I have actually discussed digital currency with others many times. Until now, I still stick to my opinion. Digital currency is a technological revolution, and the object of its revolution is not currency, but currency symbols.
Birth of the modern bank
Paper money is not currency, but a currency symbol. Originally, paper money was simply a deposit of money stored in a vault. In the market, everyone gradually replaced the physical transaction currency with the deposit of the transaction currency. On the other hand, since everyone trades currency deposits, fewer and fewer people come to withdraw currency, and a large amount of currency is idle in the vault. The treasury owner secretly lends out the currency and earns a lot of interest. It was a blatant theft that turned out to be the bedrock of finance today.
Later, after years of struggle, society generally approved this behavior. The treasury owner only needs to keep one-tenth or even less of the currency in the warehouse, and other currencies can be used for lending. This is called the fractional reserve system . This is of the same nature as Jack Ma's Alipay misappropriating users' funds. Depositors are deprived of ownership of their currency and are only compensated with a small amount of interest on their savings. This is how the modern bank was born. At this time, the deposit slips in the vault became banknotes.
Since the birth of the bank, every pore has been full of sin and greed. It is the product of intrigue and stupid fornication, the origin of all human inequality for nearly 500 years. If, considering all banks in the world as a whole, the fractional reserve ratio is 10, then the banking system can create 10 times as much paper money as currency. No famous tyrant in history has ever had the ability to create money out of thin air, while banks enjoy the terrifying alchemy of wealth all to themselves.
However, this is a helpless fait accompli. In the era of papermaking, paper is the carrier of human information transmission, and currency symbols are also a kind of information. Human society has no choice but to accept paper money. Now, times have changed, and the technology used by humans to transmit information has evolved from papermaking to digital transmission. And this technological advancement will sooner or later set off a revolution in the currency field. And the modern bank, which has been parasitic in human society for hundreds of years, will keep preventing the new currency king from ascending the throne.
Types of digital currencies
The current digital currency is divided into two types, pseudo-digital currency and digital currency. How to judge? All digital currencies that are based on the banking system and attached to bank accounts are all pseudo-digital currencies, which are essentially electronic banknotes. Kicking the banking system away and operating completely independently of the banking system is called a true digital currency.
Of course, as a currency symbol, it must be logically self-consistent in the three aspects of bookkeeping, counting, and delivery. If it can't be done, then no matter how advanced the technology used in this currency is, there is no possibility of replacing banknotes at all. There is only one digital currency that can achieve these three points-gold standard digital currency.
system of banknotes
First, let's take a look at how paper money is logically self-consistent.
Bookkeeping: banknotes are kept in bank accounts, and are cleared layer by layer through sub-branches, branches, and head offices. This system is very perfect.
Counting: Banknotes are counted by both accounts and cash. When paper currency is used as an entity, it is cash in hand. When paper currency is used as a virtual symbol, it is a number on the account.
Release: How to release the currency created by the central bank into the market? through commercial banks. Without the lending behavior of commercial banks, the currency will not be able to flow to the market.
This is the paper currency system, and it is a very ingenious structure. It has two core mechanisms, accounts and fractional reserves. With these two core gameplays, a huge banking system has been created. The system works so well that it can even abolish the real currency, gold. At the same time, we can also come to the conclusion that any digital currency that has both an account and a part of the reserve fund in the gameplay is an electronic banknote. For example, the central bank is now launching this.
The logic of a gold standard digital currency
How can a gold standard digital currency be self-consistent?
Bookkeeping: blockchain technology.
Counting: digital encryption and decryption technology.
Putting: Let me explain in detail how to put money into the market without a bank. Everyone's ID card is also your unique digital currency storage account.
The ledger is placed on the Internet through blockchain technology. The central bank, or the Monetary Authority (Gold Authority), keeps the country's public gold reserves. This reserve is the anchor of the value of the digital currency. The HKMA buys and sells gold unlimitedly at a fixed price every day. Buying gold is to put digital currency in the market, and selling gold is to recover currency.
So there are no banks in the market, how can you get a loan? In the future, everyone is a bank, and everyone can participate in a loan (just like buying and selling bonds), or borrow from the market. Of course, there will inevitably be a large number of rating agencies in the future to rate each loan project. The rating score is naturally related to the credit of the large ledger on the blockchain.
Human beings are not inseparable from banks, but when and how they should leave. Of course, in this process, the pains of reform are trivial. The real resistance is the International Bankers Group. Abolishing banknotes and banks is tantamount to overturning all financial systems that humans have had for more than 500 years. All the material assets accumulated by the West will also be wiped out in this revolution. And they will certainly not sit idly by.
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