Blockchain is popular all over the world. 19 related concept companies are listed on the A-share market

In the future, major events in the blockchain field will continue to emerge, such as government support policies, technological breakthroughs, deepening and expansion of practical applications, etc. Therefore, there will be great opportunities in the blockchain field in the future.

Bitcoin, which we are all familiar with, not only brings wealth stories, but also blockchain technology. At the beginning, Satoshi Nakamoto used blockchain technology only to support the development of Bitcoin. However, today, the popularity of blockchain far exceeds that of Bitcoin, and it can be said to be popular all over the world.

The charm of blockchain comes from its application in a wide range of fields such as stocks, land and property certificates, insurance certificates, etc., and it can improve the operational efficiency of these fields by improving security and transparency. In the face of blockchain technology, the ancient Byzantine Generals' Problem will not be a concern, and it will be difficult to forge bills. Therefore, some well-known domestic and foreign companies have entered the blockchain field, intending to occupy the commanding heights of the commercialization of blockchain technology, such as IBM, Ping An of China (601318, Stock Bar), Wanxiang Group, etc.

Nowadays, China's increasingly mature multi-level capital market has the strength to support the invention, growth and application of a new technology. In fact, well-known domestic VC/PE investment institutions such as LeTV Finance and Ant Financial are actively participating in blockchain equity investment. At the same time, the stock prices of listed companies in the secondary market have also risen with the development of blockchain. Feitian Chengxin (300386, Stock Bar), Yingshisheng (300377, Stock Bar), Haili Meida (002537, Stock Bar), Hengsheng Electronics (600570, Stock Bar) and others have moved because of the blockchain concept. It can be seen that in the capital market, keen investors have actively participated in the development of blockchain.

Therefore, in order to provide more help to investors in investing in blockchain, this article will study the development and application of blockchain, as well as potential risks, and introduce listed companies in the A-share market that involve blockchain.

What exactly is blockchain?

Blockchain, also known as distributed ledger or super ledger, is the underlying technology that supports the development of Bitcoin and has the potential to become the fifth disruptive innovation in the computing paradigm (the first four being mainframes, personal computers, the Internet, social networks, and mobile phones). Although there are many different definitions of blockchain, the essence remains the same. This article summarizes the definition of blockchain as follows: Blockchain is a decentralized, open and transparent transaction record ledger, whose database is shared by all network nodes, updated and supervised by all users, but no user can own, control or tamper with the database. At the same time, blockchain is composed of a chain of "storage blocks" on the network, and each block contains all the information exchange data in the network within a certain period of time. In addition, blockchain is a consensus protocol that follows a commonly recognized mechanism to conduct direct, point-to-point information exchange without the need for intermediate authority arbitration. Over time, this chain will continue to grow. (See Figure 1).

As a new technology, blockchain has its own characteristics and advantages, and these characteristics determine the functions of blockchain. As we all know, having unique functions is the premise for any technology to be applied in reality, so the characteristics of blockchain are crucial to the practical application of blockchain. Blockchain technology has the following characteristics:

1. Decentralization and collective maintenance. "Decentralization" means that the entire blockchain network has no centralized hardware or management organization, the rights and obligations between each node are equal, and the damage or loss of any node will not affect the operation of the entire system. "Collective maintenance" means that the data blocks in the blockchain are jointly maintained by all nodes with maintenance functions in the entire system, and anyone can participate in the maintenance of the nodes.

2. Trustlessness and permanence. Trustlessness means that there is no need for mutual trust between each node in the entire system to exchange data. The operating rules of the entire system are open and transparent, and all data content is also public. Therefore, within the scope of the rules and time range specified by the system, nodes cannot and cannot deceive other nodes. The so-called permanence means that the decentralized storage method has a strong disaster prevention ability. Even if the data of some nodes in the network is destroyed, backup data can be obtained from other nodes in the distributed network. As long as the Internet exists and someone is maintaining this ledger, this system can exist forever.

3. Database reliability and integrity. The blockchain uses a distributed database storage format, so that each node has a complete system database. In addition, only by controlling more than 51% of the nodes in the entire system at the same time can the data in the original database be changed. Otherwise, the modification of the database on a single node is invalid and cannot affect the data content of other nodes. In terms of integrity, in addition to the node establishing a transaction record, the blockchain will also have a record of all changes when the record occurs.

Broad application prospects

The vitality of new technology lies in its characteristics that existing technology does not have, that is, it can make up for the functional defects of existing technology. Blockchain has characteristics and functions that existing technology does not have. Its future application field is broad and its prospects are optimistic. Moreover, its application in some fields is subversive. The application of blockchain is divided into the following categories: general, financial transaction, public record, certificate, private record, proof, physical assets and intangible assets, etc. In addition, according to the different permissions of the application objects, blockchain can be divided into private chain, public chain and alliance chain. Nodes in the public chain network can be accessed at will, and the data read and write permissions in the network are not restricted. Anyone can participate in the consensus process, such as Bitcoin. Nodes in the private chain network are controlled by the organization, and the write permission is limited to the organization, and the read permission is limited to the outside, such as bank transactions and securities transactions. Some nodes in the alliance chain network can be accessed at will, while the other part must be authorized to access the blockchain, such as various blockchain alliances represented by R3 (see Table 1 for details).

Although the characteristics or functions of blockchain indicate that it has broad application prospects, people are still relatively vague about the actual application of blockchain. Next, we will introduce several cases that apply the characteristics of blockchain such as decentralization, trustlessness and transparency to reality.

1. Application of decentralization in the medical field. Currently, all medical records of patients are stored in hospitals, and patients cannot obtain their own medical records and medical history, which will have some impact on future medical treatment. The use of blockchain technology can store personal historical data, which is of great help to future health plans and medical treatment, and can protect privacy.

2. The application of blockchain transparency in the field of education assistance. If someone provides financial assistance to a child for schooling, the learning progress can be automatically confirmed through a smart contract. After the learning contract is met, the subsequent funds will be automatically triggered to be allocated to the next learning module. Point-to-point support is a positive incentive for both parties.

3. Blockchain trustless application in the field of academic certificates. Holbertson School, a California software skills program, announced that they will use blockchain technology to authenticate academic certificates. If all universities join the blockchain authentication of academic certificates and transcripts, corruption in the academic community will be reduced, and the time and cost of manual inspection will be saved.

Blockchain is favored by all parties

Management's attitude is warm. Before new technologies or new inventions are mature, management generally takes a conservative attitude, just as some countries have listed Bitcoin as an illegal currency. However, although the development of blockchain technology is in its infancy, the attitudes of various countries are relatively positive. The reason is that the application of blockchain will have a relatively positive effect on related fields. From the official statement, although the Chinese government has listed Bitcoin as an illegal currency, it seems to be relatively positive about blockchain technology. The central bank has made digital currency, which is closely related to blockchain technology, one of the central bank's key development projects, and the Ministry of Industry and Information Technology has filed the "White Paper on Blockchain Development Plan", which means that the development of blockchain will be promoted at the national level.

Blockchain organizations are emerging at home and abroad. The international blockchain organization R3 is composed of more than 40 institutions in the banking and insurance industries, including Ping An of China and Hong Kong AIA. On July 1, 2016, Russia established its first blockchain alliance, whose members include banks and consulting companies. Domestic organizations are also being established. On February 3, 2016, the Zhongguancun (000931, Stock Bar) Blockchain Industry Alliance, the world's first blockchain industry alliance focusing on cyberspace infrastructure innovation, was established in Beijing; on April 19, 2016, 11 institutions jointly initiated the China Distributed Ledger Basic Protocol Alliance, and the alliance secretariat was located in the Wanxiang Blockchain Laboratory under Wanxiang Group; on May 31, 2016, the Financial Blockchain Cooperation Alliance (Shenzhen) initiated by 25 units was officially established, and the alliance has formulated 12 research project plans to make blockchain from virtual to real, of which 10 projects are undertaken by four listed companies.

Venture capital has grown by leaps and bounds. According to statistics, from 2012 to 2015, the venture capital attracted by the blockchain field increased by more than 200 times, from 2 million US dollars in 2012 to 469 million US dollars in 2015, and the cumulative investment has reached about 1 billion US dollars. The management of various countries has a positive attitude towards blockchain technology, which has led to explosive growth in blockchain investment since 2012. The increase in venture capital reflects the foresight of the capital market and demonstrates the recognition of capital for blockchain technology. Coupled with the continuous influx of talents, it will promote the advancement of blockchain technology and enrich the application of blockchain.

There are many venture capital institutions involved in blockchain. According to CoinDesk's Bitcoin venture capital data, nearly 200 venture capital companies have invested in startups in the Bitcoin and blockchain fields. These startups are mainly concentrated in the fields of smart contracts, securities trading settlement, identity verification, distributed accounting, e-commerce, data API and blockchain infrastructure.

In addition, venture capital in blockchain is mainly concentrated in Silicon Valley. According to statistics, as of now, the total amount of venture capital in Silicon Valley companies in the United States accounts for 51% of the total amount of blockchain venture capital in the world so far; the number of companies engaged in blockchain-related businesses in Silicon Valley in the United States is 39, accounting for 28% of the global total. Although China's current attention to blockchain technology has begun to sprout, it is still at an earlier stage than Silicon Valley in terms of both technical environment and capital environment, and the road ahead is long.

In addition to venture capital and the government, well-known companies have entered the blockchain field, and blockchain entrepreneurship is in full swing at home and abroad. There are more than 400 blockchain technology startups in the world, and their entrepreneurial fields are diverse. From the perspective of the completeness of the industrial chain, the ecosystem around blockchain technology is rich and complete around the world.

The Australian Stock Exchange is considering using blockchain to replace the clearing and settlement system; Hyperledger is an open source project initiated by the Linux Foundation in 2015 to promote blockchain digital technology and transaction verification. Its members include more than a dozen different interest groups such as ABN AMRO and Accenture; on December 30, 2015, Nasdaq completed its first securities transaction through a blockchain platform; on January 20, 2016, the blockchain consortium R3 CEV released its first distributed ledger experiment, using Ethereum and Microsoft Azure's Blockchain as a Service (BaaS).

Some domestic institutions have also begun to apply blockchain technology. In April 2016, Shenyang Jinxin Commodity Exchange Center and Taiyi Technology launched the world's first blockchain-based commodity trading center; on July 9, 2016, Sunshine Insurance launched the first blockchain insurance card in China, where a single 3 yuan can enjoy a 2 million yuan aviation accident insurance project. In addition, the domestic On chain company launched the Xiaoyi system for the registration and transfer of equity of non-listed companies; Tencent and Huawei also joined the Financial Blockchain Alliance.

In short, blockchain is a new technology that has functions that existing mature technologies do not have, such as decentralization and trustlessness. It has strong vitality and can bring security and transparency to the existing operating model, thereby improving the existing operating efficiency. A large number of venture capital institutions and entrepreneurs flocked to this huge cake, resulting in the emergence of various blockchain organizations, and blockchain technology is popular all over the world.

Blockchain has obvious advantages and powerful functions, which accelerates the government's positive attitude, and the primary market, well-known enterprises and various organizations are developing like mushrooms after rain. At this time, how will the secondary market perform? There is no doubt that the capital market always reflects reality in advance. Although the actual application of blockchain and even the maturity of technology still have a long way to go, the secondary market will fluctuate with major events such as the development and actual application of blockchain technology. Moreover, major events in the blockchain field will continue to emerge in the future, such as government support policies, technological breakthroughs, and the deepening and expansion of actual applications. Therefore, there will be great opportunities in the blockchain field in the future.

At present, according to statistics, there are 19 blockchain listed companies in the A-share market, and these companies have the following characteristics: mainly computer or financial services related companies; mainly extensions of existing businesses; blockchain businesses do not contribute actual profits, but are mainly involved or potentially involved. Therefore, the current performance of the blockchain secondary market will be dominated by concept speculation. Since blockchain originated from the underlying technology of the digital currency Bitcoin, the mainstream view is that the field where blockchain applications are most likely to break through first is the financial field.

The process of development and application of a new technology is bound to be tortuous, and the development and application of blockchain technology is no exception. The problems that blockchain development may encounter can be summarized into the following three points: First, human resistance, that is, resistance from vested interests and resistance from conceptual recognition. Second, economic cost resistance. Although blockchain technology can save costs in related industries, it has higher requirements for node computers and the replacement cost of existing equipment. Third, resistance to technological development. Mainly from resistance to technical compatibility, risk resistance to breaking through 51% of nodes, resistance to privacy protection, etc.