The essence of digital currency

The endorsement of credit by the state is valuable and has the function of credit creation, which will have a substantial effect on the economy. Legal digital currency, like paper money, is essentially a pure credit currency. Digital currency can further reduce operating costs and apply it to a wider range of fields with higher efficiency.

"The emergence of digital currency follows the inevitable law of currency evolution and is also the inevitable result of the development of science and technology. From the historical process, the carrier of money has evolved from shellfish and precious metals to paper money, and then to the popular form of third-party payment electronic money in modern society.

In essence, what they pursue is convenience and low cost of transactions, and this trend will continue to develop, and the manifestation of the future society will be digital currency. The first thing to be solved is technical obstacles. Although today's blockchain is regarded as the Internet in the 1990s, its future is limitless. But it is not mature enough to support the huge payment system. At the same time, the issuance of statutory digital currency will greatly increase peer-to-peer transactions, bypass the original regulatory system to a certain extent, and easily facilitate illegal transactions. Because digital currency makes it very convenient to convert deposits into cash, once financial panic and financial risks occur, it will also accelerate the infection and increase the difficulty of supervision. In addition, the statutory digital currency will get a lot of user data and transaction information during its use. How to store and manage these data to prevent the disclosure and illegal use of user information is also an important challenge.