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Golden Observation丨Is the decentralized open source monetary policy worth trying?



Golden Finance Blockchain, April 10th Today, each of us lives in this globalized society, and central banks around the world are also establishing and maintaining monetary systems in various ways. It has brought about a great change from centralized bank to decentralized bank. Looking at the history of money, it can be called a great history. The book "The Rise of Money: How Finance Affects World History" (The Ascent of Money) written by Niall Ferguson introduces the staged changes in money in detail. From nicks in rocks to blockchain transactions that sweep across the globe in seconds.

However, in today's emerging market, how are new currencies produced, why are currencies released, who releases these currencies after they are created, and who decides how many dollars, euros, and Japanese currencies there should be in the market? Dollars and pounds, how do we make money? A series of questions are really very interesting and seem inscrutable.

Golden Morning News | A list of important developments overnight on May 27: 21:00-7:00 Keywords: New Coronary Pneumonia, Futian District, Xiongan Taxation Bureau, Novi

1. The cumulative number of deaths from new coronary pneumonia in the United States exceeds 100,000.

2. The "1+9+N" special fund policy for industrial development in Futian District, Shenzhen covers the blockchain.

3. Xiongan Taxation Bureau will explore the innovative application of blockchain in taxation services.

4. Facebook rebranded the Calibra digital wallet to Novi.

5. IMF official: The central bank can cooperate with the private sector to establish a CBDC.

6. Gemini co-founder: Cryptocurrency adoption requires a certain degree of regulation.

7. The May contract of CME Bitcoin futures closed down 4.25%.

8. The blockchain voting platform of the Russian ruling party was attacked by DDoS.

9. The Blockchain Professional Committee of Hebei Information Industry and Information Technology Association was established.

10. The highest price of Bitcoin in the day was 8880 US dollars, and the lowest price was 8700 US dollars. [2020/5/27]

The traditional financial system is too centralized

Golden Morning News丨A list of important news overnight on April 26: 21:00-7:00 Keywords: Ministry of Industry and Information Technology, DC/EP, V God, Bitstamp

1. Ministry of Industry and Information Technology: Actively apply modern technologies such as blockchain to promote the modernization of government governance capabilities and governance systems

2. Zou Chuanwei: In DC/EP, the use of blockchain for digital currency confirmation and registration is in an auxiliary position

3. Chen Wen from Southwestern University of Finance and Economics: Short-term DC/EP will marginalize clearing institutions such as UnionPay with low possibility

4. Analysis: In the future, service providers with payment experience and licenses are expected to intervene in the DC/EP industry chain

5. V God: Ethereum's soon-to-be-outdated mining hardware can be directly used for zero-knowledge proofs

6. Bitstamp has suspended trading due to technical problems

7. Foreign media: Data show that nearly half of DeFi and OFI startups are headquartered in the United States

8. F2Pool Global Business Director: Bitcoin will have an overall bullish trend by December 2020

9. Bitcoin fluctuated within a narrow range, with a daily high of $7,566.75 and a low of $7,480. [2020/4/26]

I don’t know if people have given much thought to who actually runs the currency we use – the power the US wields on the global stage is known to be staggering. There is no doubt that the Federal Reserve is also the most successful central bank on the planet. They have transformed the US dollar from a single national currency into a global settlement currency. Just for this, the Federal Reserve has accomplished a very remarkable achievement. The world must bow to its knees when the Fed creates more dollars. But did you know that there are only 7 people in control at the Federal Reserve. As a global settlement currency, the fate of the U.S. dollar is decided by only a few people. Isn’t this degree of centralization not high?

Golden Morning News | Coinbase: ETC was attacked by double spending Japan may approve a cryptocurrency trading fund (ETF): 1. Coinbase: ETC was attacked and included double spending of nearly 500,000 US dollars.

2. The open capabilities of the Alipay Mini Program include blockchain technology.

3. Japan may approve a cryptocurrency trading fund (ETF).

4. The Shanxi Provincial Blockchain Research Association launched a blockchain traceability technology platform.

5. The first domestic blockchain-based oil sales project landed.

6. Wang Yongli, the former vice president of the Bank of China: the digitalization of legal currency is an inevitable direction, and Bitcoin is just a currency in the business circle.

7. Colorado introduced a securities law exemption bill for cryptocurrencies.

8. Less than 1% of addresses hold nearly $62 billion in bitcoin.

9. Zhou Ping, Ministry of Industry and Information Technology: China is striving for more voice in the international standards of blockchain. [2019/1/8]

In addition, in Europe, the people who lead the issuance of the euro are just a handful of scholars headed by the president of the European Central Bank. These guys are old, who do you think they'll side with when they decide to issue more euros? Will they represent young people, or minorities, or the poor? These are all unknowns.

Analysis| Golden Disk: The proportion of Bitcoin’s market value continues to increase: Comprehensive analysis of the Golden Disk: According to the data, the proportion of Bitcoin’s market value continues to increase and has reached 58.7%. ; On the one hand, due to the expectation of ETF, some investors have deployed Bitcoin in advance, which makes the funds more concentrated. [2018/8/27]

Here I have to mention a big man - Agustín Carstens, general manager of the Bank for International Settlements (BIS). He made it clear that central banks should track all spending by users in real time. Be aware that in some countries today, the government needs to obtain a warrant to access user payment data. What are they most likely to do if Agustín Carstens - the "big boss" - gets his way? Quite simply, it is the creation of a Central Bank Digital Currency (CBDC). Agustín Carstens makes no attempt to disguise the true intentions of the BIS, who even wants to make full-blown financial regulation the new normal. That's really quite disgusting.

It seems that these people who manage the central bank are either appointed by the top government or elected internally, but it is basically difficult for the public to understand the selection process of the central bank's management. If we put the most powerful central bankers in the world together in a room, it is estimated that there will be less than 1,000 people in this room at most. And it's just 1,000 people who control the pulse of the world's currency. Thinking about it, don't you think it's crazy?

A new financial system begins to emerge

In recent years, entirely new financial systems have come to the fore, with the advent of Bitcoin completely changing the game thanks to innovative protocols and a very simple monetary policy. The concept of Bitcoin is quite simple, the supply is fixed at 21 million from the beginning, and everyone is attracted to this "21 million" Bitcoin. If 100 years from now, we can fit nicely into "21 million" bitcoins, then all the monetary problems in the world will be solved. However, this is only a very idealized idea, and the reality is that a truly effective monetary solution is much more complicated. This first-ever monetary policy put into the blockchain will not be the best solution for mankind.

Unlike Bitcoin, Ethereum does not have a fixed money supply, but instead changes over time or as the protocol evolves. In fact, Ethereum can be seen as an open source and open economic engineering system, on which everyone can publish anything and interact with any type of code - "Ethereum is a protocol of protocols". The monetary policy of Ethereum is relatively mature and continuously enhanced.

Ethereum Foundation researcher Justin Drake has come up with a novel idea that Bitcoin is expected to be inflationary for decades, while Ethereum is actually likely to be deflationary for a decade or more , if this happens, the circulating supply of Ether will gradually decrease. And for a store of value, contractionary policies seem to be better than expansionary ones.

In addition, there is a fairly successful project in the field of decentralized finance (DeFi), that is Maker DAO. They take in collateral such as Ether and mint a stablecoin called "Dai". There have been two major revisions to the system, and the current amount of collateral locked up exceeds $7 billion. And here's the magic of Maker: Anyone can contribute to the system, or participate in the governance process around its monetary policy, and many people gather every week to discuss interest rates and risks to the financial system. A study of the Maker protocol interface found that those who built the system spent a lot of time and effort making sure it was safe for everyone, while all work was open source.

Here is also a brand new encryption economic mechanism Fei. The Fei team is adopting a brand-new approach to creating decentralized stablecoins, aiming to further improve the scalability and capital efficiency of stablecoins in the DeFi field, and is currently exploring many highly experimental new mechanisms. It is worth mentioning that the Fei Labs team is already preparing for the release of the new protocol. The Genesis Group has just launched (, and now anyone can participate.

Most stablecoins today are pegged to the U.S. dollar or effectively create a synthetic asset. However, in the not-too-distant future, various open source monetary policies are likely to emerge continuously, and we will see more interesting forms of stablecoins, such as RAI, FLOAT, and OHM. Decentralized monetary policy is one of the most exciting ideas ever. Would you try decentralized monetary policy?

Part of this article comes from Yahoo Finance


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