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First, why cryptocurrencies are banned

Since October 24, 2019, after the Political Bureau of the Central Committee of the Communist Party of China conducted a collective study on the development status and trends of blockchain technology, the price of Bitcoin has skyrocketed by 30% from US$7,500, and many domestic projects have experienced a daily price increase of more than 50%. Exaggerated gains. When the "currency circle" was cheering for this grand event, in November 2019, many places successively introduced strict regulatory policies, adhering to the principle of "strike as soon as they show up" to continuously monitor virtual currency business activities, and deal with them immediately once they are discovered. Play small, prevent problems before they happen.

What is the reason for this?

The first thing to bear the brunt of course is to prevent the risk of "air currency". What are "air coins"? It is the so-called "digital currency" developed by applying blockchain technology without any credit endorsement and physical support at all, and it has no value. It does not have any application scenarios, and its essence is not a real digital currency. On the surface, the income is very high. In fact, the risk is extremely high, and the rise and fall of such currencies are completely controlled by the issuer.

Not only that, "air coins" and funds will have locked positions (generally refers to investors opening a new position opposite to the original position when the market has a trend opposite to their own operation after buying and selling contracts), direct push rewards , There are also multi-level rewards similar to pyramid schemes, so air coins also have another name called "pyramid scheme coins".

The risk of "air currency" is that the unscrupulous developers of such currency, before developing the virtual currency and pushing it to the market, organize themselves to take part of the total amount of virtual currency issued as their own, and this ratio is generally within 2%. , very few even reach 90%. Then through marketing methods and trading, use gimmicks such as "high profit" and "only up but not down" to lure speculators into the market. After the virtual currency has a certain value or is listed on the trading platform, a large number of selling is realized, so that the participants Miners and investors suffer huge losses, while unscrupulous developers will run away with money and have no way to defend their rights.

There are also so-called "cottage coins", which are domestically produced virtual currencies in China following the explosion of Bitcoin. They are collectively referred to as "cottage coins" in the industry. That is, by modifying or even directly applying the source code of Bitcoin, and renaming it, a new currency is born.

Compared with "air currency", this type of currency has certain application scenarios and innovative value, and it can indeed solve some pain points in real life, such as Ripple currency, which can solve the problems of low efficiency and high handling fees in cross-border payments . Take Ethereum for example. It can not only solve the existing problems of recording and storing various transaction data, but also is a diversified development platform that can provide various modules for users to build various innovative applications.

Despite this, there are still some "cottage coins" that have experienced large fluctuations in trading prices after they were launched on the market, attracting many speculators to participate in the transaction. It is not easy to invest in good currencies. Because of the huge risks brought about by such uncertain factors, while bringing huge profits to investors, it will also bring considerable financial losses.

In addition, it is a virtual currency with a credit endorsement of a good company or organization. It can not only be traded on exchanges, but also can be exchanged for legal currencies of various countries to circulate in the market. This is "money laundering", illegal fund transfers and other illegal acts A breeding ground is provided.

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Then, why value blockchain?

What is Poverty Alleviation? Luo Yonghao said in his New Year's Eve speech that in the past, we always thought that it was to send rice, flour, oil money to the countryside so that they could have food and drink. Connect to a thriving network.

In the same way, let’s think about supply chain finance, which connects upstream and downstream enterprises and financial institutions through the blockchain network, such as banks, credit companies, suppliers, core enterprises, distributors, logistics enterprises, warehouse supervision companies, etc. . Through information integration on the chain and computerized intelligent processing, it can not only effectively reduce the human error rate, increase the optimal supply of products, help enterprises avoid risks, but also provide financial support for small enterprises through supply chain finance, and give large enterprises better Product output and brand establishment.

Inclusive finance connects financial institutions with many people who do not have bank accounts and cannot enjoy financial services through the blockchain network, and then through the constraints of smart contracts, everyone can enjoy loan services and more financial services , not only helping financial institutions to develop new customer groups, but also providing opportunities and opportunities to people who really need financial services.

Medical blockchain, which connects medical institutions, drug suppliers, and patients who need medical treatment through a blockchain network. The transparent diagnosis and treatment process information and complete drug supply information on the blockchain system help patients seek medical treatment more quickly Safe, the patient's medical records can be selectively shared across the entire medical system through the blockchain encryption mechanism, which not only helps doctors understand the condition of patients transferred across hospitals, but also facilitates the development and progress of medical technology.

Charity blockchain, which directly connects the donor and the donated person through the blockchain network, realizes the direct transfer of donations to the donated person, and saves the opaque donation transfer process in the middle, that is, guarantees the charity Being able to earmark funds to really help those in need can effectively avoid corruption and at the same time rebuild people's trust and confidence in charity.

Government blockchain, which directly connects government agencies, the general public, and enterprises through a blockchain network, is an open, transparent, decentralized and non-tamperable blockchain network that helps people inquire about social public affairs, The progress and whereabouts of the payment account project, the fairness and justice of the supervision of the election, and the help of the government system to reduce the risk of being attacked, making the verification of citizenship and rights more convenient and efficient, and can also help the government to collect corporate taxes and fees more worry-free and convenient.

Not only that, the application prospects and application fields of the blockchain system in various industries such as energy, insurance, logistics, industrial manufacturing, agriculture, digital entertainment, copyright, transportation, big data, and artificial intelligence are very large and extensive. The improvement and resolution of the original problems, contradictions and drawbacks of the industry will also be comprehensive and earth-shaking. The influence of this on personal life, enterprise development, industry progress, national prosperity and even the influence of the world will be very large.

So, why does our country attach so much importance to blockchain? Do you understand it?

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