Digital currency is an alternative currency in the form of electronic currency. Digital currency is only a substitute form of physical currency, which cannot be separated from the nature of currency.

The English name of bitcoin "bitcoin" contains the English word "coin", but in fact bitcoin does not have the basic attributes and functions of "coin".

Digital money must be money, which is to replace physical money with electronic money. Money has five functions: value scale, means of circulation, means of payment, means of storage and world money. Generally speaking, money is the largest liquid asset related to national income. It is actually an asset with real anchor. Digital currency must have the property of currency in order to be called a real "digital currency".

Bitcoin and other so-called "digital currencies" are not real currencies because:

First of all, bitcoin has no actual anchor and does not have the basic premise to become a currency. Monetary anchor is simply the thing that can provide the basis of measurement. Bitcoin is a string in nature, and it does not anchor any physical assets behind it, nor can it become the largest liquid asset related to national income.

At the same time, bitcoin does not have the stability of currency. Recently, bitcoin has seen an unprecedented rise. It is surprising to think of the roller coaster rise and fall of bitcoin a few years ago. Such an unstable value can not be used as the general equivalent of commodity exchange.

Secondly, bitcoin does not have the five functions of currency. First, there is no value scale function. The so-called value of bitcoin is measured by the existing legal currencies of various countries. Second, without the function of circulation means and without the function of value scale, how can circulation means come into being? Third, it does not have the function of payment. It can hardly be seen that it has the function of paying off debts or paying taxes, rents, wages and other behaviors. From a global point of view, no country has recognized it as a currency to pay. Fourth, there is no storage function. At present, once bitcoin exits various trading markets, its value will not be reflected. Fifthly, it does not have the function of world currency. No country in the world recognizes it as a means of monetary payment, and there is no way to talk about the means of payment between countries.

Thirdly, the monetary system has entered the era of sovereign credit currency dominated by the government. The national currency issue must have legal basis and form. Without legitimacy and legal compensation, it can not be used as currency circulation.

To sum up, bitcoin and other so-called "digital currency" are not real currency, nor electronic currency or digital currency. In the notice on preventing bitcoin risks issued by the people's Bank of China and other five departments on December 5, 2013, it is clear that bitcoin has four main characteristics: no centralized issuers, limited total amount, no geographical restrictions and anonymity. Although the name of bitcoin is labeled as "currency", it is not a real currency because it is not issued by the monetary authority and has no legal compensation and mandatory monetary attributes. In nature, bitcoin should be a specific virtual commodity, which does not have the same legal status as currency, and can not and should not be used as currency in the market.

(2021-3-26)