Virtual Currency: Analysis and Expectation

With the development of internet and increasing number of users, a new kind of currency come into being—virtual currency. Virtual currency has rapid development, and enter into the life of people quickly. What's the difference between virtual currency and real currency? On the one hand, virtual currency don’t have all the functions of the real currency. On the other hand, virtual currency and real currency have different properties. Virtual currency have their own characteristics, such as issued by a company, operated by the company that issued it, and use is not subject to regional restriction, etc., which real currency do not have. This article discusses these characteristics one by one, and discuss in depth the relationship between virtual currency and real money, and how issuing company and holder use virtual currency to gain benefits. This article builds econometric model and economy model to discuss this problem and use a kind of well-known virtual currency-bitcoin, as a sample. This paper establishes a series of premise assumptions, and using official data from BLOCKCHAIN info website, using the mathematical formula to discuss exchange mode of bitcoin and USD, and establishes the model framework to analyze the factors influencing the bitcoin exchange rate. In the end, this article discusses the future development of virtual currency and the possible risks virtual currency may encounter in the future, and discusses the possible problem about virtual financial system influencing the real financial system if virtual financial system may form. The model use here is original. Hence, it is in quite an extent an advisory one, which gives an idea for the future discuss.