Analysis Of The Influences Of Internet-based Virtual Currency On Microeconomy

In recent years, the argument over whether virtual currency can have an influence on the real economy is a hot topic of the frontiers in economics. At the same time, the Internet continues to expand its application border, and gradually penetrates into each corner of social life, bringing a significant impact upon various fields of the society.Judging from the present development of the virtual currency, the emergence and the issue of virtual currencies are mostly the behavior of enterprises. However, with the further evolution of the Internet and the development of the economic globalization, the research of the virtual currency--about the nature, the influences on the micro-economic development--can offer essential guidelines for the establishment and implementation of the country's development strategy and monetary policy. Whereas the study of foreign country cases, as conducted in this article, which helps summarize the development trend and direction of virtual currency, can provide precious theoretical, as well as practical experiences for those LDCs to avoid the further expansion of the "digital divide" .At present, the Chinese academicians'studies on the virtual currency have arrived at very different conclusions. Some regard virtual currency as the scourge, while others consider it no future. All these views share a common premise that they judge virtual currency by a mature monetary standard, or even by the credit currency standards of the reality. Therefore, to analyze and discuss related issues, this article classifies virtual currency into two categories--elementary virtual currency and advanced virtual currency, which is conducive to conduct an objective analysis of the development and future of virtual currency.This article takes the Internet-based virtual currency as a study object to discuss its influences on micro economy. The discussion is based on the status-quo, which includes the problems in the development of the virtual currency on the current stage, and also looks to the future, which discusses prospects and related issues of virtual currency.The full text is divided into four parts, including six chapters. The first part introduces the purpose and significance of this article, and points out that the theoretical and practical value of the study. It clearly defines the concept of virtual currency, and distinguishes the two stages in the development of virtual currency. From several different points of view, it points out the distinction and relation between the virtual currency and the traditional currency, as well as between the virtual currency and the electronic currency. The nature of the virtual currency is summed up in this part. Through the study of domestic payment environment, the second part of this article finds out the primary reasons for the presence of the virtual currency. It introduces and analyzes domestic and foreign development of the virtual currency. The third part includes the chapter IV and V, which are the main part of this article. It discusses the microeconomic implication of the virtual currency from the viewpoint of the network economics. Adopting the "cost - income" method, it analyzes the influences of Internet-based virtual currency on micro-economy. The fourth part introduces the presence of virtual bank for the virtual currency, gives a brief summary of this article, and points out that the future of the virtual currency is reunification.Through the study of the network externality of the virtual currency, this article discusses the microeconomics'implications of virtual currency, and concludes that using virtual currency is a better solution to "network congestion". Because of the demand on information exchange and the impact of information interaction, information develops towards substantiation. Therefore, the virtual currency can not only promote the further development of electronic commerce in the economic field, but also serve as the foundation for the large-scale virtual economy entity in the field of the economic research, which can accomplish large-scale economic tests at lower cost. It can set up an ideal platform for academic research experiments.Applying the "cost - income" method to study the influences of virtual currencies on micro-economy, this article reaches the following conclusions: After paying relatively large fixed costs, the virtual currency issuers can benefit from economies of scale and the network effects in the long-term. The companies that accept the payment in elementary virtual currency can increase their selling opportunities which are brought by the size of the elementary virtual currency network, so that they could achieve the implementation of the micropayments and high-frequency transactions. The virtual currency can complete the payment system, improve the efficiency of the economy, and promote faster economic development.Based on the analysis in this article, the influences of the virtual currency on a country's micro-economy emerge gradually, but the intensity of the influences on growth varies from countries to countries. Because the elementary virtual currency is issued mainly by the non-financial institutions and enterprises, and the rapid development of the virtual currency is the emerging phenomenon in the last two years, it is very difficult to collect relevant data. Therefore, the article fails to provide empirical examinations with an econometric model to analyze the relationship between the issue of the elementary virtual currency and business operations.