly for storage. Since it is not in the balance sheet of the commercial bank In addition, it does not participate in the bank's interest calculation and withdrawal.
If this is the case, it means that the digital currency accounts of commercial banks are only for the convenience of promotion. In fact, the central bank has opened digital currency accounts for everyone. That is to say, the central bank can see all the transaction records and has the right to bookkeeping, but only authorizes commercial banks to act as an agent for bookkeeping operations. In this way, although commercial banks still have certain terminal influence and share transaction records with the central bank, the central bank has completed centralization. So I don't think it is much different from the Bank of England's model in essence, but it will be much worse in terms of liquidation efficiency.
In the past, the central bank could only know the flow of funds at the level of commercial banks and regulate finance. After digital monetization, it can bypass commercial banks and directly affect the end of economic activities in one step, just like a dripper converted from flood irrigation.
But I think even if the Bank of England can bypass the commercial banks, it does not mean that the western banks have lost their dominant power. After the currency is digitized, it only makes them lose the income of deposit and lending, but in the era of negative interest rates, these losses have little impact. Digitization does not affect banks' advantages in financial speculation, nor does it affect the central bank's QE, and of course it does not affect the bottom line on financial crises. Although the form is changing, the owner of the currency issuance rights and bookkeeping rights has not changed. The Bank of England's digital currency is more like a salvo to the masses of the Bitcoin revolution.
The point of this article is that due to the characteristics of blockchain technology in journals, it can restore the details of economic activities, and its application in currency and commodities can solve the above problems.
references:
Essence Analysis of Central Bank Digital Currency: Financial and Technical Dimensions
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