Wanxiang Group, the first company to acquire a US company, is betting on blockchain this time

Who knew that Zhejiang Wanxiang was one of the earliest large-scale enterprises to invest in blockchain? In the blockchain era, will there be another Zhejiang business legend?

Wanxiang Group, which acquired a US company earlier than Jack Ma and has a market value of 100 billion yuan, is betting on blockchain this time.

Xiao Feng, Vice Chairman and Executive Director of Wanxiang Holdings

Entering the new economic era represented by the Internet, many people are not familiar with the name of Wanxiang Group. However, this private enterprise, founded in 1969 and started as a small workshop producing agricultural machinery, is the first OEM manufacturer in China to provide parts for General Motors of the United States, and is also one of the earliest Chinese private enterprises to acquire American companies. In the 2015 Hurun Rich List, the family of Wanxiang founder Lu Guanqiu ranked 10th with a wealth of 65 billion.

What is even more unimaginable is that this private enterprise, which started out as a machinery manufacturer and later entered the agricultural sector with an annual revenue of over 100 billion yuan, is actually one of the earliest large enterprises in China to pay attention to and deploy blockchain technology. According to Xiao Feng, vice chairman and executive director of Wanxiang Holdings, Wanxiang began to pay attention to digital currencies represented by Bitcoin in 2014, and then followed up with the underlying technology of Bitcoin, blockchain. Xiao Feng believes that compared with Internet finance, financial technology represented by blockchain is the real disruptor of the times.

Wanxiang's third layout

Among the top 500 Zhejiang businessmen in 2016 selected by Zhejiang Businessmen magazine, five companies including Wuchuang Zhongda, Geely Holding, Hailing Group, Wanxiang Group and Alibaba all had revenue of more than 100 billion yuan in the previous year. This is the first time that Alibaba has entered the 100 billion club, while Wanxiang Group has been in the club since 2012.

Wanxiang Group started out as a manufacturer of auto parts, and later made strategic investments in agriculture. It can be said that it has been losing money for ten years, and has only recently started to make a profit. Finance is a new area that Wanxiang Group has invested in in recent years. Wanxiang Holdings, where Xiao Feng works, is Wanxiang's financial investment platform. Wanxiang Holdings invested 120 million yuan in Minsheng Life Insurance in 2002, and in 2004 it invested in Zheshang Bank. It has currently obtained financial industry licenses such as banking, insurance, funds, trusts, and futures. If it obtains a securities license, it will achieve a full financial license layout.

Xiao Feng joined Wanxiang Holdings in 2011 and was ready to invest in the new financial sector. In 2012, Wanxiang Holdings invested in cloud computing and machine learning companies and began to lay out in the new financial sector. Although Internet finance represented by P2P and crowdfunding was very popular in 2013 and 2014, Xiao Feng was more willing to invest in real financial technology projects and thus began to pay attention to blockchain.

In September 2015, Wanxiang Holdings established a blockchain laboratory. Its founders include Ethereum founder Vitalik and Bitshares founder Shen Bo. Vitalik serves as the chief scientist of Wanxiang Blockchain Laboratory. In October 2015, Wanxiang Blockchain Laboratory held the first Global Blockchain Summit in Shanghai. In October of the same year, it launched the "Wanxiang Blockchain Laboratory Series", and has published three books including "Blockchain Society". In April 2016, Wanxiang Blockchain Laboratory and 11 other domestic companies established the China Distributed Ledger Foundation Protocol Alliance (ChinaLedger).

In order to promote the development of blockchain technology, Wanxiang Blockchain Lab launched a global excellent blockchain project funding program called "BlockGrant X" in November 2015, with an annual amount of about US$300,000, to support basic research on blockchain technology such as encryption algorithms, consensus mechanisms, and transaction performance improvements. In order to cultivate blockchain-related talents, Wanxiang Blockchain Lab also launched blockchain training courses and co-organized the Shanghai Blockchain Hackathon with Deloitte, with a total prize of up to US$100,000.

The most important thing is Wanxiang Holdings' investment in blockchain startups. As of the first half of August 2016, Wanxiang Holdings has invested in 29 blockchain startups around the world, totaling $25 million. Although the investment amount for each company is not large, ranging from $200,000 to $1 million, this gives Wanxiang Holdings a good opportunity to connect to the global blockchain ecosystem. "As we watch them grow, we are also studying and looking for the future strategic direction."

In September 2016, Wanxiang Blockchain Lab will hold the second Global Blockchain Summit, which will be expanded to 700 people this time, and it took half a year to invite global mainstream blockchain industry practitioners to join. In August, Wanxiang Blockchain Lab held a series of exchange activities for the new book "Blockchain Society". Xiao Feng attended every stop to explain the importance of blockchain to the audience and the media. Gong Ming, the author of "Blockchain Society" and the founder of Blockchain Pencil, also appeared in the Beijing station exchange activities and introduced the essence of the 258 industry cases included in the book.

Xiao Feng said at the exchange event in Beijing that many people are worried that the blockchain industry is overheated and has created a bubble, but in fact, the bubble can drive the industry forward at full speed and gain unprecedented attention, thereby substantially promoting the popularization of blockchain concepts and multi-scenario applications. "Only after the bubble can a group of valuable companies and practitioners remain. From this perspective, blockchain needs a bigger bubble."

Using new technology genes to fight against Internet companies

Xiao Feng said that the most important purpose of investing in financial technologies such as blockchain is to track the development of new technologies and then use mature technologies to transform Wanxiang's existing financial businesses, including insurance, trust, third-party payment, banking, funds, financial leasing, futures, etc. Wanxiang hopes to use financial technology as a new technology gene to counter the invasion of Internet finance.

"Internet finance is a scenario revolution, but blockchain is not a scenario revolution, it is a technology revolution." Xiao Feng believes that financial technology represented by blockchain will become the terminator of Internet finance, and the representatives of Internet finance include Alibaba and Tencent.

In the era of Internet finance, traditional banking has been beaten by Internet companies. The reason is simple, that is, Internet companies have business scenarios, and among the three BAT companies, Alibaba's scenario is the most mature. Alibaba is an e-commerce company. After users choose a product, the first action is to pay, which is a very strongly related business scenario. Tencent, as a social platform, originally had little relevance to the payment scenario, but the subsequent red envelope scenario created the glory of Tencent WeChat Pay. This is the revolution brought by the scenario.

Traditional financial institutions are inherently lacking in Internet scenarios, so they can do nothing even if they watch Internet companies snatching people, territory, and business. Fintech is different. Fintech, which is centered on big data, includes two core technologies: artificial intelligence and blockchain. Blockchain is a new way of accounting that will create a new transaction model. Artificial intelligence and blockchain are not directly related to Internet scenarios, and are opportunities for traditional financial companies to surpass Internet companies.

"We can see that the top 50 financial institutions in the United States have now established blockchain-related laboratories, and Wall Street has invested in blockchain startups. The shareholders behind well-known blockchain startups are either Goldman Sachs or Morgan Stanley." Xiao Feng said that now Internet companies are poaching people from traditional financial institutions in large numbers because they need talents who understand the logic of financial business.

At the same time, although Gong Ming believes that blockchain will subvert and deconstruct traditional financial institutions and bring profound changes to the financial industry, he also includes a large number of cases from non-financial industries in the book "Blockchain". This also confirms that the essence of blockchain is a mathematical solution for building a trust mechanism for all parties in a transaction. Bitcoin is only the first successful application of blockchain technology in the world, but this does not mean that blockchain is only applicable to the financial industry. In a nutshell, blockchain gives traditional enterprises a chance to turn things around.

Taking the next generation of storage as an example, MaidSafe is a British startup company. The company's entrepreneurial project is to use blockchain technology to connect all idle hard disk resources in the network to form a huge virtual data center, and then use this idle computing resource for cloud storage services. In this way, public cloud service providers such as AWS and Rackspace will no longer be needed, because there is no upfront cost for development on the MaidSafe network. MaidSafe is the world's first self-operated network that does not require servers and supports self-certification.

On August 16, Chinese blockchain startup Onchain, online electronic contract signing and hosting SaaS service platform FaDaDa, and Microsoft jointly announced the establishment of the first large-scale commercial electronic evidence blockchain alliance "FaChain". That is, after the electronic contract digital fingerprint information such as the signing time, signing entity, file hash value, etc. is broadcast to all member nodes of "FaChain", all information, once stored, cannot be tampered with by any party, thus meeting the requirements of judicial evidence storage of electronic evidence.

In the future, domestic users can edit electronic documents through Office 365 operated by 21Vianet, and then enter the relevant operation interface of FaDaDa to complete the signing and sending of contracts; with the support of Onchain blockchain technology, the digital fingerprint information of each electronic contract will be broadcast to the storage nodes of all members of "FaChain", and the file hash value information will be synchronously stored in the National Authoritative Electronic Data Forensic Identification Center.

Professor Han Feng, a mentor at Tsinghua University's makerspace i-center, believes that blockchain technology is the core technology that has the greatest potential to trigger the fifth wave of disruptive technological revolution after steam engines, electricity, information and Internet technology. Born from Internet finance, is blockchain likely to be the terminator of Internet finance? Is it even possible to end the current generation of Internet business models such as AWS and Uber?

Kevin Kelly said in "Out of Control", "To grow into a new species, you must experience all the roles you will no longer play." Today's blockchain technology may be going through this process.