What is the difference between the central bank's digital currency DCEP and Bitcoin? And current investment advice

Yesterday, a screenshot of the Agricultural Bank of China testing the digital RMB was circulated in various groups. A person close to the central bank said that the test wallet is real, but it is currently limited to whitelisted customers, and four outlets in Shenzhen, Xiong'an, Chengdu, and Suzhou are open to participate in the test.

In addition to the Agricultural Bank of China, several other large state-owned banks also have corresponding internal testing wallets, which will be opened one after another.

The full name of DCEP is 'Digital Currency Electronic Payment', which is the legal digital currency issued by the People's Bank of China.

Last year, when the People's Bank of China released the news of DCEP, I analyzed it in an article. This event is very important for the country. It will be a key and important step for the RMB to go global and lay a solid foundation for the RMB to become a global currency. But for us ordinary people, this event has no substantial change in user experience, and it also makes it easier for regulators to supervise personal consumption and capital flows.

According to the news released by the People's Bank of China, the digital RMB is a mixture of multiple technologies including blockchain. Since it includes blockchain technology, it can track the ins and outs of transactions, so when using the digital RMB, in theory, every user's funds in and out will leave a record in the system.

If in the future all our "money" is distributed in digital RMB, then no one will be able to evade taxes, and any flow of funds may be subject to supervision.

Some friends asked whether DCEP will challenge Bitcoin? In fact, DCEP and Bitcoin are two completely different things. DCEP is essentially RMB, but it is a digital version of RMB. Therefore, there is no possibility that DCEP will challenge Bitcoin. To be more precise, is it possible for Bitcoin to challenge all legal currencies, including digital legal currencies?

During this period, I not only paid attention to the development of the epidemic, but also paid close attention to the changes in various industries and the feedback from my friends. Combining this information, I have a strong hidden worry: although the epidemic seems to be gradually under control, the secondary disaster caused by the epidemic is slowly coming.

The biggest problem brought about by this epidemic is the depression of all industries except for a few. This depression was not obvious in the early stage of resuming work, but now the impact of the shutdown has gradually emerged and started to take effect. In recent days, almost all my friends have reported salary cuts and layoffs, and these friends are not in the foreign trade and service industries that have been hit the hardest. This is enough to show that the deterioration of the situation is spreading from the service industry to other industries.

I personally think that the real outbreak of this deterioration will occur at the latest after the two sessions, and if it is really serious, it may even happen before the two sessions. But whether it is before or after the meeting, I am afraid the time is not far from now.

The consequence of this deteriorating situation is that personal disposable income will be greatly reduced.

In the previous article, I wrote that this year's investment strategy is first and foremost to ensure that you and your family have enough living expenses, otherwise don't make any investments.

Looking back now, I still hold this view, but I think the severity of the economic situation was underestimated at the time, and this severity will directly affect every digital currency investor.

As people have less and less disposable funds, they will participate in digital currency transactions less and less. In addition, the recent surges and plunges in Bitcoin have completely wiped out a large number of contract users, and now there are almost no traders left in the circle. This will directly affect the revenue of major exchanges.

But on the other hand, major central banks around the world are continuously releasing money, and part of this money will eventually flow into exchanges and digital currencies.

These two forces are opposite. It is difficult to judge which force has a greater impact on exchanges and digital currencies, but I think the central bank’s liquidity may not enter the digital currency market so quickly, it will take some time.

My previous suggestion to everyone was that we should focus on Bitcoin, Ethereum and the platform coins of the three major platforms. Now based on the above logic, I re-examine my previous suggestion and I think it should be modified to some extent. The specific suggestions are as follows:

As for digital currencies, it is not easy to see how these two forces will work in the future. Those who have spare money can still invest in Bitcoin and Ethereum. As for the platform coins of the three major platforms, I think it is very likely that the performance will decline sharply in the future as the transactions become less and less. Therefore, I suggest that investors can postpone the fixed investment for the three major platform coins.

If my prediction is wrong, the transactions on the three major platforms will remain brisk in the future, and it doesn’t matter if we missed the fixed investment during this period; if my prediction is not too outrageous, the darker moments of the exchange are still in the future, and we can restart the fixed investment with great efforts at that time.