On December 5, the 2019 Southern Finance International Forum with the theme of "Innovative and Open China's Capital Market" was held in Guangzhou, aiming to build a platform for communication and cooperation between China's financial field and the global financial market. Hundreds of heavyweight guests focused on China's capital market and carried out a rich collision of ideas. Together, we will discuss new challenges and opportunities in the innovation and opening up of the capital market.
Thomas J. Sargent, Professor of economics at New York University and winner of the 2011 Nobel Prize in Economics, was invited to attend the forum.
Since the early 1970s, Sargent has been a leading figure in the rational expectations school, making outstanding contributions to the establishment and development of neoclassical macroeconomics, and doing pioneering work on the role of expectations in macroeconomic models and the relationship between dynamic economic theory and time series analysis.
Sargent highlights two of today's technologies: artificial intelligence; Digital currency and blockchain. He believes that the impact of artificial intelligence and digital currency is very profound, and people realize the normal application of digital currency through blockchain. The relationship between blockchain and artificial intelligence is not a competition, but a complementary relationship, they do different work and form a complete whole with each other.
He pointed out that in the field of innovation such as artificial intelligence, blockchain technology and digital currency, China is currently in a relatively leading position.
From the perspective of traditional economics, China has a very large market size and volume, but there is also a high cost of transportation, communication and communication, as well as the risk of non-performance in the process of business transactions and verification and execution costs. Through blockchain technology, these costs can be effectively reduced.
Sargent mentioned that based on blockchain technology, digital currency can be established, he stressed that digital currency can solve many problems, but the disadvantage is that it needs to prevent theft, counterfeiting and counterfeiting security technology, and obtain improper interests on the basis of harming the interests of others. The application of blockchain to digital currency can ensure the security of the monetary system, prevent currency theft and counterfeiting, and also achieve fast long-distance transmission and transactions. "Because there's no way to change the record, and it's an algorithm that records unique passwords, it can record unique facts, there's no ambiguity, it's very accurate." "Sargent said.
Sargent said that through blockchain technology, it can also make the entire transaction more efficient, and financial managers in many countries are actually very interested in blockchain technology. People are now mainly connected to each other through banks, but there are some problems with the current dominant technology, and third-party trust agencies often become a monopoly situation. Under this monopoly, the fees charged by a single intermediary are very high. With the help of blockchain technology, the monopoly of third-party intermediaries can be broken.
But it is undeniable that many blockchain systems are currently inefficient, such as Bitcoin. Bitcoin verification is the equivalent of a race, which leads to competition as everyone rushes to verify the transaction and offers money as a reward. And the cost of "mining" is relatively high.
Sargent says he sees opportunities as well as challenges. There are new things that are coming out, including the development of computers, the development of different skills, which is unfinished business, the protection of privacy through data sharing, including reducing the cost of transactions, which will bring great benefits to people, but also bring opportunities and challenges, and regulators and central banks need to think about how best to face this challenge.