Blockchain makes Alipay "unemployed"? Ant Financial doesn't think so

Will blockchain technology, which is seen as promising to revolutionize the payment field, really make Alipay "unemployed"? The latter obviously does not think so.

Ant Financial's Chief Technology Officer Cheng Li said in an interview with The Paper on July 31 during the "6th Shanghai New Finance Annual Conference and the 3rd Internet Finance Bund Summit" that the application of blockchain in the payment field has basically not been considered.

"At the moment, Alipay's technology has served users very well. Our global payment model is actually a very promising model. We don't feel that blockchain can directly create value for us now. If we don't see direct value, we won't use technology just for the sake of using it," said Cheng Li.

The so-called blockchain is a digital ledger that cannot be tampered with. In layman's terms, any record written into the blockchain cannot be tampered with, which facilitates public supervision and auditing. As a potentially transformative technology, some believe that in the next 20 years, the impact of blockchain and related technologies on the world will be as profound as the impact of the Internet in the past 20 years.

In the financial sector, blockchain supporters believe that blockchain has a disruptive impact on the payment industry: with blockchain, payments will be made directly between two parties without involving intermediaries such as banks and third-party payment institutions. Earlier, Soul Htite, co-founder of LendingClub, had clearly stated that blockchain makes payments between people free, so Alipay has no meaning to exist.

However, in the eyes of some financial practitioners, the ideal is beautiful, but the reality may be very bleak.

On the same occasion, Yang Kaisheng, former president of the Industrial and Commercial Bank of China, directly used numbers to remind everyone to avoid falling into the infectious craze for blockchain.

"Since payments through blockchain are made directly by both parties, skipping the necessary intermediate links in the past, efficiency will be greatly improved. However, we also need to note that to truly achieve this goal, the current level of blockchain technology needs to be improved by several orders of magnitude." Yang Kaisheng said: "For example, the narrow blockchain full network broadcast takes a long time and can only process single-digit transactions per second, while traditional financial institutions often have more than a few thousand transactions per second; the current largest blockchain Bitcoin network has an average daily transaction volume of more than 200,000 transactions, and there have even been cases where a transaction took more than ten hours to be confirmed, while a larger bank often has an average daily transaction volume of more than 100 million transactions."

Although the core payment field has not been considered for the time being, on July 31 this year, Ant Financial announced that it would apply blockchain technology to public welfare scenarios. In the past, the public could choose to donate, but they did not know exactly when the donation would be given to the recipient. When donating to public welfare projects supported by blockchain technology, after the project is completed, they can check the "love transfer record" to see the project donation situation and how the donations were allocated and distributed.

Since there is no plan to apply blockchain to the payment field, how does Ant Financial plan to use blockchain technology in the future?

"We will still focus on this point, that is, blockchain can increase trust. When we find that in a certain scenario, users need an extra layer of trust, such as some relatively new financial service scenarios, blockchain will come in handy. In addition, we are also exploring blockchain technology and cloud computing technology, and how to effectively combine the two so that they can be effectively implemented. At present, we have relatively thorough knowledge of the technology. At the same time, we also pay special attention to the security of the underlying blockchain, basic algorithms, and technological innovations on the basic platform, and make corresponding technical reserves." Cheng Li said.

Although blockchain technology has already been applied, Ant Financial emphasized that during the innovative implementation phase of blockchain, it will consider whether this technology can bring value under the existing regulatory framework.

"Ant Financial has never thought of using blockchain technology to research virtual currency," said Cheng Li.