, Author: Hexadecimal, reproduced by Odaily with authorization.

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1. The Mapping of Power and Mathematics

2. I don't know if it's tit for tat or fate.

On April 16, 2020, two major events occurred in the field of mathematical currency.

China's central bank's digital renminbi is about to be implemented. Suzhou is a pilot city, and part of the salary will be paid in the form of digital currency. Relevant personnel will complete the installation of the central bank's digital currency (DC/EP) digital wallet. If all goes well, this will be the world's first digital currency anchored by a sovereign national currency.
In the updated white paper of the Libra digital currency project led by the world's social giant Facebook, the most important change is to provide a stable currency anchored to a single legal currency. There is a high probability that Libra will become the pioneer of the digital dollar to expand its territory. Once Libra is officially launched, it will be a financial nightmare for countries other than the US dollar!

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What is Central Bank Digital Currency

The central bank's digital currency (DC/EP) refers to the digital currency issued by the central bank, which belongs to the central bank's liabilities, has national credit, and is equivalent to legal tender.

Its functional attributes are exactly the same as banknotes, but in digital form. It has the following characteristics:

1. What is Central Bank Digital Currency

2. The central bank's digital currency (DC/EP) refers to the digital currency issued by the central bank, which belongs to the central bank's liabilities, has national credit, and is equivalent to legal tender.

3. Its functional attributes are exactly the same as banknotes, but in digital form. It has the following characteristics:

Two-tier operation: the first layer is the PBOC to commercial banks, and the second layer is commercial banks to connect with ordinary people. The commercial bank pays 100% reserve to the PBOC, and then the PBOC gives the commercial bank an equivalent amount of DC/EP, and then the user exchanges DC/EP with the commercial bank through cash or deposits.

Judging from the screenshots of the Agricultural Bank of China’s digital currency wallet leaked from the Internet, the main functions displayed are basically similar to the daily payment and management functions of the bank’s electronic account. ", "Touch" four commonly used functions.

Unless you are willing to close your country, if the United States just cuts off the SWIFT network, you will become a financial island.

The Chinese version of the central bank's digital currency is no longer just a phantom in the air, and has begun to test "landing applications."

The "settlement network" behind the "digital currency"

Digital currency is just an appearance, and reconstructing the payment network is the "big picture."

Behind the hegemony of the U.S. dollar lies a ubiquitous currency settlement network - SWIFT, which is the technical support for the U.S. dollar to become the U.S. dollar.

In 1973, 239 banks from 15 countries in the United States, Canada and Europe formally established SWIFT to establish a computer network system for bank settlements around the world.

Although the headquarters is located in Brussels, there are two crucial information exchange center nodes, one is located in Amsterdam, the Netherlands, and the other is located in New York, the United States.

The current SWIFT system connects more than 10,000 financial institutions, covering more than 200 countries and regions around the world.

This is one of the core reasons why the United States has the power to "long-arm control".

No matter where you are, your money is in the hands of the United States.

Unless you are willing to close your country, if the United States just cuts off the SWIFT network, you will become a financial island.

In 2014, in order to oppose Crimea’s accession to Russia, the United States imposed sanctions on three Russian banks. The VISA and MasterCard payment systems had to stop providing payment services to the three banks including “Russian Bank”. It’s not that these payment institutions don’t want to make money, it’s just that They cannot afford to offend the US-controlled SWIFT system. Even if Russia wants to build its own payment network, even if the technical problems are solved, there will not be so many countries participating.

In 2019, it was rumored that the United States included Huawei in the "Specially Designated Nationals List (SDN)". Once on the list, the United States may use its control over SWIFT to require more banks to block Huawei's financial transactions. deadly.

Reconstructing a payment system is much more important than building a digital currency.

In 2014, in order to oppose Crimea’s accession to Russia, the United States imposed sanctions on three Russian banks. The VISA and MasterCard payment systems had to stop providing payment services to the three banks including “Russian Bank”. It’s not that these payment institutions don’t want to make money, it’s just that They cannot afford to offend the US-controlled SWIFT system. Even if Russia wants to build its own payment network, even if the technical problems are solved, there will not be so many countries participating.

Because its bottom layer is a mathematical protocol, mathematics does not lie.

Why is now a good time to build a new financial system?

In the financial and monetary system, the most difficult thing to establish is the trust mechanism.

The intervention of blockchain solves this problem.
Because its bottom layer is a mathematical protocol, mathematics does not lie.

Whether it is the SHA-256 of Bitcoin, or the ERC20 protocol of Ethereum, or the data design of DC/EP, the common feature is the consensus mechanism dominated by the encryption algorithm. The algorithm is the cornerstone of the operation of the public chain and the guarantee of building credibility. .

Therefore, the new financial system can easily run automatically on this "mathematical machine" that creates trust.
Compared with the traditional financial system, it has the following features:

1. Whether it is the SHA-256 of Bitcoin, or the ERC20 protocol of Ethereum, or the data design of DC/EP, the common feature is the consensus mechanism dominated by the encryption algorithm. The algorithm is the cornerstone of the operation of the public chain and the guarantee of building credibility. .

2. Therefore, the new financial system can easily run automatically on this "mathematical machine" that creates trust.

3. Compared with the traditional financial system, it has the following features:

4. Disintermediation to reduce data friction;

5. Low cost, no need for manual liquidation;

Compared with traditional finance, if TPS can be rapidly advanced, then the new financial system is much more perfect.

If the open source system of DC/EP is done well enough this time, other countries can issue and transfer their own currency safely and quickly on this public chain, then it will be easy to build a new financial system.

With just one announcement, it is possible to reap 10 years of hard work in the cryptocurrency world.

DC/EP has a more flexible open module, which should be China's biggest calculation on digital currency.

The "digital calculation" of the traditional dollar

So how does the United States plan on digital currency?

Regarding digital currency, it has always been a heart disease in the United States.

On this issue, the Fed has been at a loss for nearly a decade.

On the one hand, the United States is known as the center of innovation, the land of freedom, and should have encouraged and supported the new blockchain technology;

On the other hand, because of the vested interests brought about by the hegemony of the US dollar, the Federal Reserve regards digital currencies as enemies.

It is understandable that no one wants to take his own life.

Therefore, starting from 2009, we can see various abnormal behaviors in the United States.

The 2012 raid on the darknet "Silk Road"...

2014 started a pretentious dialogue with digital currency companies...

This situation continued until 2018 before the United States found out how to deal with digital currencies.

In September 2018, the U.S. government approved two stablecoins, Gemini Dollar and Paxos Standard, with 1 token exchangeable for 1 USD. Completely different from Bitcoin, stablecoins use the traditional U.S. dollar as their currency system, and the issuance of this currency is held in the hands of the Federal Reserve.

This strategy of using "stable currency" as the blade is accurate and ruthless-no action is required, just establish rules, and countless excellent commercial companies will endorse the digital dollar.

The U.S. government does not issue a single currency, but it has already captured the 1.67 trillion market.

It's the perfect marriage of power and mathematics, a digital extension of the dollar's hegemony.

The U.S. government did not spend a single soldier, did not break the rules of the market, but simply pushed the boat along, and commercial companies will use their brand value to create digital dollars for the United States.

With just one announcement, it is possible to reap 10 years of hard work in the cryptocurrency world.

These leading commercial companies bring the dollar behind them to every corner of the world through the operation of stablecoins.

Bottom-up mechanism, light ruling.

It won't be long before an era of "digital dollars" (mathematical dollars) takes shape.

In fact, Libra has another name called GlobalCoin, which translates to "global currency".

Leverage strength, follow the trend, and harvest globally. This is the "digital calculation" of the traditional dollar.

Facebook Disturbed America's "Digital Currency Dream"

Everything was going smoothly, and the U.S. dollar moved forward calmly on the journey of digital currency.

Unexpectedly, Zuckerberg, a young bison, suddenly rushed into the digital currency kingdom.

In June 2019, Libra Network (Libra Network), a subsidiary of Facebook, united 26 companies around the world to release a white paper on the cryptocurrency project. The first sentence of the white paper is: Libra's mission is to build a simple, borderless currency and provide Financial infrastructure serving billions of people. Libra wants to build a "borderless currency".

Facebook's ambitious ambition to build a "world currency" has really spooked Wall Street.

In fact, Libra has another name called GlobalCoin, which translates to "global currency".

Facebook's action means that 2.7 billion users will be connected to the cryptocurrency payment system; of course, it also means that 3/4 of the Internet population may get rid of the control of the US dollar.

Hayek's "Denationalization of Money" will be verified for the first time; technology giants are moving from Silicon Valley to Wall Street.

The specific rules of Libra are as follows:

1. Facebook's action means that 2.7 billion users will be connected to the cryptocurrency payment system; of course, it also means that 3/4 of the Internet population may get rid of the control of the US dollar.

2. Hayek's "Denationalization of Money" will be verified for the first time; technology giants are moving from Silicon Valley to Wall Street.

3. The specific rules of Libra are as follows:

4. Establish a stable blockchain ecosystem;

The establishment of the new world will not be easy, and the Federal Reserve and Wall Street will not be reconciled.

In less than a year, the Federal Reserve's dream of digital currency was blocked by its own people.

The Fed's Strike Back

Zuckerberg is an eagle flying on the Internet, he has his own dream.

With the blood of globalization flowing in his bones, Facebook is not willing to be a pawn of American finance.

This Jewish favorite, who is often called to the US Congress for questioning because of user privacy data, wants to set another chess game outside of the "dollar hegemony".

He probably thought: Why should I be bound by these traditional old guys in the old-fashioned SWIFT world?

The establishment of the new world will not be easy, and the Federal Reserve and Wall Street will not be reconciled.

After nearly 500 years of long evolution of modern legal currency, the U.S. dollar finally defeated gold to become the world's common currency and the most effective weapon to harvest the world. I don't know how many visible and invisible interests are tied to it. ?

For such a spoiler, they will definitely fight back and defend the status of the dollar.

"U.S. dollar hegemony" may have the following means to counter Libra:

1. After nearly 500 years of long evolution of modern legal currency, the U.S. dollar finally defeated gold to become the world's common currency and the most effective weapon to harvest the world. I don't know how many visible and invisible interests are tied to it. ?

2. For such a spoiler, they will definitely fight back and defend the status of the dollar.

3. "U.S. dollar hegemony" may have the following means to counter Libra:

4. Use legal means to suppress stablecoins outside the "dollar system".

5. Cultivate competitors to check and balance Libra.

From 2019 to 2020, only the first trick is actually used in the traditional financial world.

In the past year, Libra has been repeatedly questioned and tortured by the US Congress, the Federal Reserve, the European Union and other governments. It can be described as scarred and devastated.

After a year of tossing, the bull that rushed into the digital currency world was dying in the quagmire.

Not to mention Zuckerberg, the onlookers beside us feel distressed.

Silicon Valley's alliance with Wall Street

After a year of tossing, the bull that rushed into the digital currency world was dying in the quagmire.

It gave up the public chain and the great ideal of White Paper 1.0.

On the evening of April 16, 2020, the Libra project updated the white paper.

In version 2.0 of the white paper, four key changes have been made:

1. It gave up the public chain and the great ideal of White Paper 1.0.

2. On the evening of April 16, 2020, the Libra project updated the white paper.

3. In version 2.0 of the white paper, four key changes have been made:

4. Although it is very euphemistic, in essence, Libra’s strategic retreat and alliance with the US dollar have become an important member of the digital dollar, expanding its digital territory under the protection of US national power, but at this time Libra is no longer global The digital currency is just a digital dollar corresponding to the power dollar.

Although it is very euphemistic, in essence, Libra’s strategic retreat and alliance with the US dollar have become an important member of the digital dollar, expanding its digital territory under the protection of US national power, but at this time Libra is no longer global The digital currency is just a digital dollar corresponding to the power dollar.

It is sad to see the former idealist finally reduced to a thug of the digitization of the dollar.

Silicon Valley's technology giants have finally come together with Wall Street.

Once the alliance between Libra and the digital dollar is formed, a new pattern is taking shape.

Gold is the underlying asset reserve, the US national strength or "power" is the intermediate connector, and the dollar is the external form of expression.

Once the two form an alliance, other countries should be even more vigilant.

The "logic of power" of the digital dollar

After taming the Zuckerberg bison, the Fed will consider the new world of finance.

How should the power logic of the digital dollar be established? This is the mode they are familiar with.

Let's sort out the relationship of "gold·mathematics·power·currency" from the history.

After the establishment of the Bretton Woods monetary system in 1944, the monetary system of the entire world is:

Gold is the underlying asset reserve, the US national strength or "power" is the intermediate connector, and the dollar is the external form of expression.

This looks like a very stable monetary system.

After the collapse of the Bretton Woods system in 1972, the whole world thought that the US dollar would be over, but what they did not expect was that the final currency system was:

That is to say, in the end, the U.S. dollar directly anchors "power", that is, the national strength of the United States, and is no longer linked to gold. This currency system has been in operation until now.

The arrival of this day is the advent of the era of "digital dollar" unification.

The legal currency US dollar is equivalent to the gold of the Bretton Woods system. The national strength of the United States, that is, "power" is the intermediate connector, and the "digital dollar" is the external form of expression.

Further development is:

In other words, once the belief in stablecoins is established, not many people may care about the "reserve of legal currency dollars" behind the stablecoins, and the market will start to use "digital dollars" directly.

The arrival of this day is the advent of the era of "digital dollar" unification.

The "legal currency dollar" has worked hard for hundreds of years to achieve its current status.

However, as long as the "digital dollar" has a proper strategy, it can wipe out the whole world overnight.

The future "digital dollar" will be competed by thousands of companies, such as Facebook, which corresponds to the best assets in the world and is more convincing than the national strength of the United States. At that time, instead of saying that the "digital dollar" is an asset issued based on the "fiat currency dollar", it is better to say that the "fiat currency dollar" is a parasite of the "digital dollar".

In the field of digital currency, power is not the only thing to rely on.

This is the "power logic" of the digital dollar.

Mathematical Competition in the Field of Money

In the field of digital currency, power is not the only thing to rely on.

Its bottom layer belongs to mathematics, and mathematics is the cornerstone of trust.

The digitization of currency, technology and strength are indispensable.

On April 16, 2020, a new triangle of power • mathematics • money is being established.

On this day, the U.S. dollar is no longer the original U.S. dollar, and the renminbi is not the original renminbi.

Everything seems to be accidental, and it is not sudden.

The fiat currency world dominated by the US dollar continues to experience financial crises, and there should be more benign competitors.

The initiative to upgrade the renminbi this time demonstrates the technological foresight of China's financial sector.

Everything seems to be accidental, and it is not sudden.