When it comes to digital currencies, bitcoin comes to mind. However, Bitcoin is only one of the digital currencies, and China is currently piloting its own digital currency. What is the difference between this and Bitcoin?
The currency
Bitcoin uses blockchain technology, and one of its features is decentralization. It exists on the Internet, is recorded in distributed bookkeeping, is self-managed, is not issued by any country, and is not controlled by any organization. However, its transaction procedures are more complicated, and the transaction confirmation time is also very long, which limits its wide use.
Simply put, to use bitcoin, we need to open an account on a Bitcoin exchange and get a digital wallet. The wallet contains two keys: a public key and a private key. Apparently, asymmetric encryption was used. In which public key length is 512, is too long, so the hash algorithm to get a 160 – bit public key fingerprint, as the address of our wallets, like this: 1 bvbmseystwetqtfn5au4m4gfg7xjanvn2
When A transaction is made, it is reported first, for example, that wallet address A pays 10 bitcoins to wallet address B. As the payer, provide the following information:
Hash of last transaction (where did you get these Bitcoins from) address of both parties of this transaction public key of payer private key of payer digital signature generated
The system can confirm the authenticity of the transaction based on the above information: 1) using the public key of the payer to generate fingerprint matching address to confirm the authenticity of the public key; 2) using the public key to unlock the digital signature to confirm the authenticity of the private key. Guess that the signature should contain a timestamp or something, so that it is not copied from somewhere else.
The transaction is not completed until its authenticity is confirmed. The transaction data must be written into the database before it is valid and the other party can actually receive the money. Blockchain is a kind of distributed ledger, each page of accounts is a block, each block is 1MB, can record about 2000 transaction information, the miner is responsible for collecting the transaction information and writing to the new block. The process of generating blocks, commonly known as mining, is subject to harsh computational constraints, and is increasingly difficult, time-consuming, and power-consuming, and if you pay too low a transaction fee, you may not be able to confirm the deal because no miners are interested.
China’s version of digital currency
China’s version of the digital currency, like the paper yuan, is issued by the Central bank.
Why have so convenient alipay and wechat payment, but also engage in the national team’s digital currency? In fact, Alipay and wechat Pay are only payment systems and have not issued digital currency. The object of operation is still money in the banking system, which should still be paper money at the present stage. Now the central bank’s digital currency is a real currency with legal status, but in digital form, an electronic version of the renminbi.
Therefore, it is not difficult to understand that the digital currency can be supported by third-party payment systems such as Alipay and wechat. Of course, the national team will also provide support. For individuals to use digital money, like Bitcoin, a digital wallet should be managed. The digital wallet is said to be something similar to a bank account, but separate from existing bank accounts.
We don’t know exactly. But the payment system that underpins it can be independent of the Internet, where two phones touch, or phones touch pos, and the transaction is done. Its principle is estimated to be using Near Field Communication (NFC), just like the bus pass. Bus card is IC card, there is a chip inside, can read and write (ID card is a magnetic strip card, can only read can not write), brush bus card, bus card and card reader will write data.
Here’s the problem. Bus card money, stored in the bus card, card lost, money is gone. So digital currency, is the phone lost money? If that’s true, you might as well use mobile payments now. However, digital currencies are certainly not so weak, and there must be some mechanism to ensure that the money can be reported lost, or even if someone finds it, it can’t be used without your key.
Digital currency has many advantages, for the regulatory authorities, can strengthen supervision. But for the individual, privacy seems to be limited, because every expenditure, the context, is very clear. But in fact, even with paper money, each paper money has a unique number, if you want to check, you can also check.
The Chinese version of digital currency, to come? What is it? How does it work?