China's central bank digital currency: operating framework and technical analysis

• The English abbreviation of the People's Bank of China digital currency is DC/EP, DC is Digital Currencythe abbreviation of (digital currency), and EP is the abbreviation of Electronic Payment(electronic payment), and its main function is to be used as an electronic payment method.
• Article address: RMB 3.0: China Central Bank's digital currency operation framework and technical analysis (downloadable)

① Libra

• In June 2019, Libra, a cryptocurrency project led by Facebook, released a white paper claiming to establish a simple global monetary and financial infrastructure to serve billions of people. Libra, which was born out of nowhere, is regarded by many as a subversive force in line with the existing financial and monetary system.
• Libra is a digital currency that has not yet received regulatory approval. Although its value is linked to a basket of currencies, it still has a large impact on the existing monetary system and squeezes the space for the use of legal currencies in existing countries.
• Electronic payment has become a major trend in future development. Credit card payment in the United States is extremely developed but electronic payment is relatively backward. The digital currency issued by Libra and other institutions with the US dollar as the main anchor can help the United States achieve a breakthrough in the field of electronic payment to a certain extent. .

② Cryptocurrency

• Encrypted currency is a currency created and issued based on blockchain technology. At present, Bitcoin, Ethereum, EOS, etc., which are common in the currency circle, are all encrypted currencies.
• However, in recent years, in the relevant documents of my country's regulatory authorities, it is generally mentioned that virtual currencies usually refer to unregulated cryptocurrencies represented by Bitcoin and Ethereum.
• About EOS:

1. EOS: Enterprise Operation Systemthe abbreviation, the Chinese meaning is: commercial-grade blockchain operating system. It can be seen from the name that EOS is a blockchain operating system designed for commercial distributed applications.
2. EOS is a new blockchain architecture introduced by EOS software, which aims to achieve performance expansion of distributed applications.

At present, there are several pain points to solve in the blockchain world:
   ① Difficult to expand (such as Bitcoin's expansion battle);
   ② Expensive (for the purpose of preventing DoS, encouraging miners to pack, etc., public chains basically have their own incentive policies 。Each step of the execution of the Ethereum smart contract requires payment. As the transaction volume increases, the transaction fee increases accordingly)
   ③ Lack of interoperability (although Ethereum creatively introduces the concept of smart contracts, which greatly simplifies the blockchain application However, the Ethereum platform still has a big limitation, that is, the transaction confirmation time and transaction throughput are relatively small, which seriously affects the commercial application of Ethereum.)

3. It is not a currency like Bitcoin and Ethereum, but a token issued on top of the EOS software project , called Blockchain 3.0.

• EOS reference documents:

1. What you need to know about EOS, just read this article
2. Baidu Encyclopedia-EOS (Blockchain)
3. What is EOS (grapefruit) - Important
4. EOS (Grapefruit Coin) Introduction
5. Introduction to EOS (Knowledge)

③ Central bank legal digital currency and blockchain technology

• Six of the 10 patents submitted by two UPM companies under China Super Credit Card Industry Development Co., Ltd. mentioned blockchain . These patents reflect the application of blockchain technology in legal digital currency design:
• Digital currency wallet address management
• Transaction information supervision: The third level of confidentiality of transaction information to irrelevant on the blockchain is realized.

1. Obtain digital currency transaction information from the blockchain. The digital currency transaction information includes: supervised user information, first participant user information, and encrypted data.
2. According to the initial public key of the first participating user and the initial private key of the supervising user, the shared key algorithm is used to generate the first shared private key of the first participating user.
3. Use the first shared private key to decrypt the encrypted data, and obtain the clear text of the digital currency transaction information between the supervising user and the first participating user.

• Digital bill transaction supervision

④ Countries that issue legal digital currencies based on blockchain

• 2015, Tunisia created using the block chain technology eDinar(also known as Digicashand Bit-Dinar) that the country's digital edition legal tender. Tunisia thus became the first country in the world to issue a national currency based on the blockchain.
• After Tunisia, the African country Senegal ( Senegal) has become the second country to issue a national currency based on blockchain.