Huobi's Zhu Jiawei said at the high-end forum: Blockchain is not omnipotent

Recently, the "Technology Promotes New Financial Reform" forum hosted by Tsinghua University PBC School of Finance and Tsinghua Finance Review was successfully held in Shanghai. Institutions such as Shanghai Institute of Finance and Law, Shanghai Trust, JD Supply Chain Finance Division, Huobi Blockchain Research Center, and Shanghai Gold Exchange attended the conference.

The conference focused on topics such as "robo-advisory and quantitative investment", "credit factory and supply chain finance", "blockchain and financial big data", etc. Huobi COO Zhu Jiawei, Deloitte Asia Pacific investment management industry partner Qin Yi, Tsinghua University associate researcher Zhang Wei, Shanghai Gold Exchange technical director Zhuang Xiao, and Xinyuan Group XiTou Company CEO Xu Jin were invited to participate in the "Blockchain and Financial Big Data" roundtable forum.

Huobi COO Zhu Jiawei spoke at the "Blockchain and Financial Big Data" roundtable forum

As the most mature application of blockchain, Bitcoin has been running stably for 8 years. The application prospects of blockchain can be seen from the development of Bitcoin. As the world's leading digital currency trading platform, Huobi's Blockchain Research Center is the earliest institution involved in blockchain research and application. In 2015, Huobi Blockchain Research Center cooperated with the Internet Finance Laboratory of Tsinghua University's PBC School of Finance to launch the "Digital Asset Research Project". In June this year, the research center published the first book in China that introduces blockchain in an easy-to-understand way, "Blockchain: Defining the Future and the New Economic Pattern", and in July released the "2014-2016 Global Bitcoin Development Research Report", which is the first research report in China that comprehensively introduces the current status of Bitcoin and blockchain development.

At this forum, Zhu Jiawei combined Huobi's many years of R&D and application experience in the blockchain field to discuss the current status and future of blockchain with the guests from the aspects of the relationship between blockchain and big data, blockchain security and application prospects. Facing the current blockchain boom, he believes that no technology is omnipotent, and the same is true for blockchain. He hopes that the industry can treat the development of blockchain rationally and avoid the emergence of blockchain bubbles.

Big data will have broader application prospects in the blockchain field

At the meeting, Zhu Jiawei expressed his thoughts on the topic of "blockchain and financial big data". He believes that blockchain and big data are two technologies in themselves, but the two technologies will play a certain role when combined. He believes that big data will have a broader application prospect in the field of blockchain.

Since its establishment, Huobi has used blockchain technology to build the world's leading digital currency trading platform, providing safe and reliable Bitcoin trading and storage services to 2 million users in more than 30 countries and regions around the world. It has broken the global daily trading volume record for seven consecutive times, with a cumulative trading volume of 1.3 trillion yuan, firmly occupying more than 60% of the global Bitcoin trading market.

"We analyze related transactions on the blockchain. Through these analyses, we can mark some special transactions and thus judge anti-fraud and anti-money laundering behaviors." Zhu Jiawei further pointed out, "Blockchain is an underlying technology that was born with Bitcoin, and all data is open to the outside world. It is different from big data applications in other fields, such as Google and Amazon, which analyze their own data and are closed. However, the public nature of blockchain makes data acquisition more convenient. Anyone who holds big data can get the data from the blockchain, associate it with their own business, and conduct big data analysis. Therefore, with the development of blockchain, big data technology will also expand from a small number of companies that own data to the general public and gain wider applications."

Bitcoin will be widely used in cross-border payments

Regarding the central bank's issuance of digital currency, Huobi COO Zhu Jiawei expressed his opinion: the digital currency issued by the central bank is different from Bitcoin. The central bank's issuance of digital currency can first reduce the probability of crime and second reduce the cost of supervision.

Regarding these functions, Zhu Jiawei further explained that after the central bank implements legal digital currency, it is possible to introduce another decree, such as: individuals who deposit more than 50,000 yuan must report it, otherwise it is illegal. With legal norms, money laundering, bribery, and bribery, which have always plagued the healthy development of digital currency, will be effectively solved, and the probability of using digital currency to commit crimes will be reduced. In terms of reducing regulatory costs, when digital currency is popular, we assume that the central bank has a large map for monitoring, and it can be clearly seen how much digital cash is in each place, and the number of issuances in each place can also be seen.

Unlike the digital currency issued by the central bank, Bitcoin was born with the spirit of geeks, dedicated to open and transparent mechanisms, with weak geographical restrictions and more obvious decentralized characteristics, so it will play its role in another field, that is, cross-border payments. Therefore, Zhu Jiawei believes that Bitcoin cannot become a legal currency. However, Bitcoin will have a cross-border circulation collateral, and everyone will use it.

The security issues of blockchain need to be considered in layers

In response to the blockchain security issue raised by the forum host, Zhu Jiawei combined Huobi.com's many years of application experience in the blockchain field and said: "People who work in technology know that all technologies have bugs, but it takes time to verify whether there will be problems." He pointed out that Bitcoin, which uses blockchain as the underlying technology, has been running stably for 8 years, and smart contracts have also been established on its basis. The security level of blockchain technology application involves transactions and accounts at the bottom layer. Smart contracts in the middle layer involve programming. Going up will involve the management of decentralized organizations, including network, supervision and other issues. Therefore, on the issue of blockchain, Zhu Jiawei believes that it should be considered in layers.

Blockchain is not a panacea

Since 2015, blockchain technology has been spreading like wildfire. According to Boston Consulting Group, the total financing in the financial technology field reached US$35 billion in 2015, of which the total financing of blockchain technology-related start-ups exceeded US$1 billion. In 2016, companies engaged in blockchain development and application emerged like mushrooms after rain, and the application fields expanded from finance to energy, transportation and even agriculture. Blockchain seems to be able to do everything, including electronic authentication, fairness, voting, liquidation, etc.

Regarding the hot phenomenon in the blockchain field, Zhu Jiawei showed Huobi's usual cautious attitude. He hoped that the industry could remain calm and said: "No technology is omnipotent, and the same is true for blockchain. I hope that the industry can treat the development of blockchain rationally and avoid the emergence of blockchain bubbles."

He predicted that blockchain technology will eventually be divided into several camps. One camp will identify and support the development of public chains, and the other camp may develop private chains. The development of public chains basically uses blockchain as a credit book. For example, when the central bank issues legal digital currency, it does not need to use blockchain to make credit books. Some credit reporting agencies do not need to use blockchain for credit books, because they already have good credit books. Using blockchain for credit books requires enhancing their credit book capabilities, so public chains will help everyone do this. However, private chains use blockchain more as an efficiency tool, such as some electronic certification, real-time clearing, etc.

At present, there are many companies in China that are engaged in blockchain. Blockchain is an underlying foundation with many characteristics, including decentralization, traceability, immutability, openness, transparency, and programmability. People use these characteristics to make different applications in various scenarios, some for digital currency, and some for data fairness, entering an era of flourishing. Huobi's Zhu Jiawei believes that blockchain will achieve rapid development with everyone's efforts.