Can blockchain open a new door to the digital economy era?

From November 2 to 4, the 14th Shenzhen International Financial Expo was held in Hall 1 of the Shenzhen Convention and Exhibition Center. In the financial technology exhibition area, a number of innovative projects based on the application of blockchain technology, such as digital currency wallets and pet ecological blockchain, were unveiled.

After the chaotic period of the industry, the ICO (initial public offering of digital currency) bubble burst, and the blockchain industry accelerated its exit, the industry application and innovation of blockchain technology are accelerating. Yu Jianing, rotating chairman of the blockchain committee of the China Communications Industry Association and president of Huobi University, predicted that the popularization and application of blockchain will bring about a series of changes, and new finance, new business, and new organizations are about to emerge. In the future, blockchain will be as ubiquitous as alternating current, tap water, and the Internet.

However, predictions cannot bring all the answers, and there are still industry insiders who believe that blockchain has not yet found its value. Xiang Lipeng, head of the blockchain innovation team of the Fifth Institute of Electronics of the Ministry of Industry and Information Technology, pointed out that blockchain cannot find core blockbuster products at present, and it can neither reduce costs and increase efficiency in a short period of time, nor bring good social benefits. This is also a topic that the current industry has to think deeply about after going from doubt to enthusiasm, and from enthusiasm to rationality.

Illustration of the Big Data Wisdom Tree drawn by Xiang Lipeng, head of the blockchain innovation team of the Fifth Institute of Electronics of the Ministry of Industry and Information Technology

The blockchain world

Some people bet on a 10-year career, while others worry about not being able to keep up with industry development.

Three years ago, Yuan Yuming was a TMT researcher in the securities industry and had been on the New Fortune Best Analyst list for five consecutive years. In 2018, he turned to the blockchain industry, bidding farewell to his nine-year career as a researcher, and became the CEO of Huobi China in September of the same year. In Yuan Yuming's words, this choice is a gamble on his career for the next ten years.

In the past three years, Yuan Yuming has seen the rapid development of the blockchain industry. "Whether it is policy support, public popularity, technical maturity, application practice experience, etc., there has been great development." In his view, the evolution of blockchain will not be a simple repetition of the Internet, but will learn lessons from the history of the Internet and move much faster. He does not want to lose on the word "wait". If he waits until the industry matures before entering the market, it may be too late.

Like Yuan Yuming, many people are rushing into the market. In September this year, Wang Zhiyong resigned from the Zhengda Group and subsequently joined TokenPocket Wallet (Shenzhen Tuoke Technology Co., Ltd.) as the company's business director. Sitting in the exhibition area, he told Nandu reporters: "Blockchain is the trend of the future, and those who participate early will reap huge dividends." Wang Zhiyong is one of the early players of Bitcoin. From speculating in coins to investing in the blockchain industry, Wang Zhiyong implicitly revealed that his wealth has increased by hundreds of times. Today, as the external environment is getting better and better, he is more determined to be optimistic: "The blockchain industry is changing with each passing day. Every day, you can see application development teams from all over the world contributing their strength to the development of the blockchain industry. A recognized saying in the circle is that one day in the blockchain circle is one year in the human world. If I don't change my career and participate full-time, I can't keep up at all."

How popular is the blockchain industry? Data from Tianyancha shows that as of November 5, there are 5,455 companies in Shenzhen whose business scope includes "blockchain and digital currency". In recent years, blockchain technology has also made new breakthroughs: distributed storage, DeFi (Decentralized Finance), NFT (Non-Fungible Token), cross-chain ecology and many other technologies have made new progress.

Is blockchain on the eve of an explosion? In Yuan Yuming's view, the current development stage is similar to that of the Internet from 2002 to 2005, and the turning point may come in the next three to five years.

"No one can really predict the long-term trend." Xiang Lipeng told Nandu reporters that he and his team are writing a research report on blockchain for government departments. "I have mentioned many times before from the perspective of the development cycle of information technology that the blockchain industry will have a round of application explosion in 2025. But whether it will really happen is really hard to say."

Value Internet

The main battlefield for innovation and entrepreneurship has shifted from "Internet +" to "Blockchain +".

There is a saying that blockchain is the "cornerstone of the value Internet". Yu Jianing said that the distributed storage system of blockchain technology maximizes the value of data, forms a new business model, and explores a wider and more diverse value transfer, which is one of the greatest benefits brought to people in the era of value Internet. In addition, in the field of blockchain, DeFi fundamentally changes the source of trust, reduces counterparty risks in financial transactions, and brings about changes in the financial field. NFT expands the field of digital wealth through the model of asset chain.

Yu Jianing believes that the early irrational hype is gradually fading, and DeFi is entering a long-term development stage, which will trigger a deeper and long-term industrial transformation. The dawn of the blockchain 3.0 era represented by industrial blockchain and DeFi has emerged. This will be an era in which blockchain technology innovation and model innovation will reconstruct the industry. He said that any industry is worth redoing with blockchain, and the main battlefield of innovation and entrepreneurship has shifted from "Internet +" to "blockchain +".

According to industry insiders, in 2021, it is an inevitable trend for data assets to be put on the chain, and within three years, massive data assets will be put on the chain for circulation. Blockchain combines cutting-edge cryptographic technologies such as verifiable computing, privacy computing, and multi-party secure computing to enable orderly sharing and value distribution of data on the chain, build a data factor market, and maximize data value, which is of great significance to the development of the digital economy.

In terms of business organization forms, blockchain will also drive the transformation of the corporate system to a community system, alliance system, and ecological system. The core organizational goal will also shift from "maximizing corporate value" to "maximizing ecological value," achieving "co-construction, co-governance, symbiosis, and win-win," allowing the contribution of each participant to be quantified and reasonable distribution of contributions to be achieved, allowing the organizational boundaries to be rapidly extended.

How to find the coordinates of blockchain technology in the digital economy era? Xiang Lipeng drew a diagram of the big data wisdom tree. In the diagram, he regarded blockchain technology as nerve fibers connecting the roots, trunks, branches and leaves. The roots are big data systems, the trunks are artificial intelligence and cloud computing, and the branches and leaves represent the wide range of commercial, government and civilian applications of big data.

Industry Observation

Shenzhen is becoming a blockchain "innovation highland".

As the frontier of my country's reform and opening up, Shenzhen is becoming an "innovation highland" for the development of my country's blockchain. From the launch of blockchain electronic invoices, to the launch of the central bank's trade finance blockchain platform, to the pilot of digital RMB... a series of actions are also heading in the direction of "pioneer demonstration". In the view of Zheng Dingxiang, president of the Shenzhen Information Service Industry Blockchain Association, the development of Shenzhen's blockchain industry has the right time, right place, and right people.

Yao Huiya, executive deputy secretary-general of the Shenzhen Financial Blockchain Development Promotion Association, also said that Shenzhen has a historic construction opportunity of "dual-zone drive" and has a series of unique advantages, which has given Shenzhen's blockchain industry a boost. In the wave of industrial development and change, blockchain is expected to integrate with the real economy to a deeper degree and a wider range, promote the digitalization of the real economy, and in turn further promote the development and growth of the blockchain industry.

Zheng Dingxiang told Nandu reporters that in recent years, Shenzhen's ICT (information and communication technology) giants have stepped up their efforts to develop the blockchain industry, and blockchain has gradually become the underlying foundation of the digital service platforms of ICT giants. For example, Huawei Cloud Blockchain Service Platform BCS, Tencent Blockchain Trust SQL, as well as Kingdee, WeBank, Ping An, etc. have gradually adopted blockchain technology to build the underlying architecture of the service platform.

In 2016, Shenzhen Financial Blockchain Development Promotion Association (abbreviated as "Golden Chain Alliance") was established. So far, it has included more than 150 member units in six major industries such as banks, securities, funds, insurance, local equity exchanges, and technology companies, becoming the largest blockchain organization in China and one of the most internationally influential blockchain alliances. Yao Huiya, executive vice secretary-general of the Golden Chain Alliance, told Nandu reporters that Shenzhen's blockchain companies have made continuous progress in technology and have formed a leading advantage in China. According to him, institutions such as WeBank, Tencent, Huawei, Shenzhou Information and Ernst & Young Huaming have developed the financial-grade blockchain underlying open source platform FISCO BCOS. After more than 20 version iterations, it has become the leading open source alliance chain underlying platform in China and has been selected into the blockchain service network BSN designed by the National Information Center, becoming the first domestic blockchain underlying framework introduced by BSN. In Shenzhen, based on the FISCO BCOS platform, the blockchain industry has accelerated its landing speed and the landing scenarios have become more and more abundant. It has supported the research and development of hundreds of application projects in many fields such as government affairs, copyright, smart cities, justice, finance, supply chain, and social governance.

From industrial alliances to open source platforms, Shenzhen has built an ecological system for the industry applications of blockchain.

In the process of industry development, standard setting is crucial. Yao Huiya observed that more and more Shenzhen companies have appeared among the relevant standard setters at home and abroad. Member institutions of the Golden Chain Alliance, such as WeBank, Shenzhen Securities Information Technology Co., Ltd., and Tencent, have initiated and participated in a large number of blockchain standard setting work, such as the "Blockchain Technology Financial Application Evaluation Rules" and "Financial Distributed Ledger Technology Security Specifications" issued by the central bank, as well as the national standard "Blockchain Reference Architecture" to be released soon.

In addition, Yao Huiya said that blockchain can play a unique role in data factor governance technology in cross-border scenarios, help the healthy development of cross-border finance and trade, and promote the interconnection of financial markets and financial infrastructure in the Greater Bay Area. Shenzhen has a rich cross-border scenario, and blockchain will have greater room for development.

Fan Ruibin, deputy general manager of WeBank's distributed business technology development department and head of blockchain, told Nandu reporters that unlike the industry's stage of "researching blockchain technology and exploring application scenarios" in the past few years, since this year, under the wave of "new infrastructure", blockchain has ushered in a broader historical development opportunity.

"Only when blockchain is truly integrated with industrial scenarios can its intrinsic value be demonstrated." Yu Jianing believes that the important factor that determines the future prospects of blockchain is the degree to which it is integrated with the real economy. At present, the application scenarios of blockchain technology are still mainly limited to the financial field. He also pointed out that the blockchain industry still has problems such as speculation, fraud, and market manipulation. The industry development faces difficulties, including how to truly promote the development of the real economy, how to integrate with existing technologies, how to ensure project security, and how to match policy supervision requirements.