[Original address of this article: my personal website ]

Digital currency, or more completely "encrypted digital currency on the blockchain", has entered the public's field of vision since 2014, and has gradually become stronger in the past few years, becoming a topic that all kinds of people are keen to talk about" High-tech fintech darling".

There are countless laurels worn on its head. Some people call it a symbol of monetary freedom in the Internet age, some people think it is a weapon against traditional financial elites, and some people think it is a new era of wealth-making machines. , and some people even think that it is an upstart of the times that subverts the principles of traditional economics.

So, let's briefly analyze whether digital currency is a currency? Or, what exactly is it?

What is currency?

What exactly are we talking about when we talk about money?

Is it a metal coin? A piece of red and green banknotes? Or a line of numbers in Alipay and WeChat?

No, when we talk about money, we are talking about an idea that is a mixture of several different concepts and needs, and its vehicle in the real world.

Traditionally, any currency has the following three functions[Note 1]:

1. store of value
2. value scale
3. medium of exchange

That is, people can store value in currency for future use when needed, commodities can be measured in currency, and, finally, value can be circulated in currency between different people or organizations.

Other uses, such as payment, etc., have evolved from the above three basic functions.

Obviously, not everything can do these three tasks just right, otherwise everything in the world can be used as currency, which is obviously in conflict with our daily life.

So the next question to ask is: what can be used as money?

In other words, what properties must a good enough currency have?

To be able to complete the three basic functions of the currency mentioned above, the actual carrier of the currency must have some sufficiently excellent properties, such as:

1. generally accepted
2. Not easy to forge
3. Divisible and consistent quality
4. Easy to store and transport

For example, the currencies that appeared in history, such as clay tablets (the earliest currency used for bookkeeping), shells, metal currency, paper money, etc., basically had the above properties in their most common periods, until social changes made certain properties impossible. After being satisfied, it is replaced by a new form of currency.

For example, clay tablet documents are not easy to transport, which is naturally not a problem in the era of gift economy, but with the increase of long-distance commodity economy, it is naturally no longer applicable.

The reason why shell coins with shells as the main body will withdraw from the historical stage is mainly because shells that are not suitable for division and meet the conditions are difficult to find, so with the vigorous development of the commodity economy, it cannot become a suitable value carrier.

Metal currency has been gradually eliminated in the last few hundred years due to natural wear and tear and difficult transportation. The earliest paper currency in human history was the flying money in the period of Tang Xianzong, but the scale was not large. The earliest large-scale paper currency was 200 years later. Jiaozi during the Song Taizu period, but was later destroyed by inflation and credit bankruptcy brought about by serious spam.

Personally, we can extract the two core essences of money from this: credit and contract , rather than the "general equivalent" discussed in "Das Kapital" [Note 2].

At present, mainstream numismatics believe that money is a contract between the owner of a property and the market regarding the right to exchange, and it is an agreement between the owners .

In my opinion, this conclusion can be generalized slightly:

Money is a contract for the exchange of assets based on properly required credit, established in a market of holders and issuers.

And the foundation on which the contract is built is credit.

What is credit?

In the "New Pagrave Dictionary of Economics" , the definition of credit is: "To provide credit (Credit) means to give up the property right to something (such as a sum of money) in exchange for a certain future in the future. Ownership of another item (such as another portion of money) at all times. ”

The Oxford Law Dictionary explains it as: " Credit is the practice of not immediately but a promise to pay remuneration in the future after goods or services have been obtained or rendered. "

"Money and Banking" explains it this way: " Credit is a lending behavior that temporarily transfers the right to use capital on the condition of repayment of principal and interest. "

In other words, it is precisely because the issuer of the currency has its own credit that the user can believe that the services or resources I currently provide can get the same return in the future, so that they can accept the currency with peace of mind as the future to get the same return. contract.

We can see the credit origin of the special contract of money by applying the statement of the contractual origin of justice and morality in The Social Contract Theory: that is, precisely because money has credit, this credit guarantees reciprocity and guarantees People's will is free, so the contract based on this credit is reasonable, moral and just.

That is, there is a specific contract between all users of the currency and the issuer of the currency: the user provides services or resources to the outside world, and then gets a promise from the issuer, promising that his current payment in the future can get the same amount. In return, this commitment is expressed in the form of a specific contract, which is money. The prerequisite for this contract to be established is that the user believes in the credit of the issuer. If the issuer has no credit, then this contract will not be obeyed.

Therefore, from a personal point of view, the core of money is credit, and the essence of money is contract .

To use the popular words, it is " according to faith ".

In fact, scarcity, unforgeability and other properties are the basic requirements for credit to be accepted by people to form consensus credit, and the fundamental is to be able to form stable credit.

In order to achieve credit and reach consensus among the crowd, we will naturally require that this credit must have good properties that some people agree on, the most important one of which is stability .

That is, the credit on which the currency is based must be basically the same in time, space and among different users, without excessive fluctuations.

If the credit behind a currency appears to different people very differently, then obviously the currency can only be used by a smaller group of people, that is, those who have high credit for it, and those who think its credit is low. The use of this currency may be hindered in the population of One currency squeezes out another, but the question of whether the high squeezes the low or the low squeezes the high will eventually form a unified situation where everyone has the same credit situation.

The stability in space is also well understood. In addition to restricting the wide-area circulation of currency, there may also be transactions against the currency itself, instead of using the currency to conduct other commodity transactions, so the currency will be consumed in the capacity that cannot be carried. The field of value circulation in the normal commodity economy, thereby weakening its core function, and thus no longer a good currency.

Temporal stability is relatively hidden, but it also leads people to hoard currency for appreciation, or use it as soon as possible to avoid devaluation, which are not normal monetary behaviors.

Therefore, a good currency and the stability of the credit behind it actually require that the difference and fluctuation of the currency value in time, space and different user groups should not be too large , otherwise it cannot be regarded as a good currency.

This is actually very understandable. If money is regarded as a measure of value, then obviously no one wants the length of the ruler to be different at different times and places. Such a ruler will bring disaster to our business and social behavior. as a result of.

This actually means that if an item is sufficiently stable, it has the potential to be accepted by the crowd as currency. For example, we often hear that in some special places and special occasions, some people use cigarettes, Lego and even Laoganma as currency, just as in the early days of human civilization, people used shells and gold nuggets as currency. . This is because in these special cases, cigarettes, Lego and Laoganma have good stability, and this stability is based on the scarcity of the supply side, so it depends on the stability of the quantity, and people need it, and the third is not It will be faked, after all, there are no conditions for forgery in those special environments. All of this makes the value of these things stable, not only in space and time, but basically the same for everyone in this environment.

This kind of time, space and credit stability of the main user has actually made a lot of restrictions on what kind of carrier we can choose for value.

For example, why can't stones that can be seen everywhere be used as currency? Because the theoretical output of the stone is very large, the credit will be diluted rapidly, resulting in great instability in time. And why are gold and diamonds more suitable as currency than ordinary stones? That's because the output is small, so the credit is basically stable.

Of course, what we are considering here is only the properties that pure money should have. If it is placed in a more practical market, money needs to have some other more practical properties.

currency in the market

For an actual market, a stable currency is of course a must. But it is clear that an actual market must have more requirements for currency, that is, currency in the market must have more responsibilities inherent in it.

To this end, we need to look at the three elements of a most basic commodity market : the demand side, the supply side, and the currency.

From the point of view of a complex network, any commodity market is a directed connected graph composed of some nodes, each of which is a directed edge, flowing from the demand side to the supply side, and currency is circulating in it.

There are many reasons for determining whether there is a currency connection between the demand point and the supply point. Sometimes it is just that the two parties do not know the existence of the other party, and sometimes the actual transaction cannot be carried out due to many actual historical reasons or policy reasons.

In a conscientious society, a balance in a broad sense can generally be reached between supply points and demand points, that is, most supply points can find matching demand points, and most demand points can also find accompanying supply After that, you only need to carry out the usual purchase behavior, and then achieve the opposite circulation of currency and assets.

But we all know that society itself is a dynamic system, so is the above balance guaranteed to be achieved? The answer is obviously no.

With the development of social productivity, there is usually a situation where supply exceeds demand. At this time, leaders in the market will try to expand people's demand - for ordinary people, it is to make them unnecessary for basic living needs. Necessary goods or services are consumed, which is what we usually call entertainment economy, luxury economy, consumption upgrade, etc. It is generally manifested in two forms -

One is that high-unit-price commodities in the same ecological niche gradually squeeze low-unit-price commodities out of the ecological niche, and at the same time, low-unit-price commodities with high profit margins start to squeeze out low-profit margins, and finally form a kind of gradually replacing the original low-unit-price and low-unit price commodities. Trends in profit margin commodities, complemented by the "consumption upgrade" in the name.

The other is to create new ecological niches, such as providing new forms of entertainment or entertainment, or subdividing a commodity, so that you can buy one thing originally, but now you have to buy several. But there is something "significantly" different under the subdivision. This is the so-called "exquisite life" and "entertainment economy".

Obviously, idols, various men's and women's groups, star chasing, fan groups, all of these are not necessary for our lives, and they are not widespread in the past history, but after consumerism became popular, in order to expand demand to meet the excess. concepts created by supply, and they have inevitably become part of our daily life.

So, what does this have to do with currency?

The relationship lies in: the great development of productive forces has created a huge supply, and the capital economy has created a huge demand. These points need to be connected by currency. Therefore, if there is no currency of the same magnitude, then the above demand and supply will be connected. There will be no matchmaking, and the deal will not be realized.

For example, there was originally a milk merchant in the village, who could provide 10 cups of milk, and each cup of milk was worth 1 yuan. In the village, there was only one person who drank milk. He only drank one glass of milk a day, and his daily salary was 10 yuan. In this way, the milk trade in this village can be matched, and the matching result is that the supply exceeds the demand: 10 cups of milk are produced every day and only one cup is sold.

Later, this person came to a group of relatives. There are exactly 10 people in the family, and everyone drinks 1 cup of milk every day, so the situation is that 10 cups of milk are still produced every day, but now they need to consume exactly 10 cups of milk, and this person’s daily life The salary is just enough to pay for the 10 glasses of milk, so the two sides are successfully matched again.

Now, through high-tech means, the dairyman allows his cows to produce 12 cups of milk a day. At the same time, the milk-drinking family has two more relatives who also drink milk, so they need to consume exactly 12 cups of milk every day. Demand and supply are matched, but there is a problem: the person earns only 10 yuan a day and cannot afford 12 glasses of milk.

Therefore, the demand and supply are indeed matched, but the money supply is insufficient, so the transaction still cannot be saturated, but can only be in a poor state of unsaturated.

How to solve this problem?

One plan is to reduce the price of milk, 10 yuan can buy 12 cups of milk, so that the transaction can also be saturated. However, the production of milk needs to consider various reasons such as cost. The price cannot be reduced by saying that it can be reduced. Therefore, this plan is unreasonable, unless there is a way to reduce the prices of all commodities in the whole society at the same time.

Another plan is to increase the person's daily salary to 12 yuan, but what is the reason for this salary increase? It is impossible for the company to give him a salary increase for no reason, and the reason is just that the other party needs to drink more milk?

Or, the bank first lends this person a sum of money, and then agrees that after a certain period of time this person must repay the principal with interest - the reason for this may be that the other 11 people in the family can find jobs and make money in the future Pay off the debt, and if you don't give them milk now, they won't be able to get a job, and they won't be able to pay their debt. For the bank, this is a risky investment: after giving this person money, there is a certain probability that he will be able to repay the money, then giving him money can make Murakami's milk economy from unsaturated to saturated, This will improve the milk industry and allow 11 laborers to enter the labor market in the future; but there is also a certain probability that these 11 people will still not be able to find jobs in the future, so the money will be wasted. Of course, the bank can consider letting this person With his house as a mortgage, the risk can be reduced to a certain extent.

So, the question actually turns into two things:

1. If the money supply is too low, the normal transaction behaviors cannot be fully satisfied, thus damaging the normal development of the commodity economy. Therefore, if there is a shortage of money, it is necessary to try to make up for it;
2. If more money needs to be provided to saturate the transaction, who is getting the money and how? It is obviously not possible to hand out banknotes directly at Christmas.

Therefore, a normal commodity economic society requires that the three parties of demand, supply and currency match and satisfy each other.

Reflected in our real society, we can imagine what the world would be like if suddenly everyone, all companies, all banks, all institutions suddenly became one-tenth of the money now?

Obviously, if the price also becomes one-tenth of the current price at the same time, then nothing has changed, except that the term "yuan" is now replaced by the term "horn", which will not affect our normal life at all. ——This is the first plan in the milk village example, but it is obviously unrealistic.

Or, all companies and enterprises suddenly give everyone a salary increase, so that everyone's income can make up for 90% of the lost money in a short period of time, but are all companies and enterprises charities? And the money of the company is not printed out of thin air, it also needs a source. This is the second plan of Milk Village, and it is obviously not suitable.

Therefore, the third solution is for banks to provide loans to qualified demanders, so as to convert illiquid currency (bank deposits) into tradable currency and use it to facilitate the matching and completion of transactions.

Of course, it is also possible for the money supplier (such as the central bank) to print an additional batch of money, and then provide it to the appropriate demander in the form of investment and loans, thereby promoting more normal transactions in the market, activating the economy, and eventually flowing in Ordinary people's pockets, and then bring the whole economic market to life - this scheme is very complicated in practical application. It is necessary to consider which areas can get new money first and which can be naturally driven later. This whole set of precise The plan to increase the currency is the supply-side reform of the currency.

Naturally, we don't need to talk too much about the policy side. From the perspective of the market itself, a currency that meets the market needs, as mentioned above, must be able to match the transaction demands of the demand side and the supply and demand side. After all, it is impossible for commodity prices to adapt to the matching amount of supply and demand and the actual amount of currency in circulation, so It can only be reversed as much as possible to match the actual amount of currency in circulation with supply and demand.

That is to say, the currency in the market must also have the ability to adapt to the relationship between supply and demand, that is, adaptability .

In addition to the natural requirements and market requirements of the above-mentioned currency, the administrative requirements of the currency can also be put forward from a larger perspective - the currency issuer must have the ability to regulate the issuance and distribution of the currency to meet the policy needs, that is, the ability to regulate . Of course, this requirement clearly does not hold true for liberal monetarists who believe that money should be freed from governments.

Is digital currency money?

Let's summarize first, something that is to be money must have the following two and a half properties:

1. stability
2. adaptability
3. controllability

For example, in the earliest shell coins, the output of shells was basically constant, and there were actually very few qualified shells, so the output was not only constant, but also very small, so although it could meet the stability under the technical conditions at that time, it was almost impossible. Satisfying suitability, as business activities (of course not called business at the time) become more and more, it will soon no longer be suitable as a currency.

And precious metals can naturally meet the requirements of stability, and the output is also constant, so it can also meet the adaptability. Taking Roman gold coins as an example, during the Roman expansion period, with the inclusion of gold mines in the Iberian Peninsula and the Middle East into the imperial territory, the stability and adaptability of gold coins can basically be satisfied, so the Roman economy during the expansion period has not been too much. big problem. However, when the pace of Roman expansion stopped, its huge daily consumption could not be satisfied by the emergence of more gold mines, and the adaptability of gold coins was greatly challenged, so the Roman emperors in this period continued to put the gold coins in the gold coins. The reduction of gold content was also during this period, and a large number of "bad money drives out good money" phenomenon. Finally, the Roman currency system was destroyed, and the Roman economy entered a dangerous bottleneck period.

After switching from precious metals to base metals, behind the copper coins and iron coins is actually the national credit as a guarantee. People believe that behind these base metal currencies, there is a certain amount of precious metals as credit collateral, so the credit behind the currency is the state, From national credit to gold bullion in the treasury, monetary contracts are secured.

At this time, the economic collapse caused by the currency often occurs in the country's excessive currency issuance. For example, in the Song and Ming dynasties, the uncontrolled and indiscriminate issuance of banknotes made the empire’s economy fall into a quagmire that it could not get out of. In the end, there was a little natural disaster and man-made disaster, or even a big move during the ice age, and the empire immediately perished.

The sovereign currencies of modern countries are basically guaranteed by national credit, which provides the stability required for currency credit, and the country's economic policies, especially monetary policies, provide adaptability. Therefore, they can be used as currencies. Naturally There is no controversy.

But digital currencies are different.

Digital currency is often considered to have stability guaranteed by mathematical principles and IT technology, but this is actually a misunderstanding.

Including mainstream digital currencies such as Bitcoin, Ethereum, EOS, etc., the monthly output of digital currency is basically stipulated through program algorithms, and some even stipulate the final total amount, so it is often considered to have excellent scarcity. , which is also stable.

But this is not the case.

The stability of currency, or directly the stability of credit, is reflected in that when currency is used as a value scale, the scale remains stable in the three dimensions of time, space, and user - a digital currency can now be worth 10,000 yuan The U.S. dollar will appreciate to $60,000 in an hour, and then drop to less than $1,000 in half an hour. Such large fluctuations are not "stability as a measure of value" at all.

That is to say, there is no necessary connection between the output rate of digital currency and the stability of the total amount and the stability that currency as a value carrier must have.

This we can look at the real world - after Zimbabwe's currency experienced a slump[Note 3], no one will think that Zimbabwe's one billion yuan is still attractive, right? This is how destructive hyperinflation is to currencies. In the same way, the digital currency represented by Bitcoin is rapidly swinging in the range of less than 30,000 and more than 60,000, although the speed of the swing is not as fast as the Zimbabwean dollar - Bitcoin rose from $28,000 in two months To $57,000, the same time is almost just enough time for last year's new Zimbabwe dollar to fall back, but it is incomparable to the Zimbabwe dollar during the hyperinflation period of that year - but to say that the credit and value behind it can be good. stability, which is a test of belief.

It is actually an unethical practice to steal the concept of digital currency by linking the output of digital currency with a constant total amount and the stable value of digital currency. Of course, it must be pointed out that unstable value does not mean no value. Prices of stocks and futures can also be volatile, but you can't say they are worthless. However, as a currency, it is not qualified enough, and it does not deny its value.

Therefore, some friends may say that USDT is always stable, right? And if the world of digital currency drives away the predators like Musk who have greatly disrupted the currency value, its price will always return to stability, so digital currency itself has the stability required by currency, but because of speculation. The guest was making trouble, so he showed a bad form.

Well, let's look at the second point: adaptability.

In essence, currency still serves economic activities. Currency that is separated from economic activities is essentially like a fish taken out of water. It is not dead yet, but it obviously loses its greatest survival value—of course, it may In this way, we have a new value of raw fish that people feel happy after being eaten, and we will leave this aside.

The adaptability of the currency is required, and it must be able to build enough common bridges for the supply and demand sides in the market to match each other.

That is, demand, supply, and monetary quantity must match in pairs.

The amount of currency must be able to meet the needs of both supply and demand, which means that in each time period, the total amount of currency should be determined by the relationship between supply and demand, and then flow from the currency issuer into the hands of the demander who needs currency in the market in an appropriate way.

We do not consider the "proper way" mentioned in the latter part here, which is a problem that economists and economic system designers and regulators have to consider. We only consider the first half here: the amount of money must be able to match the supply and demand relationship for a period of time in the future.

However, digital currency itself does not have this feature.

The currency issuance volume of digital currency, including the output per unit time and the total amount of currency in a certain period of time, is hard-coded by the algorithm, which means that regardless of the actual supply and demand relationship in the market that uses these digital currencies , it has only so much money - it may be more than the actual demand, it may be less than the actual demand, but whether it is more or less, the amount is like this, it will not increase or decrease.

Then there is the problem: the amount of money is decoupled from the supply and demand in the market.

At this point, looking back at the milk village example we cited earlier, we will find that in order for such a system to survive "healthily", either the prices of all commodities are adjusted according to the relationship between supply and demand, or a committee regulates the actual currency in circulation Quantity - when the algorithm is published too much, it will be collected. When the algorithm is feverish, the collected digital currency will be released. If it is still not enough, miners will be called to change the algorithm. This way is generally not feasible, then Go burn incense.

Neither path is easy.

Obviously, the first way does not need to be considered. In the real commodity economy society, the price does not increase and then decrease. This idea can only be a naive utopian.

The second way is contrary to the genes of digital currency - one of the concepts of digital currency is decentralization or weak centralization, so in the real world, banks often use interest and other means to control the total amount of digital currency in circulation. This is something that cannot be done in the world of digital currency - some do not accept this practice in concept, and more are not supported by the algorithm itself.

In the case of Bitcoin, it has no central bank, and all Bitcoins are "distributed randomly determined by the weight of computing power" through mining behavior. In an ideal state, the probability of each user obtaining new bitcoins is similar, so it is impossible to establish a central regulatory organization that can control whether all bitcoins enter the circulation field.

In a more practical situation, the newly mined bitcoins are controlled by the largest mining farms-according to the latest statistics this year, the total computing power of my country’s mining farms accounted for the total computing power of global bitcoins before my country swept out the mining farms. 75% of the total - at this time, these mining farms can theoretically unite to form an alliance to control liquidity, but in fact they do not have the willingness to control, they prefer to throw out Bitcoin when the price is high Cash out profit.

Or, more likely, a digital currency with DPoS or more "modern" consensus algorithms called "supernode committees with overall governance capabilities"? But in reality these supernodes don't have the knowledge and experience to do the job -- not to mention that they're more likely not to want to do it at all.

After all, in the final analysis, the decentralization concept of digital currency runs counter to the central control , so it is almost impossible for the adaptability of currency to be reflected in digital currency.

Not to mention controllability.

Therefore, at least so far, digital currency does not have these two and a half basic requirements that a currency should have.

From this point of view, digital currency is of course not a qualified currency at all.

It certainly has its value, but at present this value is more reflected in the investment field. We can regard it as a new type of investment product with great energy after traditional financial products such as stocks and futures. It is likely to bring you the possibility of achieving a class transition overnight, but it is the real meaning Obviously, the current digital currency is not enough.

Well, what about the future?

Is it possible for digital currency to become a real currency in the future?

Clearly, the problems of digital currency - poor stability, adaptability and controllability - are not completely unsolvable.

Let's not talk about digital currency projects such as DCEP in my country, even in the traditional blockchain-based encrypted digital currency category, theoretically, it can obtain better properties through appropriate transformation.

For example, on the basis of the DPoS consensus mechanism, the issuance of coins, the total amount, etc. are linked to the actual economic activities on the chain, especially the relationship between supply and demand - there can be many mathematical tools based on graph theory and modern monetary banking and currency. The theoretical tools of economics, they are all that people who are committed to making digital currency into real currency must learn and master.

The traditional PoS and PoW mechanisms obviously do not have such characteristics.

Therefore, in order to become a truly qualified currency, the underlying algorithmic mechanism of digital currency must be adjusted to move in a more centralized direction - DPoS is obviously more "centralized" than PoS and PoW [Note 4].

In addition to the technical level, the concept must also be adjusted.

For example, the limited amount of money does not mean that the economic system is healthy, and a healthy and normal economic system always has vector inflation. This can be said to be a common sense in economics, but the advocates of digital currency We generally consciously avoid and ignore this choice.

On the other hand, centerlessness and weak centering do not mean a better world, in fact quite the opposite, political science has repeatedly taught us over the past few hundred years that anarchism is the worst of all hells kind. But fans of the digital currency concept once again choose to consciously avoid and ignore this problem.

Therefore, it is only possible to make digital currency (and the blockchain behind it) truly effective and meaningful development in the real world, not just a small group of utopians Pyrotechnic sticks in hands with a group of rave speculators.

endnotes

1: From the International Monetary Fund (IMF), Finance and Development, September 2012,“Back to Basics: What Is Money? 》

2: This is what is said in "Das Kapital": a special commodity that is separated from the world of commodities and serves as a unified value expression material for other commodities. It is the product of the development of the value form to the third stage and the predecessor of money. It is the result of the development of commodity exchange, and it reacts to commodity exchange, which greatly promotes the development of commodity exchange.

In a simple value form, such as in the value equation such as 2 sheep = 1 axe, the axe in the equivalent form has already played the role of a "value mirror" and is the equivalent of a sheep. But in the initial stage of commodity exchange, the equivalents are not fixed on one commodity, and the commodities exchanged for each other alternately become the accidental equivalents of each other. The difficulty of direct exchange of things has led to the detachment of a commodity from the commodity world, which is something that everyone is more willing to accept in a certain area, such as sheep in a livestock area. All people exchange their commodities first with sheep, taking sheep as the equivalent of their commodities, and then exchanging sheep for other commodities. In doing so, it is easier to achieve the purpose of exchange than direct barter. The sheep thus becomes the general equivalent reflecting the value of all commodities.

In general, equivalents have two basic functions in commodity exchange: one is to reflect and measure the value of all other commodities, and play the role of a measure of value; Its appearance promotes the development of commodity exchange, and promotes the emergence and development of commodity production for the purpose of exchange.

3: In February 2020, Zimbabwe's annual inflation rate was as high as 540.16%, the highest since 2009. But in the new century, Zimbabwe's hyperinflation is much worse than it is now. The annual inflation rate at the beginning of 2004 was 624%. Two years later, in April 2006, it climbed to 1042.9%, and in June 2007, it reached an unprecedented 11,000%. By May 2008, the inflation rate had reached 11,000%. At 2,200,000% that knocked everyone's jaws off, a 100 trillion Zimbabwe coin is actually only worth 25 cents. In June 2015, the Zimbabwean government officially announced that it would abandon the Zimbabwe currency and use the new Zimbabwe dollar linked to bonds. At this time, the 35,000 trillion Zimbabwe currency can only be exchanged for 1 US dollar.

4: Considering that PoW generally has a strong concentration of computing power, PoS generally represents the centralization of assets, while the mature form of PoW is the centralization of computing power, and the two are different directions of centralization, so There is no question of who is more centralized than who. Of course, there are some PoW-like and PoS-like mechanisms that are dedicated to the idea of "fairer and more decentralized". They are of course more decentralized, but they are not currently mainstream because the market believes that their investment value or Said that the ability to benefit overnight is not strong enough.