The future of the currency: people and algorithm, after all, is different

on May 21, hunting cloud network

cloud network hunting note: in this paper, the author David Berger is digital currency committee (DCC), chief executive officer of the agency members are in the field of electronic currency authority. Mr Berger, the perspective of the whole of the currency was discussed, and four constructive Suggestions are provided for the development of industry, have a good insight.

all began on October 31, 2008, in the history of philosophy a ambitious want to. He proposed building a don’t rely on interpersonal trust to maintain the electronic transfer system. But the COINS in the face of many difficulties in the future, especially for its negative impressions, it is by its not on interpersonal trust as pillar features. Despite the currency behind technology unceasing diligence make its already strong security, a negative perception of the currency of a large number of consumers grabbed the individual currency user violation of fiduciary duty, thus further discredit the whole image of the currency, and also affects the relationship between it with the user.

the negative effect on the currency industry mainly from the media and public opinion. Unfortunately, despite the entrepreneurs and venture capitalists are very bullish on the development of this field, with the media or public opinion more attention focused on the negative reports in the industry. Such as cheats the use of the technology for illegal trading headlines more often.

, for example, wired magazine in March last year with “the Mt. A bigger inner revelation, the currency collapse of 460 million” title published reports. “COINS ponzi scheme – Texas man charged with illegal fund-raising”, in June of last year became the Wall Street journal headline. In addition to other small and large media has more or less published similar headlines, such as “black market” silk road “operators” online terror pirates’ Ross Ulbricht prosecuted “(bloomberg news in February 2015 (4),” 2 former federal agents was accused of theft during in search of “silk road” COINS “(CNN2015 on March 30 (Reuters)),” members of the board of directors Olivier Janssens reveal the currency funds of truth “(CoinTelegraph, April 5 (2015)

these headlines often sensational, not only left a negative impression of COINS to the masses, the more potential investors to this industry.

, reduce the risk of industry, to rebuild market confidence

although the currency of this technology in theory can maximize reduce the risk of electron transfer, real COINS in the industry and the market is far less idealistic. To a large extent, the prosperity of this area is closely related with the self-discipline of the participants.

in general, when a new technology and development, the experts in the field of different in different ways to maintain all aspects of this new technology, in order to maintain its operation. For circle centered on the currency of the industry is no exception. The industry is to follow the law of the circle is growing rapidly. However, with the scale expanding, COINS hidden crisis is looming in the user group, because of the use of the currency in financial crime of users will increase along with the industry circle is proportional to the expanding.

although as part of the economy, trade and industry, the risk is almost a shadow is difficult to get rid of the nightmare, the currency industry can still through actions to reduce risk, enhance confidence in the market. In my opinion, the method is the following:

1. To establish a set of COINS of professional technical team, and on the hardware and software support for their work. Has a professionally trained currency system operation team to better show the professional ability of protect user transaction security.

2. Set the entry barriers, and to ensure without reducing the opportunities under the prerequisite of guarantee user group’s credit level.

3. Establish core professional competency assessment system.

4. A series of industrial behavior standards, including industry code of ethics, credit system and the enforcement of the international remittance standard

most people mention the commercial application of the currency, is probably the first think of the international remittance. Today, the industry is still about the service charge high fees, and that offered opportunities for new businesses into the line. They can loan investment COINS, the impact on the current pricing system.

however, the price is far from the international remittance consumers consider the only factor, by contrast, the service provider’s credit is often more important. If anyone had learned some monetary transmission heard of navarre system are not strange, this kind of from the middle ages and the Middle East, North America and South Asia in underground cash flow system based on intermediary credit as the fundamental. Agent must first trust system, traders must also believe that he had contact with the mediation, this trust by word of mouth between generations.

, according to people the possibility of COINS as remittance media lack confidence

since the currency’s initial, direct interactions between professionals and consumers is the biggest challenge. Recent survey shows that only a small part of the American consumers compared to traditional industry, remittance more sure the credit of the currency as the medium of international remittances. This is part of the media to blame negative reports.

it is worth mentioning that there are some consumer distrust of everything all traditional remittance service. Maybe successors can work in this respect, develop the market.

as I speculate that consumers not only knew nothing about the technology behind the COINS, the traditional international monetary flow behind the technology is unfamiliar to them.

away from the postal service, talk about the past 40 years in the United States as the starting point of the international remittance is mainly use the following two technology: t/t and ACH collection &payment service (also known as the media exchange transfer service, via ACH organization operation outside of the United States). These two service the main providers of the western union and moneygram two companies with a long history, lucrative but orderly steady in the field of two great traders.

in this field, including the two above, last year, a total of extract from handle remittance of $16 billion. According to world bank statistics, the industry has handled a total of about $438 billion last year of the remittance. Its customers mainly come from developing economies. When the service fees at up to 29% of the remittance.

said t/t again, the fed’s global banking financial telecommunications association as well as the clearing house interbank payment system in New York institutions are able to offer this service. The service strengths is the ability to realize the real-time transfer of financial institutions, and at the same time provide both sides of the account information. Although the cost is higher, telegraphic transfer service (as long as the transfer bank both sides support t/t) or can provide relatively fast remittance experience.

the ACH, different from the newer telegraphic transfer, based on the electronic payments association forty years ago, has set up a set of mature standards. Ordinary people will be more familiar with the ACH, because we paid at ordinary times or on deposit within families will use the service. Because in the ACH transfer request is batch processing rather than as separate execution as t/t, so the cost is much lower than t/t. But for the same reason, ACH transfer time is relatively long: general ACH remittance is usually a few days to get to the bill. Although there are many private financial institutions try to shorten the remittance of ACH time and further reduce the cost, but to little effect, after all the ACH behind already mature technology and operation mode is hard to be further improved.

COINS, in contrast, technology is more advanced. The emerging system based on chain code block (blockchain) set up the subsidiary ledger of open mode, and using the decentralized instead of centralized computer group to confirm. These COINS have called mining machine computer will compete with each other by means of calculus of mathematical problems between the confirmation of rights, and rewarded at the end of the checking calculation. In a large number of scattered under the massive computing power of the third party computer group, a deal only about ten minutes to confirm completed, give the currency system for transfer on both sides at the same time the transaction costs.

consumers will be in the benefits of science and technology and interpersonal trust between weighing

no matter how exciting cutting-edge computer science has made technical breakthrough, consumers don’t care too much. They don’t put the technical difference between ACH and t/t into consideration, even not intentional to distinguish different wire transfer service. At the same time, I also think that consumers may not be bothered to figure out what mail service is used when the cash in the mail package sorting system.

instead, consumers care more about each specific technology can bring benefits, and will be very care about these specific cash transfer service personnel is trustworthy, after all, she will put her love her love hard earned money to their host. At least to me, every time I go to old western union stores are involuntary worry when my cash remittance will be a problem, that I will from time to time your pocket to make sure their cash is not missing.

the remittance on your company’s contract terms and conditions are so complex, even the lengthy security terms of the extreme sports all pale in front of it. In fact, it is not don’t trust the remittance company used by the science and technology but distrust

remittance companies using these technology and have the opportunity to participate in cash transfer employees (I think they also don’t trust those yards out those long terms of lawyers).

and algorithm, after all, different

however, the data show that those with the COINS are inextricably linked, or in other words, the small dial in the past two years, focusing on the most media attention the currency of the user, began to distrust the currency system.

COINS community has begun to realize this barrier, and take some countermeasures: they either to carry out public relations action to restore confidence in the currency, or the COINS from their marketing strategy and brand image of the completely removed, or ensure that the currency will have to do with the beneficiary of the remittance service, especially not at the end of the remittance application steps used in the key steps. These measures are reasonable, but not enough to overcome this obstacle.

I personally to the future of the COINS have every confidence that the financial industry, as represented by the currency of the emergence of new technology, the future remittance service transparency and for the protection of consumers will be much more powerful than the traditional financial system. However, today’s consumers have preferences through with good credit entity remittance to money transfer service provider. If the traditional professional remittance network and the technology of a new era of COINS can be organic combination, so the currency is good for reducing the traditional artificial risk in financial services, and entity remittance service good reputation can let consumers more widely accept COINS techniques.

this philosophy of history will COINS into the market, he describes it as a “completely decentralized, don’t need a trusted party central server support” technology, because the currency technology “completely based on the encryption certificate instead of interpersonal trust”. However, unlike the currency network, the business enterprise and actively contact customer financial practitioners just have the emotional side of normal human – and algorithm, different after all.