Avoid belittling and conceptualizing blockchain

About the author: Wang He, insurance scholar, executive vice president of PICC Property and Casualty Insurance Co., Ltd.

Blockchain also faces the problem of "what to do and what not to do". To avoid the "all-encompassing" mentality, we should not only focus on: what blockchain can do; but also be clearly aware of: the limitations of blockchain application process, especially the possible risks.

my country's financial industry attaches great importance to the application of blockchain technology. It has not only carried out fruitful research, actively participated in international organization activities, carried out a lot of training and popularization work, but also established specialized institutions in many enterprises to actively explore commercial applications. However, objectively speaking, it still faces difficulties in practical application. This situation is not only in China, but also at the international level, which also reflects the difficulty of applying blockchain technology from one aspect.

To this end, my country's financial industry must, on the one hand, forge ahead despite difficulties, and on the other hand, it must judge the situation, constantly strengthen its understanding, constantly summarize and improve, and on the basis of grasping the fundamentals, carry out work creatively and strive to achieve substantive breakthroughs.

(I) As far as the innovation of financial informatization, financial technology and Internet finance is concerned, blockchain is of great significance. It may become a "breakthrough" and "disruptive" core force after the Internet and big data, and become a key technology and tool to solve the "last mile" of financial innovation. Its significance is not only to comprehensively improve the efficiency of traditional finance and solve the risks that may be faced in the development of Internet finance, but also to reconstruct trust and breed a new business model, thereby giving birth to the era of "self-finance". At present, the financial industry, and even the whole society, still lacks understanding of this. Therefore, the financial industry, especially the field of financial technology, should attach great importance to it.

(II) As a new technology, blockchain, whether in terms of technology itself or in terms of technology application, involves the issue of "occupying a position" in the fields of standards, intellectual property rights, management organizations and development environment, that is, building a "first-come-first-served" advantage. Therefore, relevant management departments and enterprises in my country should have a sense of urgency and "grabbing a position" to avoid being passive in the future and falling into the embarrassment of having to "follow". As far as the financial industry is concerned, "electronic currency" involves the restructuring of the international economic and political landscape and interests, and may become the "symbol" of the international monetary system after gold and the US dollar. Its significance and urgency are "self-evident". However, applications in other commercial fields are equally important, and the space is huge and widely used. They should be highly valued and put into action as soon as possible.

(III) We must fully realize that blockchain is still a developing technology, or even just a "technical prototype". Therefore, we should attach importance to blockchain technology, but we must not deify it; we should have ideals, but we should not be idealistic; we should learn, but we also need to constantly explore, reflect and make breakthroughs. In particular, we should look at blockchain technology and the various problems that arise in its application with a dynamic perspective. We should avoid falling into the static thinking of "perfection", but constantly discover problems in the application, and creatively solve and improve them. At the same time, we should pay close attention to the forefront and trends of global blockchain technology development, especially the risks that may be faced, such as the recent "DAO incident", pay attention to the application of risk control technologies such as "sandbox simulation" in the application, pay attention to the practice and cases of real financial blockchain applications, and strengthen international exchanges and cooperation.

(IV) We must realize that blockchain is: the logical structure is very "full", but the reality of implementation is very "skinny". It is not easy to create a real blockchain application. The solution lies in: problem-oriented, that is, to discover and study the "pain points" of the industry from the perspective of blockchain, with credit, security and efficiency as the focus, analyze the integration and entry points with blockchain, and then "prescribe the right medicine" and innovatively propose solutions. At the same time, blockchain also faces the problem of "what to do and what not to do". We must avoid the "all-encompassing" mentality and not only pay attention to: what blockchain can do; but also clearly recognize: the limitations of blockchain application process, especially the risks that may be brought.

(V) The characteristics of blockchain determine its "uprightness", that is, social and systematic application environment requirements. Therefore, from the national and industry levels, we must attach great importance to and solve the problem of "neither reaching the sky nor the ground". From the industry and enterprise levels, in the early stages of application, we must establish the "finding the ceiling" thinking, that is, relatively independent local thinking, which may become the key to breakthrough and the solution. Blockchain technology applications should avoid "greed for big and foreign", especially in the early stages, we should focus on and choose relatively independent and small chains, fields and scenarios, so as to achieve "full process" application and ensure controllability and effectiveness. At the same time, from the essential demands of blockchain, the public chain is the ultimate goal, but the "alliance chain" may become a relatively rational choice in the initial stage, and "peers" and "industry chain" are the basic directions. In addition, the "supply side" should tend to the "alliance chain" idea, while the "demand side" can consider the "virtual public chain" model, that is, the "interface" management model, and at the same time, a virtualized "quasi-public chain" experience is formed on the client.

(VI) Like all technologies, the limitations of blockchain technology are inevitable and certain. Therefore, blockchain technology cannot and should not "fight alone". According to the needs of application scenarios, especially to solve the "pain points" of the industry, it should be closely connected and combined with related technologies, especially the Internet and big data, to form a pattern of "strengthening strengths and avoiding weaknesses", "learning from each other's strengths" and "complementing each other's advantages". In particular, it is necessary to be good at using other technologies to solve the "shortcomings" of blockchain technology, form technical complementarity and synergy, and achieve the best application effect.

(VII) We should pay attention to avoid "dwarfing" the blockchain, that is, we should not "confuse" it with general information technology such as security and encryption, and highlight the uniqueness of the blockchain, especially the uniqueness of the logical structure, which is the key feature and unique value of the blockchain, and the soul of the blockchain. Therefore, scenario selection and application design are very important, and we must not fall into the misunderstanding of "a panacea". The core is to combine the "pain points" of industry management with the uniqueness of the blockchain, and build solutions with the logic of blockchain technology. At the same time, in the application of blockchain technology, we must avoid the problem of "putting the wrong hat on the wrong head". Although solving problems is a hard truth, promoting the development of blockchain technology "on a case-by-case basis" is the fundamental appeal.

(VIII) The application of blockchain technology should pay more attention to application breakthroughs and pay special attention to avoiding the trend of "conceptualization". Blockchain is still a "new thing". On the one hand, it is important to "preach" and popularize it, form a consensus in society, especially in the entire financial industry, and attract attention and increase investment from all parties. On the other hand, it is more important to pay attention to the actual situation of the industry, discover problems through application, promote technological progress, and achieve substantial breakthroughs. In the application process, we must prevent "closed-door development" and avoid "sitting and talking". As far as my country's current financial industry is concerned, the key is to use business and technical perspectives to discover and design application scenarios, come up with real and convincing models and applications, substantially launch projects, achieve real and valuable results, accumulate experience, and win international discourse power.