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Archive October 2018

How to improve Bitcoin

How to improve Bitcoin

The improvement of Bitcoin’s ecology includes two aspects, one is the improvement of infrastructure and the other is the improvement of application scenarios.

I think it is mainly a node problem about Infrastructure. until now there are still many limitations in current hardware, if you have a wider network and a larger hard disk, you can think outside Thinking framework and think about it. Bitcoin core should be deployed at a finer granularity in a cloud network, there is no need to deploy a personal computer or mobile phone in the mobile terminal. For example, block chain router, he can achieve super node and transaction confirmation calculations into one, it is as simple and convenient to design the transaction settlement network to find wifi. For another example, the Internet of Vehicles is now very hot in the investment circle, because the car will inevitably become the information terminal for future mobile. A car can also be a super node or a private node of a block chain. When it comes to such a state, digital finance is really like water and air, everywhere, the richer the nodes, the time lesser when the bitcoin transaction broadcasts confirmation. The shorter, the digital currency can only be developed to this stage, in order to achieve the goal of “making freedom become freedom and wealth become wealth” as stated in the CCTV feature film “Currency”.

Nowadays, many people are studying sidechains. The main reason for the research on sidechains is that the amount of information that Bitcoin blockchain can carry is too small. As the ecosystem of Bitcoin itself is perfected, this problem will certainly be solved. Of course, the agreement also divided into many layers, the development of sidechains can become a higher-level protocol that will enrich Bitcoin’s flexibility to solve real-world problems.

With the improvement of the application scene, the entrepreneurs of the currency circle are making various attempts, games, cross-border online shopping, gambling, equity crowdfunding, etc., and there are many pain points in these scenes. Games: The issuance of game currency and cross-border circulation will definitely change the current format of virtual commodity trading; cross-border online shopping : cross-border redemption issues, especially for service-oriented commodities, such as copyright trading market, creative market, design market, outsourcing service market Etc., can promote the evolution of payment, there must be a blind spot in the global payment network, for example, designers in small African countries can directly serve a cafe in China through such a payment network in their own home; True fair, probabilistic, non-cheating lottery; equity crowdfunding: the company’s stock mark and no fraud, stocks are easier to virtualizes transactions, bitcoin unforgivable mark itself has very large practical value, theoretically The smallest unit of bit currency “Cong” can mark any kind of assets, including: simple and fast multinational signature, international contract signing, judicial deposit, etc. In the financial field, paying a Cong can become an angel investor, a person’s company It can also become a public company, all of which are possible in the Bitcoin network…

Can digital currency become a national strategy?

What role does digital currency play in imagining national strategy? When Silicon Valley prophet Kevin Kelly came to Beijing headquarters in 2014, he said, “I think the Chinese government may ask for an (official) digital currency within 15 years because it provides open and detailed transaction records. Of course, this digital currency may be similar to a bank, not a bitcoin.” There is a consensus that many people agree that Bitcoin still has the potential to become a phased product, but Bitcoin technology will certainly develop in the long run. Does the government have such a claim? Absolutely there is, of course, it will certainly not be a form of bitcoin, more embedded. At the national level, the country does not need digital currency such as P2P, anonymity, anarchism, and risk of money laundering, and these characteristics are not inherent properties of Bitcoin. The essence of blockchain technology is that it is an open and transparent transaction record. We removed the anonymity of Bitcoin, extracted the p2p general ledger technology, password verification technology, and put it into a subdivided sample to see if it can solve some real problems. For example, financial transfer payments, project-specific fund management issues, pre-programmed settings are definitely more efficient than post-special audits. It can also better solve the problem of the game between the local government and the central government. When running the money, the space for rent-seeking will be compressed. For example, solving the problem of social security medical insurance, the idea of ​​using digital currency for fund management under complicated conditions can greatly improve efficiency. Everyone is in the scene of our medical insurance reimbursement, various diseases, various medicines, our country’s management system can not meet this complicated condition, can only continue to recruit people to carry out human governance, artificially created inequality, leading to extreme Inefficiency and social injustice. For example, the central bank’s currency control of banks, using digital currency can also achieve more efficient and accurate management, do not worry about out-of-control in vitro and off-balance sheet issues in the bank’s statement of accounts. Many of our macro-decisions are based on erroneous economic data. It is not said here that it is the most hated thing ,so many economists hate that. Let us think more farther. The original top-down administrative management mechanism is difficult to adapt to the ecological environment in which all things in the world are freely connected. The systems, policies, and rules of our country are all based on administrative power. Under the spur of the implementation of such a system, the underlying innovation is very small, and the time of its own evolution is very long.

Speed up the process of globalization

Even in the farthest places on the earth, the time of information dissemination only takes 0.8 seconds. The emergence of the Internet has flattened the world, and the advantage of information symmetry is no longer a patent of a few people. The emergence of Bitcoin can make the world more flat. It is too valuable to let human beings around the world recognize a monetary standard and financial agreement regardless of country, culture, race, and language. By establishing an open, transparent and verifiable system, everyone can participate in simple game rules and make it a global currency. Only then can the Earth be eligible to participate in interstellar competition.

Foreign Exchange Rate

Foreign Exchange Rate

What is the exchange rate?

The exchange rate refers to the price expressed by one country’s currency in another country’s currency, or the price between the two countries’ currencies. In the foreign exchange market, the exchange rate is displayed in five digits, such as: Euro EUR 0.9705 JPY JPY 119.95 GBP 1.5237 CHF CHF 1.5003 The minimum change in exchange rate is a point, that is, a digit change in the last digit, such as : Euro EUR 0.0001 JPY JPY 0.01 GBP GBP 0.0001 CHF CHF 0.0001 According to international practice, three English letters are usually used to indicate the name of the currency. The English after the Chinese name is the English code of the currency.

The price of exchange rate

Direct quotation method and indirect quotation method are the two types of pricing methods for exchange rate:

(1) Direct quotation method The direct quotation method, also known as the payable quotation method, calculates how many units of national currency are payable based on the foreign currency of a certain unit (1, 100, 1000, 10000). It is equivalent to calculating how much local currency is required to purchase a certain unit of foreign currency, so it is called the price-paying method. Most countries in the world, including China, currently use the direct price method. In the international foreign exchange market, the yen, the Swiss franc, the Canadian dollar, etc. are all direct price methods, such as the yen 119.05, that is, one dollar against 119.05 yen. Under the direct price method, if the foreign currency of a certain unit is more than the previous period, it means that the foreign currency value rises or the value of the local currency declines, which means that the foreign exchange rate rises; on the contrary, if you use less local currency, you can exchange it with the same currency. The amount of foreign currency, which indicates that the value of the foreign currency is down or the value of the local currency is rising, it is called the foreign exchange rate decline, that is, the value of the foreign currency is proportional to the rise and fall of the exchange rate.

(2) Indirect quotation method,which is also known as the levy method. It is based on the national currency of a certain unit (such as 1 unit) to calculate the foreign currency receivable for several units. In the international foreign exchange market, the euro, the pound, the Australian dollar, etc. are all indirect price methods. For example, the euro 0.9705 is one euro against 0.9705 US dollars. In the indirect price method, the amount of the national currency remains unchanged, and the amount of the foreign currency changes as the value of the national currency changes. If the amount of foreign currency that can be exchanged in a certain amount of local currency is less than that in the previous period, this indicates that the value of the foreign currency has risen, and the value of the local currency has decreased, that is, the foreign exchange rate has decreased. Conversely, if the amount of foreign currency that can be exchanged for a certain amount of local currency is more than the previous period, the foreign currency has decreased. The value of the local currency has risen, that is, the foreign exchange rate has risen, that is, the value of the foreign currency is inversely proportional to the rise and fall of the exchange rate. The quotation in the foreign exchange market is generally a two-way quotation, that is, the quoting party simultaneously reports its own buying price and selling price, and the customer decides the buying and selling direction. The smaller the spread between the bid price and the ask price, the lower for the investor. The quotation spread of inter-bank transactions is normally 2-3 points. The quotation spread of banks (or dealers) to customers varies greatly depending on the situation. At present, the quotation spread of foreign margin trading is basically 3-5 points, Hong Kong is at 6- At 8 o’clock, domestic banks’ firm trading ranged from 10-40 points.

In the international market, almost all currencies have an exchange rate against the US dollar. The exchange rate between a non-US dollar currency and another non-US dollar currency often needs to be calculated through the two exchange rates against the US dollar. The calculated exchange rate is called the cross exchange rate. A notable feature of the cross exchange rate is that an exchange rate involves it between two non-US dollar currencies.

What is the “point” (basic point) in the foreign exchange rate?

According to market practice, the price of foreign exchange rates is usually composed of five significant figures, from the right to the left, the first is called “X points”, which is the smallest unit that constitutes exchange rate changes; the second is called “X” Ten points”, and so on. Such as: 1 euro = 1.1011 US dollars; 1 US dollar = 120.55 yen, the euro against the US dollar from 1.1010 to 1.1015, said the euro against the US dollar increased by 5 points against the yen from 120.50 to 120.00, said the dollar fell 50 points against the yen .

Fixed exchange rate and floating exchange rate

A fixed exchange rate is an exchange rate in which the exchange rate between one country’s currency and another’s currency is basically fixed. The fixed exchange rate system was implemented in the gold standard system from the early 19th century to the 1930s and the US dollar-centered international monetary system after the Second World War to the early 1970s. The fixed exchange rate is not completely fixed, but rather fluctuates around the upper and lower limits of a relatively fixed parity. For example, after the Second World War, the fixed exchange rate system centered on the US dollar, the official parity of the currencies of the member countries of the International Monetary Fund is parity. The currency exchange rate of each member country can only fluctuate by 1% above the parity, and the central bank intervenes.

The floating exchange rate refers to the fluctuation ratio of the exchange rate between a country’s currency and another country’s currency, and is determined by the supply and demand relationship in the foreign exchange market. On August 15, 1971, the United States implemented a new economic policy, allowing the US dollar exchange rate to float freely. By 1973, countries generally implemented a floating exchange rate system. It was also from that time that the foreign exchange market continued to develop with the constant fluctuation of various exchange rates. The floating exchange rate is divided into two types: “free floating exchange rate” and “management floating exchange rate” according to whether the government intervenes. In real life, the government does not take any interventions on the exchange rate of its own currency, and there are few countries that adopt a free floating exchange rate. Since the exchange rate has a major impact on the country’s balance of payments and economic balance, most governments control the exchange rate by adjusting interest rates, buying and selling foreign exchange in the foreign exchange market, and controlling capital movement.

Characteristics of the foreign exchange market

Characteristics of the foreign exchange market

In recent years, foreign exchange market are more and more popular.It has become the new lovers for international investors, which is closely related to the characteristics of the foreign exchange market. The main features of the foreign exchange market are:

  • No Market

The financial industry in the western industrial countries basically has two systems, namely, the central operation of centralized trading and the business network without unified fixed places. Stock trading is bought and sold through exchanges. Like the New York Stock Exchange, the London Stock Exchange, and the Tokyo Stock Exchange, which are the main trading places of stocks in the United States, the United Kingdom, and Japan, the financial products that are bought and sold collectively have uniform provisions for quotation, trading time, and settlement procedures. A trade association was established and a code of practice was established. Investors buy and sell the goods they need through a brokerage firm. This is “there is a market.” Foreign exchange trading is conducted through a network of merchants that do not have a unified operating market. It is not like a centralized location of stock trading. However, the network of foreign exchange transactions is global and forms an organization without organization. The market is connected with advanced information systems by means of mutual recognition. Traders do not have membership in any organization, but must obtain the same Industry trust and recognition. This kind of foreign exchange market without a unified venue is called “there is no market.” The global foreign exchange market trades an average of $1 trillion a day. Such huge amounts of money are in the absence of centralized facilities and without the control of a central clearing system, and the completion of liquidation and transfer without the supervision of the government.

  • Recycling operations

Due to the geographical location of various financial centers around the world, the Asian market, the European market, and the American market have become a global foreign exchange market that operates continuously 24 hours a day due to the time difference. 8:30 am (New York time) New York market opened, 9:30 Chicago market opened, 10:30 San Francisco opened, 18:30 Sydney opened, 19:30 Tokyo opened, 20:30 Hong Kong, The market opened in Singapore, opened at 2:30 in the morning, and opened at 3:30 in London. With such 24 hours of uninterrupted operation, the foreign exchange market has become a market that stays up all night, and the foreign exchange market will only be closed on Saturdays, Sundays and major festivals in various countries. This continuous operation provides investors with an ideal investment location without time and space barriers, and investors can find the best time to trade. For example, if investors buy yen in the New York market in the morning, the yen rises after the market opens in the evening, investors can sell in the Hong Kong market, regardless of where the investor is, he can participate in any market, any time. Buying and selling. Therefore, the foreign exchange market can be said to be a market without time and space barriers.

  • Zero-sum game

In the stock market, if a certain stock or the whole stock market rises or falls, then the value of a stock or the stock value of the entire stock market will rise or fall, for example, the price of Japan’s Nippon Steel’s stock will 800 yen fell to 400 yen, so the value of all Nippon Steel’s stocks has also been reduced by half. However, in the foreign exchange market, the change in the amount of value represented by the fluctuation of the exchange rate is completely different from the change in the value of the stock. This is because the exchange rate refers to the exchange ratio of the two currencies, and the change in the exchange rate is also a decrease in the value of the currency. Another increase in the value of money. For example, 22 years ago, 1 US dollar was exchanged for 360 yen. At present, 1 dollar is exchanged for 120 temporary yuan. This shows that the value of the Japanese yen has risen, and the value of the US dollar has declined. From the total value, it will change and will not increase the value. And will not reduce the value. Therefore, some people describe that foreign exchange trading is a “zero-sum game”, or more precisely a transfer of wealth. In recent years, more and more funds have been invested in the foreign exchange market, and the volatility of the exchange rate has been expanding. The scale of wealth transfer has become larger and larger, and the speed has become faster and faster. It is calculated based on the daily transaction volume of 1.5 trillion US dollars of global foreign exchange. A rise or fall of 1% means that 150 billion yuan of funds will be exchanged for new owners. Although the foreign exchange rate varies greatly, no currency will become waste paper. Even if a certain currency keeps falling, it will always represent a certain value unless it is declared abolished.