The "scenario" problem of digital currency

The scenario problem is the core problem of the digital economy and its currency system. There is no wrong personal choice, only imperfect "algorithms". Only through continuous improvement and effective calculation can we ensure that the scenarios of the digital economy and its currency system continue to occur and expand.

Having a digital payment system first, and then finding a "scenario" to implement, often fails

The stories we often hear are that some development and innovation teams "discover" a certain realistic "need" in the economy and society, and believe that they can use "advanced" digital technology and "innovative" concepts to meet it commercially. As a result, a complete set of well-run digital community systems, including digital payments, has been established. Next, we ran into a difficult problem: Where is the "scene"?

Without "scenes", the so-called "needs" will become a mirror image, elusive and unattainable. There are "needs", but no "scenes". This embarrassing situation is constantly emerging in reality. In fact, there is no need to leave the "scene" at all. Since "scenario" is the key to digital innovation, why not find or establish "scenario" first, and then establish a digital payment system?

Yao Qian: The relationship between the central bank’s digital currency based on accounts and tokens is not an either-or relationship: Yao Qian, director of the Science and Technology Supervision Bureau of the China Securities Regulatory Commission and former director of the Central Bank’s Digital Currency Research Institute, said at the 2021 Spring Meeting of the International Financial Forum (IFF) today , the two technical routes of the central bank's digital currency based on accounts and tokens are not an either-or relationship. In fact, a token is also a kind of account, but it is a new type of account, which we call an encrypted account. Compared with traditional accounts, users have stronger self-control ability over encrypted accounts. (Fengwang Finance) [2021/5/30 22:56:47]

With "scenario", the innovation of digital payment or digital currency does not necessarily happen

The fundamental content-zce of economic activities is "decision-making activities", that is, making choices. The digitization of the economy is the so-called digitization of decision-making, or the digitization of economic choices. It requires the digitization of payments, which in turn requires the digitization of money.

The so-called "scenario" refers to digital modularized personal economic choice activities.

Take commodity trading as an example. In the past, the selection activities were made at the counter, and the payment also occurred on the counter. Either the money was cleared at the commodity counter, or the payment was made at the cashier counter, and the goods were received at the commodity counter. For example, the export counter of the supermarket completes the clearing of money and goods. The e-commerce platform displays products on the Internet for buyers to choose. After the buyer makes a choice, he makes a decision-"place an order", and then realize "payment" through the Internet, and then "receive" offline. Here, the "payment scenario" is an online order, which requires online payment. E-commerce transactions in the United States and Europe still choose online payment by banking institutions, while China has innovated a digital payment platform. In other words, online payment is not necessarily satisfied by digital payment or digital currency.

Quotes | Of the top 100 digital currencies by market value, 36 rose and 64 fell: According to non-small data, 36 of the top 100 digital currencies by market value rose and 64 fell, of which BTC fell 0.38% in 24h, and is now at $3902.07. The 24h turnover was US$3.207 billion. ETH has fallen by 1.09% in the past 24 hours, and is now at $135.17, with a 24-hour turnover of $1.565 billion. ; EOS fell by 0.4% in the past 24 hours, and is now reported at $3.68, with a 24-hour turnover of $825 million. [2019/3/11]

Looking back, Facebook’s business plan to launch digital currency or digital payment has experienced several ups and downs. Although there are many reasons, the digital currency or digital payment system was created first, and the “scenario” (digital payment or digital currency) will inevitably follow. The occurrence and dance are for the innovation of "waiting for the rabbit"; even thinking that social networking itself is the birth of the digital currency scene is also an unfounded assumption.

If you think that Facebook can follow in the footsteps of WeChat's digital payment model as a social platform, you are also choosing the wrong target. Because WeChat payment was not developed before but after Alipay, and the payment of e-commerce platforms—rather than social platforms—in fact determines the basic scenario of digital payment.

Site| Founder of Bit Salon: Financial service ecological enterprises built around digital currency will flourish: Jinse Finance live report, at the WMIC2018 World Mobile Internet Conference on August 16, Li Zhijun, chief technical advisor of Trading Cloud Factory and founder of Bit Salon There are two prospects for blockchain financial services: the first is that blockchain technology will be applied to bank settlement, credit investigation, taxation, asset registration, etc. within two years; the second is blockchain encrypted digital currency It will become a mainstream investment product within two years, and financial service ecological enterprises built around digital currency will flourish. [2018/8/16]

In the United States, taking Amazon as an example, it still relies on the online payment of the banking system to a considerable extent. After the online order is completed, the bank’s online payment is generally the only choice, and no Chinese-style private digital payment platform has been developed. system.

In Europe, the development of e-commerce lags far behind that of the United States. Financial regulatory authorities have clearly declared that Europe does not have private digital payment systems such as Alipay and WeChat Pay, and cannot develop such systems by itself. The reason is that the payment systems of banks such as the United States and Europe are too strong, which prevents the occurrence and development of private digital payment platforms.

Morning digital currency market review: According to data from the huobipro trading platform,

The latest transaction price of BTC is 41130.29 yuan, the highest price is 42915.42 yuan, the lowest price is 41456.52 yuan, the turnover is 10,100 yuan, a decrease of 2.29%;

The latest transaction price of ETH is 3119.13 yuan, the highest price is 3247.26 yuan, the lowest price is 3155.49 yuan, the transaction volume is 22,700 yuan, a decrease of 1.75%;

The latest transaction price of BCH is 5392.25 yuan, the highest price is 5602.84 yuan, the lowest price is 5457.05 yuan, the transaction volume is 3100 yuan, a decrease of 1.58%. [2018/6/16]

Bank currency and digital currency have their own different "scenarios"

The main service objects of the payment system established by commercial banks are enterprises, especially after the advent of the industrial revolution era, industrial financing must be completed through the banking system. The emergence of the central bank is to meet the needs of unlimited money creation under the conditions of the industrial revolution, and to meet the debt financing of government departments. The so-called bank payment scene is a physical scene, with its windows, counters, outlets and network, and its process is physical, with a large number of complicated standardized procedures, forms, contracts, and laws and regulations to ensure its standardized operation. . The costs of the banking payment system are enormous, and the profits of the corporate sector — and the rest of the financial sector on board — are large enough to support the banking system. Bank payment needs to enter the business process of the enterprise department, etc., and grasp the commercial basis of enterprise payment. The bank payment system is too large and heavy, and there are a lot of breakpoints and blind spots in time and space. It is difficult to benefit all aspects of personal payment. In other words, there is a huge gap between individuals and enterprises in enjoying bank payment and other services.

24-hour digital currency market analysis: According to data from the Bitfinex trading platform,

The latest transaction price of BTC is 52879.6 yuan, the highest price is 54952.12 yuan, the lowest price is 51967.53 yuan, the transaction volume is 18,200 yuan, an increase of 0.73%;

The latest transaction price of ETH is 4228.14 yuan, the highest price is 4390.35 yuan, the lowest price is 4035.58 yuan, the transaction volume is 120,700 yuan, an increase of 1.5%;

The latest transaction price of BCH is 8898.14 yuan, the highest price is 9532.82 yuan, the lowest price is 8002.5 yuan, and the transaction volume is 40,400 yuan, an increase of 1.5%. [2018/5/13]

Before the digitalization of the economy, the bank account system was the largest and covered the most extensively. However, it is no longer possible to cover all employees, or even the banking institutions themselves reject full coverage. The banking institution system and its account system have physical limits, and there are financial costs. Marginal constraints.

Therefore, the bank account system is unwilling and unable to achieve "full-time, global" account coverage, and it is also unable to achieve "real-time" and "full amount" payment arrangements in a general sense. More importantly, the bank account system is only a capital account system. Simply put, if there is no need to handle accounts, there will be no bank account activities.

That is, there is a relationship between bank account activity and economic decision-making activity, but economic decision-making activity does not depend on bank accounts. The existing account system is all over-the-counter accounts, that is to say, the account subject has to make decisions on the counter surface, and cannot be remotely located across places; All-weather"; counter accounts also have account opening thresholds, and access is subject to certain restrictions. Even if an account is opened, if it fails to meet the assessment standards, it will still be restricted or eliminated as a "sleeping account" or "low-quality customers" ...

The service targets of the digital payment system are mainly individuals. In fact, it is the customer group that the banking system cannot provide full-staff, full-time, and real-time services. This part is done based on the digital infrastructure of the network, which is run by software programs, so-called "algorithms". As a result, the services that the bank payment system can provide to individuals can be achieved by digital payment, and it can be fully exceeded, that is, full-time, real-time, and full payment. This overall excess can only be achieved through digital technology. Can be achieved.

Misinterpretation of the "scene" of digital currency

Scenario is not a theoretical concept, nor is the problem of scenarios theoretical. The existing monetary theory is about bank currency, which cannot answer the scenario of digital currency. Just as the supply and demand relationship of banknotes cannot be deduced from the circulation of coins, the demand for digital currency cannot be deduced from the law of supply and demand of bank currency.

Scenario questions are not equivalent to "money demand" questions. First of all, it is different from the demand for bank currency. Digital legal currency is a "replacement" of M0, and should not be directly regarded as a part of M0, because it is not in the sequence of existing currency levels. For example, during the Spring Festival, how much "currency demand" does the digital payment of red envelopes for New Year's greetings directly generate? Maybe we can only give a relatively reasonable inference after the digital renminbi is fully launched and put into operation. Secondly, after digital decision-making occurs, payment arrangements can be made through digital currency or bank payment. Of course, more effective arrangements will be more and more inclined to digital currency; at the same time, non-digital decision-making, that is, existing offline economic decisions, will still tend to choose digital currency for corresponding payment and settlement arrangements.

The scene is not something that can be obtained through marketing or burning money, let alone one that can be built through traffic import. "Flow" is a derivative of "scene". In practice, you can't do the opposite and use traffic to create scenes. Although a certain type of scenario may lead to other types of scenarios, and there is a certain probable connection between the scenarios, it is not inevitable.

Fundamentally speaking, the scenario of the digital economy and digital currency is related to personal choice, which is real, not what it should be. Under the conditions of the digital economy, the richness, complexity, probability, and even change or instability of individual choices greatly exceed the rationality or experience in existing economic theories or business models. In practice, it is full of trials and errors. Challenges require a lot of algorithm practice to approach more accurate characterization and simulation.

In fact, the scenario problem is the core problem of the digital economy and its currency system. There is no wrong personal choice, only imperfect "algorithms". Only through continuous improvement and effective calculation can we ensure that the scenarios of the digital economy and its currency system continue to occur and expand.

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