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New Facilities - Algorithmic Ledger Reconstruction of Financial Foundation
Whether you look at it from an asset perspective, a currency perspective, or an infrastructure perspective, they are all changing. So where is the change? Three things, assets, currency, and infrastructure have all changed.
What is the constant investment logic in a changing situation? First, use good assets as the investment target; second, use good currency as the medium of exchange; third, use good ledgers as the infrastructure.
Bitcoin itself is an open source program, a game, and a game in a broad sense. Through the construction of the system, it achieves its goals: one is to provide a trusted ledger, and the other is to provide a stable currency.
So, what is the most valuable legacy that the Bitcoin system has brought us? It demonstrates to us the algorithmic ledger, a new type of ledger. Hu Jie explained in detail the three characteristics of the new ledger.
Consensus accounting is the first feature. It refers to the change from one person to multiple people compared to the traditional bookkeeping method in the past. Now all our books are essentially kept by one person. For example, the books in the bank are actually recorded by a legal person. A personal record means that the number in it can be changed. For example, if you have 1 million in China Merchants Bank, if you see 1 million and 6 zeros today, it will become 5 zeros tomorrow. If the bookkeeper doesn't recognize it, there is almost nothing you can do. This is the traditional bookkeeping method, which we call a goodwill account book. Its authenticity and reliability depend on the integrity and ability of the bookkeeper.
The second feature is equity tokens. Hu Jie made a simple metaphor, saying that the token is a piece of white paper that can carry any rights and interests in the virtual world. It is naturally digital, can be encrypted, and can be protocolized.
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New Money: Digital Currency How Much Chaos Has Been Created in Your Name?
Hu Jie said that there are some chaos now. For example, anything that runs on this new type of algorithmic ledger is called digital currency. This is the result of confusion caused by the infinite expansion of concepts.
To get to the bottom of the matter, Hu Jie answered three questions in the course. What is currency? What is the carrier of currency? Who deserves to be called digital currency?
What is the carrier of currency? There are various carriers, such as metal, paper, and plastic. More than half a century ago, banks all over the world basically used paper ledgers. Nowadays, electronic ledgers are used, including ordinary database ledgers and distributed ledgers supported by blockchain technology. It is worth mentioning that the former is a goodwill type, and the latter is an algorithmic type.
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New Assets: How to identify an opportunity or a trap for equity tokens?
How to understand the so-called new assets? Assets are easy to exchange after tokenization, which is its benefit. For example, it is more troublesome to sell the company's equity on white paper to others, but if you set up an exchange and trade stocks there, the efficiency will be greatly improved. An analogy is that if we no longer write equity on paper, or even in a traditional database, but directly express it as a token on the ledger, for example, we issue some kind of token on a ledger like Ethereum. The certificate represents the equity of the company, so the pass can be traded very conveniently. Why? Because the tokens on the algorithmic ledger supported by the blockchain have very good circulation and tradability, and their reliability is also natural. This can greatly improve the tradability of assets. Equity, debt, real estate, etc., any tradable equity can be certified.
In short, asset tokenization facilitates exchange and can improve the efficiency of equity exchange. Production and exchange are the basic activities of the economy, and all economic exchanges are exchanges of rights and interests, so the exchange of rights and interests is very important. Most rights and interests, such as property, stocks, creditor's rights, points, etc., can be exchanged.
The token itself is not mysterious, it is a piece of paper, and the agreement on it represents the rights and interests, and the rights and interests are finally realized due to the guarantee of the law. When someone buys a token, they need to ask what kind of rights and interests to buy, and which ledger is the rights and interests recorded in? This has not changed from the previous investment logic. When investors examine new assets, the ledger is a new algorithmic ledger, but the value carried behind it and the legal rights conferred have not changed from the original ones. This is the same logic.
In the end, Professor Hu Jie concluded that we are indeed facing a changing situation. In such a game field of finance, we have discovered a set of new technologies and used new technologies to build a new ledger for the game field. This is the infrastructure of the game field The new changes are part of the changing situation. The second is the introduction of new currencies, such as Bitcoin produced by the people, digital currency issued by the central bank, and stablecoins that everyone is exploring. It should be noted that there are many confusing concepts in this field. I hope the previous discussions can help you clarify. Finally, there are new types of assets, or new expressions of existing assets. Finally, returning to the old-fashioned topic, it is the simple and unchanging investment logic: we must find good assets as the investment target, and we must use good currency as the trading medium in the transaction. Finally, the core component of the game field that carries the entire investment transaction—— The ledger must be a good ledger.
