The main battlefield of the future currency war will be digital currency

The A- share market crash has passed, and everything seems to have returned to calm. However, in another more important battlefield, the international currency market, undercurrents are still surging, and it is unknown when another crisis will break out. Recently, the price of gold has plummeted. The gold futures price on the New York Mercantile Exchange fell to $1,080 per ounce during the intraday session on July 20, the lowest price since early 2010. Against the backdrop of geopolitical tensions, gold has not shown its safe-haven function at all.

The funnier news is about the Greek debt crisis: A Greek F-16 pilot, Homere Sipostopoulos, secretly flew his plane to Turkey, withdrew a large sum of money from a Turkish ATM, and then flew back to the Greek air force base. This was because during the debt crisis, the limit for Greek citizens to withdraw cash from local ATMs was only 60 euros!

Of course, the most sensational news point of view, which is also the one that is most closely related to us, is about "the climax of the US dollar's killing of the RMB has begun", with the background of the sharp depreciation of the RMB exchange rate during the stock market crash. JPMorgan Chase also has a report pointing out that in the past five quarters, China's capital outflow has reached 520 billion US dollars. In the second quarter of this year alone, investors withdrew 142 billion US dollars from China...

Conspiracy theories about the "currency war" have become so common in recent years that we have become tired of hearing them. However, it cannot be denied that the status of a country's legal currency in the international monetary system is indeed proportional to the strength of the country. In order to dominate the international monetary order (or break the existing order), some countries are willing to start a war. Therefore, the "currency war" is also an "open conspiracy". China is currently actively promoting the internationalization of the RMB, and it is inevitable that it will be involved in this "currency war". However, when we pay attention to the turmoil in the international monetary system, we should not ignore the "invisible battlefield" - the field of digital currency, because this "invisible battlefield" is likely to become the main battlefield in the future.

Digital currency is becoming more and more down-to-earth

Since Bitcoin experienced a round of sharp rise and fall, it seems that Chinese people's attention to digital currency has declined a lot. But industry insiders revealed that the reason is that domestic media do not want to do free advertising for Bitcoin, because although digital currency is decentralized, it is inevitably planned and promoted by government forces behind it, and the initiative of Bitcoin is not in China, so China must develop its own digital currency. In fact, digital currency is increasingly used abroad and is increasingly accepted by the mainstream financial system. For example, Bitcoin company Coinbase received $75 million in Series C financing, and the New York Stock Exchange was on the list of investors, and Citibank is also developing digital currency Citicoin.

The renewed popularity of digital currency is different from the attention it attracted last time when the price skyrocketed. This time it is because its value has been more recognized and its application is more "down-to-earth". Although Bitcoin is the most famous digital currency, its number of users is actually only 500,000. The problem is that the technical threshold of the "mining" production mechanism is too high. Initially, Bitcoin was produced on the PC side, but this kind of currency based on computing power is easier to mine when the computing power is more concentrated, so there are "mining machines" dedicated to mining, which will exclude ordinary players who mine coins on the PC side. Moreover, as the price of Bitcoin soared, the number of users did not surge, and ordinary players were also excluded in the secondary market. The sharp rise and fall of Bitcoin prices and the complexity of mining coins are destined to limit its user growth.

Nowadays, digital currency entrepreneurs have realized this problem. Many digital currency companies regard user acquisition as their primary goal, and have made great efforts in the ease of currency production, the stability of currency value, and the expansion of application scenarios, making digital currency more like the legal currency we are familiar with, while maintaining the characteristics of digital currency. For example, "Gu Ke Bao" made by a startup team of Tsinghua University does not rely on the concentration of computing power, but on the very simple rule of "probability" to produce currency. Everyone can mine coins on their mobile phones, and even on sports watches and set-top boxes equipped with corresponding systems. In addition to automatic mining (called "threshing" on Gu Ke Bao), another way to obtain "Gu Ke Bao" is to do tasks, such as downloading an APP, you can get some "Gu Ke Bao". At present, the cost of acquiring customers for domestic APPs is very high, especially for some emerging P2P companies, and "Gu Ke Bao" has accumulated tens of thousands of high-quality real-name users. While helping APPs acquire customers, they also introduced external funds, which gave labor value to the digital currency "Gu Ke Bao".

Some basic functions of currency, such as value scale, means of circulation, and means of payment, are fully demonstrated in some digital currencies, and some chronic problems of legal currency are avoided, such as the impulse of inflation, etc. Digital currency is becoming more and more down-to-earth, and more like a currency that every ordinary person likes.

From industrial economy to sharing economy, from legal currency to digital currency

Digital currency has begun to "land", that is, its application scenarios are increasing, and value can be given through labor, making production and exchange more convenient. In this way, in addition to the legal currency we are familiar with, digital currency has also appeared. The biggest difference between the two is that legal currency needs to be backed by national credit, while digital currency does not. The similarity is that both will build a system, and this system is incorporated into the power of the state.

Behind the competition between fiat currencies is a contest of national strength. In the industrial economy era, when the British Industrial Revolution changed the world's production and lifestyle, the gold standard system was established with the British pound as an anchor. When World War II severely damaged European countries, the Bretton Woods system anchored by the US dollar was established. Later, the petrodollar further reflected the characteristics of the collusion between finance and energy in the industrial economy era. And because the United States has long had advantages in science and technology, culture and finance, the dominance of the US dollar cannot be shaken.

Today, human society is transitioning from the industrial economy era to the sharing economy era, and digital currencies have emerged. At this time, the competition between digital currencies shows different characteristics from the competition between legal currencies. The strength of legal currencies depends on a country's ability to seize resources - the petrodollar is a typical example; it depends on a country's industrial organization production capacity - when the US railways run through the country and Ford's industrial assembly lines are popular all over the world, it is difficult for the US dollar not to dominate. The competition for digital currencies depends on a country's exploration and innovation in the field of sharing economy. It is inaccurate to say that digital currencies are borderless currencies. Before the realization of world peace, governments of various countries must be competing for the dominance of digital currencies and promoting the establishment of an order in the digital currency system.

Think about it, what is the most important thing in the sharing economy model? Data. This is why people are wary of Facebook and Uber entering China, because these companies will grab the most core resources in the future sharing economy era - various data of people in production and life. Digital currency is most suitable for the sharing economy, because the sharing economy is based on the Internet of Things, and many models are reflected in scattered cross-border service trade. Using digital currency for settlement saves a lot of trouble in currency exchange. With the development of the sharing economy, there are more and more application scenarios for digital currency. If a country wants to gain competitiveness in the sharing economy era, it must develop its own digital currency - Citibank's launch of its own digital currency is a typical example. No one can deny that Citibank represents the United States, right?

Therefore, the main battlefield of the future currency war will shift to digital currency. This is a very strange battlefield because it has no distinct physical regional characteristics, but it is so clearly visible in the virtual world of the Internet of Things. This is a battlefield for data, the core resource in the era of shared economy. Whether China can win the initiative in this war, on the one hand, it must actively explore and innovate in the shared economy, and on the other hand, it must vigorously support its own digital currency, so that the dual-wheel drive of industry and finance can be achieved, thus realizing the great rejuvenation of the Chinese nation in the new economic era.