Zhu Jiaming: a runaway money world, don’t underestimate the value of the currency of heterogeneous human
Zhu Jiaming China well-known economists done on the evolution of world monetary system speech recently in the “Long Yingtai cultural foundation, entitled” Nixon from the closing of the gold window to see a runaway money – major issue of modern human existence “.
The former general secretary of the CPC, Zhao Ziyang relied on “four gentlemen” listing reform scholars put forward and emphasized in his speech and answer questions from the audience: bitcoin (Bitcoin), block chain (Blockchain) and digital (digital, digital currency), there is an inherent relationship between principle, logic and technology, there is difference of three between them, but also inseparable.
Among them, understand bitcoin is the key, this is not only because bitcoin is a typical representative of the virtual currency, but also provides a logical basis and prerequisite to mature for the block chain, as for today talk about digital currency innovation, is to absorb the thinking, principle and technology and bitcoin blockchain.
Now, a lot of people denied bitcoin, but the one hand advocate block chain, or that the digital currency can become a new independent, is wrong.
In this connection, Asia Weekly in October 21st interview with National Taiwan University visiting professor Zhu Jiaming, the following is an interview:
In September 20th this year, the U.S. federal judge Alison Nathan (AlisonNathan) to make bitcoin is the currency of the ruling, ruled that what is the impact? Bitcoin will not change the fate of the future?
I am very happy, from interview about this problem. In September 20th this year from the federal court for the ruling bitcoin, countries and Chinese media have been reported, but not all estimates of its significance.
Since the birth of bitcoin, the governments of the world’s attitude, can be summarized as follows: a known, alert, love hate. Concrete can be divided into three categories. First, a positive and open attitude to the countries, such as Germany, Belgium, Brazil, Australia; second, no clear attitude, not against, also does not support, no corresponding laws and regulations, many countries such as Canada, Italy, Japan, Russia, Singapore, South Korea; third, given a warning. To neglect and opposition.
In all countries, is the attitude of the United states. In general, the United States bitcoin, open and maintain a conservative cautious attitude. In early 2013 November, the United States Senate held hearings bitcoin. After that, the Ministry of Finance and the State Taxation Bureau, U.S. Futures Commission, bitcoin made my own definition.
For example, the IRS ruled that bitcoin is a kind of “assets”; the Treasury believes bitcoin has become the object of Taxation and innovation potential, can be incorporated into the regulatory framework; U.S. Futures Commission will bitcoin as a transaction “goods”. Under the above background, the United States in accordance with the principle of judicial independence, if the federal court intervention bitcoin, and to make decisions about bitcoin’s ruling, really great significance. Because the federal courts only accept legal cases involving federal.
The United States federal judge Alison Nathan accepted Anthony Mulggio (AnthonyMurgio) by bitcoin platform money laundering case, will inevitably have to face the legal definition of bitcoin. Nathan judge bitcoin clearly defines the hitherto unknown: “according to the ordinary meaning of the term, bitcoin is money. Bitcoin as a means of payment for goods and services, or the use of bank accounts directly from the trading platform to buy bitcoin. Therefore, their role and the same money, is used as a medium of exchange and payment means. “
It is worth noting that Alison Nathan Obama appointed in 2011 by the gay female federal judge, and is a federal judge in the United States financial center in Manhattan area. Alison. Nathan’s ruling will raise the question of bitcoin to national level, announced the virtual currency in accordance with the definition of money. The United States is the implementation of the common law system inherited the “precedent” principle. So, in the long run, will be the fate of bitcoin virtual currency in the United States and the impact should not be underestimated.
You as an economist, a deep study on the history of money, do you think bitcoin is money?
It is difficult to simply say “yes” or “no”. Because the first need to know what is money? Since ancient times, there is the premise of monetary credit. Credit is the first, after the money. So, as long as the credit forms evolve, change the form of money.
In the contemporary world, to support the national currency credit (FiatMoney) is the main form of the currency. However, money is not the only form of the currency. That is to say, credit money is not entirely the national credit currency. Now, popular in the world of non national currency at least three forms of credit.
First, the regional credit system based on currency (Localcurrency), also known as the local currency, currency, currency or supplement residential private money, up to as many as two thousand and five hundred. According to the strict definition of money even, also up to more than 200 kinds, namely Europe there are hundreds more. In theory and practice, the regional currency can play a medium of exchange and a store of value functions in a certain range, and can be used to pay taxes. Second, the company credit system based on currency, such as Visa, Master and other companies, credit card voucher, coupon protection (Companyscrip) (Militaryscrip). Third, the value of precious metals such as gold and silver money based on commemorative coins.
Whether virtual currency is the currency, the key to see whether there is a specific credit basis. Bitcoin short history, has created a unique credit system, the credit system is no longer visible on the government, community, company, but the personal union. In this sense, bitcoin is a form of currency. Not only that, bitcoin has demonstrated its comprehensive functions of money. Alison. The basic function of Nathan bitcoin bitcoin is according to the nature of the ruling with money.
People need to change a way of thinking, that only on the basis of national credit “legal tender” is the only form of money money, then this is the standard form of currency that denies the existence of other. In fact, we can compare the bitcoin and North Korea’s “legal tender”. Bitcoin no state support, it can achieve the global circulation, which proves that bitcoin exists credit basis of it; and North Korea’s currency has “national force support”, but the world’s peoples will not trust the money.
Now a very influential argument, although bitcoin is a borderless currency, is controlled by a few countries and a few companies, they can use the software and technology bitcoin changes, independence ultimately destroy bitcoin, what do you think of this?
This is the principle and the technical connotation of bitcoin ignorance and misunderstanding. I speak only two points: first, the total supply of bitcoin is completed, the mining quantity is decreasing, while the opening into the exploitation. So, the competition will continue to increase the cost of mining. Mainly displays in: mills will be more expensive, more consumption, more and more long time.
In bitcoin just beginning, anyone can download a software to dig bitcoin, then need to mill machine, and constantly upgrade; people find more and more time in the past, one day a person can pick a few bitcoins, now few people, dozens of people spend many days, it may not be able to. To a bitcoin. So, the monopoly of bitcoin development is very difficult, almost impossible. Second, the biggest advantage of technology bitcoin transaction information also includes full transparency. Bitcoin system is a network of books, all of the transaction information record. It also fundamentally prevent monopoly motivation.
So, how do you explain the bitcoin Price Volatility?
The question now is: bitcoin Stock Co., new bitcoin supply is slow, while bitcoin demand continues to expand, resulting in bitcoin scarcity in the market. In this case, bitcoin has become the object of speculation. Then, a few companies may occur, or even manipulate bitcoin market price situation.
You know, in today’s world currency markets, each currency exchange rate in the floating state, can be speculation. Bitcoin market price fluctuations, reflects the change of market demand for bitcoin, also proved that the nature of bitcoin currency.
Now, seems to be just a few people use bitcoin, what are they? Bitcoin is not integrated into daily life, the public how to explain?
Yes, now the use of bitcoin belongs to the minority, belongs to those who are more familiar with the people on the Internet financial. Regionally, mainly in developed countries and regions such as Japan, Britain and Hongkong.
We must admit that bitcoin is not integrated into the daily life of people. This is not a complicated problem. Because, as I said before, the money is the basis of faith and credit itself is a kind of social relationship. The relationship between social needs and the development of long-term culture. If bitcoin is flawed, that is still bitcoin has not been able to create a market based on bitcoin, bitcoin social relations. Why? Because for most people, know how to get rid of a bitcoin, bitcoin bias is not an easy thing, the use of bitcoin is more difficult.
However, in my opinion, the popularization and the daily life of bitcoin, it is only a matter of time. I often use the concept of “people” in the bitcoin speech, just want to tell the audience, now in accordance with other types of virtual currency created by the thought and the block chain bitcoin ideas, technology is not difficult, such as bamboo shoots after a spring rain. As long as all bitcoin can continue to produce and spread, will eventually lead to more public participation. For the network generation, understanding, acceptance and use of bitcoin will gradually become a major trend.
As long as there is formed a certain scale and regional like bitcoin virtual currency market, “Metcalf’s law” (more benefits, the number of users of a network then the whole network and the network in each computer is greater the value) occurs, the virtual currency will enter the stage of expansion index. But now there is no entering such a historical turning point. You can make an idea: if there are one hundred people in Taipei to use bitcoin, after a period of time, will jump to one thousand people. This is like people use WeChat and Line.
What is the basic meaning of bitcoin bitcoin or have? If you hold an optimistic attitude to bitcoin?
The economy in the face of many problems, the most important is hard to solve the problem of stable currency value based fundamentally. In this case, “after the collapse of Bulten Woods monetary system”, more and more serious.
In Chinese, for example, in the early 1980’s, a penny of money, ten thousand yuan is already rich scale. Today is in yuan, Penny has lost the meaning of existence. One yuan is a penny one hundred times. So, in the past ten thousand yuan is rich, now at least by one hundred times, is one million.
In fact, the purchasing power is limited to one million. In first-tier cities, one million yuan can buy two, thirty square meters of housing. In 2008 the outbreak of the world financial crisis, major countries have implemented monetary easing, not only their own currencies, and he led the country’s currency devaluation. People have to bear the consequences of currency devaluation and inflation.
In short, the greatest tragedy of modern humans, only work hard, it is possible to make their income to keep up with the currency devaluation and inflation. So, how to maintain the value of the currency, is a common topic of human. In theory, the currency non nationalization is a choice. Bitcoin and other virtual currencies provide a choice of an experiment.
In the economic history of the world, has happened again and again after the crisis, the crisis will happen, if the world is unpredictable and completely out of the financial crisis, bitcoin and bitcoin “who is likely to be a major rescue plan, so, do not underestimate the potential value this alien to human currency.
I bitcoin, specifically the virtual currency has always held open and cautious optimism. Bitcoin is not utopian, is a test of human. To a country, a few countries, a period of time, a few hours of bitcoin virtual currency and make a conclusion is premature.
Recently, the famous American online retailer blockchain platform developed by Overstock, the U.S. Securities and Exchange Commission approved the public offering of shares. The company of the securities trading platform bitcoin blockchain based on will be started at the end of the year. This is a very worthy of attention.
Bitcoin situation, Chinese
China, will not let bitcoin legalized? Chinese, why is the world’s most powerful bitcoin speculation?
No simple answer to this question. Overall, I still enjoy Chinese central bank and the government about bitcoin attitude and methods: never announced bitcoin illegal, not announced its legitimacy. Or, neither said bitcoin is the currency, nor said bitcoin is not money. However, bitcoin has done a lot of restrictions, introduction of the relevant policies, such as the December 5, 2013 Chinese people’s Bank and other five ministries jointly issued the “notice” on guard against the risk of bitcoin, bitcoins in Chinese, limit the development of.
After 2013, Chinese, is an important area of speculation bitcoin, is probably the fact that the main reason is: RMB export has many restrictions, bitcoin can be RMB derived from the media, the RMB for bitcoin, is convertible into dollars, euros and other international assets. For this. Of course China government is very sensitive, take necessary measures to restrict and containment.
The crime of bitcoin is helpful in money laundering and the like?
Two years ago, Taiwan had a case, is a Hong Kong businessman kidnapped the kidnappers asked for ransom in bitcoin do. This is in recent years in criminal behavior very creative case. However, the kidnappers did not think bitcoin operation is not universal and mature, but for the police to provide ample time. This is not a bitcoin mistake, any currency can be used for money laundering and other crimes. For example, someone with a diamond and diamond is not the problem of money laundering.
For a problem, what is common between the bitcoin and “blockchain”?
The blockchain thought is the basic idea of bitcoin; in other words, from the principle of bitcoin will derive the blockchain principle. Specifically, the concept of the blockchain is bitcoin books concept, this book can not be changed, it challenges, to subvert the people’s accounting system, account system. The essence of technology source blockchain in bitcoin encryption method, through the public key and a private complex system composed of the key.
Between bitcoin and “blockchain”, there are four elements in common: shared accounts; intelligent (smart contract contract); can effectively and thoroughly protect privacy; participants need not discuss consensus with each other. The above four elements, has a strong dependency relation.
In the above four aspects, the core is the so-called intelligent contract. So, can be defined as a kind of intelligent block chain contract form, the blockchain technology need to protect intelligence contract never been hurt. Not only that, in the maintenance of intelligent contract of mutual trust at the same time, also can realize the mutual nonaggression between the privacy rights of each party to decide how much can open and share rights. In short, the blockchain all parties is not passive, everything in a controllable range.
In today’s society, people are faced with two problems: first, the property of money. In the agricultural society, the property may be a piece of land or gold or silver, housing, factories, machines. But now, the basic form of people’s wealth is a form of currency, commercial banks will have to deposit money. However, how to ensure the choice there is no risk to the commercial bank? Not possible. That is, people is master man’s life and family possessions in the financial system can not control the.
Second, now the identity of people need to government agencies or business endorsement, such as identity cards, driver’s license, insurance card. The above two problems, from the proof of identity is to man’s life and family possessions, to establish close relationship needs and national financial institutions or.
So, there will be a series of problems. The first is the credit crisis, government agencies and financial institutions bankruptcy problems; second is the efficiency of these institutions; third is the cost, time cost, money cost; fourth is the problem of convenience. The invention and application of block chain, can effectively solve these problems. Because the block chain provides a new choice, people can self organize, take control of the right of privacy, through intelligent contract implementation supervision of their own wealth, and away from the passive state to confirm their own identity, will no longer occur how to prove that “I am me” situation.
Of course, the block chain for the government, enterprises and banks, but also has a positive meaning. For the government, it can also create new contractual relationship with the block chain and people. For enterprises and financial institutions can maintain a more stable relationship with the user through the block chain, because the user has to overcome all past issues of concern.
What is now using the block mechanism in the chain?
First of all, some large companies and financial institutions, large multinational companies, such as IBM The early bird catches. These companies will be very easy to block chain and their business and the traditional operation mode change. Secondly, the government is. Because the blockchain principle of the efficiency of the government, to strengthen government control and influence have obviously significance.
Now “the greatest significance blockchain heat” behind where?
By using the block chain and still need the technology and capital investment. Now the “blockchain heat”, almost every day a new message block chain technology development and application, all kinds of emerge in an endless stream block chain technology system, the emergence of technology system of new generation of many chain blocks. The significance of this phenomenon is mainly focused on three aspects:
First, economic significance. Block chain can lead to transaction cost, the unit investment of time, money and manpower decreased. That is, the block chain is the first to improve efficiency, improve the efficiency of estimation is to save, can save more than ten thousand times the cost. The block chain also caused small increase in the proportion of currency trading. For example, the Alibaba produced by Alipay and the balance of treasure, in essence is a form of block chain, establishes a contract between public and Alibaba. The Alibaba is not a bank, but some banks, representing the evolution direction of the financial system.
Second, social significance. The relationship between block chain will re organize the market, re organization of society, re organization and user. The blockchain will promote self organization members of society. Block chain participants, some are free, not mandatory. We can imagine that if one day, people realize their own needs through various forms of chain block, means that the formation of a new social system. At least in theory, is entirely possible.
Third, political significance. Block chain has emerged transformation of democracy value, for example, provide technical support for direct democracy.
Why can China, block chain technology leader in the world, this is how to do it?
First of all, China to block chain initiative. The initiative comes from great power mentality. China Internet development is a typical advantage mode. Chinese obviously wants to lead in the development of the blockchain.
Secondly, China financial circles have a strong sensitivity to the blockchain, in the people’s Bank initiative, hope will serve as one of the means of the new financial block chain technology, therefore, go all out to promote.
Third, sufficient human resources with the development and application of China blockchain.
Fourth, in Chinese, has been a considerable number of institutions and enterprises in the chain do not know block principle and technical conditions, has been done with block chain features work. When they understand the blockchain, effectively improve the product. Alibaba is a typical.
Will not have what problem?
Two questions: first, the blockchain “worship”, that is the universal chain block. Second, block chain development “movement”, repeated work, caused great waste. In fact, today the blockchain is already a reality, Yu Yunduan has already existed, now the most important work is how to use block chain, which is a lot of people did not want to understand.
At present, people are beginning to talk about and pay attention to digital currency. What is this digital currency and electronic money? How to understand the relationship with bitcoin, block chain?
In order to answer this question, must be a misunderstanding exists in correcting people’s thought: digital currency is the electronic currency. In fact, electronic money is an old concept. Now the world currency, the basic realization of the electronic. People take the money and put the money in a bank teller machine street, is a kind of application of electronic currency; people use credit cards, it is also an application of electronic currency. After entering twenty-first Century, the realization of electronic money, fairly easy in technology. In the Nordic countries, has the basic realization of electronic money, money is no longer needed.
By now the digital currency is not electronic money has been popular, mainly refers to the virtual currency bitcoin encryption, for example. This virtual currency does not have legal tender status of government credit support. In addition, there are government led “legal digital currency”, its biggest characteristic is to absorb and transform the principle and technology of virtual currency and block chain bitcoin representative, the traditional currency and virtual currency, and block chain combination.
The problem is that the traditional currency need the central bank to the center, need seigniorage, the virtual currency is the nature of non central non central bank, is to exclude seigniorage. For example, the “legal” digital currency will need virtual currency and the blockchain flat, to the center of the change of bureaucracy, or part of the center center. In short, the “legal” digital currency in the future depends on whether you can achieve a variety of technical transformation of existing virtual currency, as long as the “good”, “bad” discard the implementation of innovation. So, the “legal” digital currency facing challenges in principle, technology and method, there is considerable difficulty. Can foreknow, even if the “legal” digital currency to achieve a breakthrough in principle and technology of the front, but also “symbiosis period” and traditional legal digital currency currency is very long.
How to progress in this legal digital currency?
In general, in the world, the legal digital currency is still in the initial stage. In the United States, the Fed is still there are different voices on the non governmental regulation mode of digital currency, legal digital currency has not mentioned. Most of the countries in the euro zone’s development of legal digital currency, the central bank generally cautious tendency through the market to promote the development of digital currency non government, avoid the government monopoly of digital currency. Among them, Holland on digital currency to the highest degree of concern, the Central Bank of Holland after two years of research, launched after the test of DNBCoin.
In Britain, the Bank of England has been discussed the feasibility by the central bank to issue legal digital currency. In Switzerland, 2015 developed a block chain technology, with clearing function, can also function of virtual currency trading on the trading platform of financial institutions on the association, and the central bank account based on. Australia on the digital currency more positive attitude. In Asia, South Korea in 2010 the Supreme Court has confirmed that the virtual currency equivalent to real money. In October this year, the twelfth Internet Financial demo day (FinTechDemoDay) held in Seoul, South Korea’s Financial Services Commission (FSC, FinancialServicesCommission) announced that the Department will lay the foundation for the “Popularization” digital currency system.
Compared with the western countries, Chinese government attaches great importance to the development of legal digital currency, but also put a lot of manpower and financial resources. The central bank believes that the future of Chinese, exists to the center and the center of the new area between the poles, through different types of block chain system in this field, to meet the different needs of market and society, therefore, to promote the legal digital currency to society is a historical trend. 1 2016 20, the central bank Chinese clear for their digital currency issue as soon as possible. But, after all, China huge economies of scale, economic sector and regional imbalance. Chinese digital implementation of the legal currency, also takes years of effort. Therefore, the central bank raised China: the bill market can become the first experimental legal place of digital currency.
In any case, the legal Chinese digital currency, so there may be an unexpected breakthrough. I am very concerned.
Russian Federation savings bank (Sberbank) vice president AndreySharov said: the blockchain will allow banks to disappear within ten years, this view will be too exaggerated?
The theory is not an exaggeration, technically feasible. Because a country can block chain technology, finally realize the central direct management of the whole country financial and monetary. However, it will encounter a variety of non technological and social opposition. For example, the rich and powerful people, they can hardly accept their wealth is completely transparent, every transaction is recorded clearly, and cannot be changed, making corruption become impossible. Of course, for ordinary people, no, they didn’t have much money, not afraid of other people, who love to see who.
Taiwan electronic financial China, why far behind, is not optimistic about the future, where is the key?
After 2013, Chinese several conditions appear at the same time: first, jumping email era, the computer age, directly into the intelligent mobile phone era; second, Alibaba has created third party payment platform; third, retail platform and market size combination. So, have the dramatic effect of explosive like electronic commerce and electronic banking. Such a situation is not necessarily can be repeated in other countries, including Taiwan.
The mainland electronic financial leap growth, the government apparently did not play any role, but the folk spontaneous behavior?
In China, government of all kinds of financial innovation, in general, in the initial stage of tolerance. For example, not to create the Alibaba third party payment number tolerance, today’s situation is impossible to imagine. Of course, in the government after a period of observation, often take gradually standardized and strict. How is the effect, need specific analysis.
Taiwan financial sector is too conservative
In recent years, Taiwan in the financial sector, is clearly too conservative and cautious, rarely gave people more free space. However, Taiwan is still a strange place, although the strict control of financial fraud, is developed in the world.
In comparison, the rapid development of electronic banking, what advice do you have in Taiwan?
If you must answer the most important advice is three points: first, Taiwan’s financial and banking system reform. For example, the Bank of Taiwan, or just a few decades ago, very troublesome, especially to seal, including money, to seal, this is the world without practice is outdated. For example, the Bank of Taiwan branch is quite dense, it was developed banking industry performance. However, in a standard, and is the reason behind the Taiwan Internet financial.
Second, Taiwan needs to consider how to achieve financial freedom, attract foreign capital inflows, stimulate the economic development of Taiwan. Taiwan’s central bank president Peng Huainan had a strong sense of financial regulation. Third, allow the society to discuss Taiwan central bank’s monetary policy. Over the past two to thirty years, Taiwan itself is changing rapidly, but Taiwan’s external economic environment, Taiwan has no significant adjustment of monetary policy structure. Taiwan needs a system rather than scattered assessment of monetary policy in Taiwan. A public concern not bound together in a common cause of monetary policy, or a society does not let people pay close attention to and discuss the monetary policy and social atmosphere, such people are not mature.