I admit I know 0 about it, or Crypto Currency- I have no idea, at all, of where it gets its value- and what is it valued by is a question I have as well.
Dijjywan—Dijjydo or Dijjydon’t?
Questions for My Betters
China is now vigorously testing a digital yuan and threatens to have it ready for prime time for the 2022 Winter Olympics. This seems, to me anyway, important. It will be a real, workaday yuan, not a speculative cryptocurrency like Bitcoin. It will use a digital wallet via a cellphone app, and will not require an internet connection. Beyond this, I know about it only what I read, which may be wrong. To avoid endless qualification, I will write the following as if it were fact, but really I mean it more as an extended question. Any correction, amplification, or thought will be welcome.
There is nothing inherently speculative about Bitcoin, or any other digital currency.
People speculate on the US Dollar, and the Euro, and Yuan, and the Peso, and pretty much all currencies, all the time. There are currency markets, where all they do, as the name suggests, is trade in currency.
Forex trading is exchanging one currency for another to profit from the trade. Learn more about trading foreign currencies.
www.investopedia.com
You can read about it there.
So there is nothing more, or less, speculative about digital currency, than any other.
Now there is a difference, in that currencies like BitCoin, are NOT backed by a government.
That may seem a negative, but it is also a positive.
It's true that BitCoin has no backing by any government... but then that implies that government actually backs the currency. We know that isn't true. Governments devalue their currency all the time. They over spend (like we are), can't pay back their debts (like we can't), and eventually default or devalue their currency (like we will eventually do, almost guaranteed).
The cool thing about BitCoin is that, the entire system that BitCoin runs on, is entirely independent of anything. No one can manipulate it, because they would have to change the BitCoin system on every single computer that is running BitCoin, on the entire planet.
There is no way for any government to manipulate the currency. It's impossible.
Now at the same time the government can refuse to accept BitCoin as a currency, and many don't, but as long as you can trade BitCoins for other currencies, there is no way for governments to stop people from using BitCoin.
I have not research what exactly China is trying to do, but I don't think it will be all that successful.
The whole point of a digital currency, is to avoid having the government be able to devalue or manipulate the currency. Without that factor, there is no value in using BitCoin. Why not just use paypal to access money online?
There is no value in using BitCoin over any other currency, except that it is beyond the interference of government.
China trying to create a digital Yaun, will undoubtedly be tied, and controlled to the government Yuan, which means they would be able to manipulate it.... so.... why use it?
Eventually I'll get around to reading up on what they are doing, but it reminds me a little bit of Red Star OS.
If you don't know what that is, it's an Operating System like Windows, Mac OS, and Linux. Specifically it was a Linux like OS, designed by Communist North Korea. It had tons of back doors, and such, that the government could access computers with. But most importantly, it had encrypted data tracking. Meaning every file, word document, picture, video, music, had an encrypted tracking on it, that allowed the government to trace every single computer that the file was on. So if you wrote a message saying you don't like Kimmy in government, they could track every computer that file was on, and round ever dissident up.
As result.... no one uses Red Star OS. I would wager this is what China is trying to do with digital currency, to try and control it. And I doubt it will work.
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