Digital currencies are an eagerly awaited innovation in financial technology. Despite their relatively short history，they have garnered a great deal of attention and created much discussion.

They consist of two elements: digital technology and a currency attribute，and thus can be analyzed from both of these two aspects. Firstly，technological progress is an optimization of the financial system rather than a replacement of what we see today. Currency came into being with the emergence of exchanges of goods. It gradually evolved into exchanges of universal equivalents，from gold，silver，and copper to paper money and then electronic money. Digital currencies are the latest form of currency during its evolution from a substance of value to a symbol of value. During this process，the basic attributes of a currency as a measure of value，an instrument of settlement and a reserve of assets remain unchanged. But the operating efficiency and environment of the currency have been improved. There is faster transmission through the Internet，traceable uniqueness and enhanced security，among other benefits.

Digital technologies represent the transformation and application of digital principles (commonly manifested as mathematical formulas and deductions) in the physical world. This refers to artificial intelligence and digital communication，such as CDMA，while digital currency is a practice of mathematical logic cryptography in the financial field. From the professional perspective of cryptography，the foundation of this passcode is a sequence of numbers generated from one or several mathematical formulas. The solution of this sequence is non-repeating and infinite. Digital currency takes this sequence as the denominator and monetary transaction is as the numerator. When a transaction is executed and changes the numerator，the denominator changes along with it. As long as the solution of the denominator is non-repeating and infinite，the numerator can never grow as large as the denominator.

Based on this mathematical foundation，a system comes into existence. But it is worth noting that only a sovereign digital currency is backed by national credit. Without any wealth of service support behind them，digital currencies -- regardless of their name or concept -- are only digital cryptographic games. Thus，they do not have any practical circulation value. Blockchain takes digital technology as the medium and can only be defined as narrow digital form of money. We will consider it as broad money only when it gets linked to a sovereign currency，including sovereign digital currency.