In the blockchain field, who is manipulating capital? Where is it flowing?

1. Banking: From worry to embrace

Blockchain is a distributed accounting technology that is tamper-proof and solves the two biggest problems facing the financial industry: it reduces the cost of value exchange and the cost of credit.

This means that all intermediary institutions in the financial chain will face the fate of being "revolutionized".

In 2015, blockchain became the sector with the highest financing among US venture capital, exceeding US$1 billion.

What’s interesting is that the ones that invested the most are traditional banking institutions, such as giants like Morgan and Citigroup.

This is a defensive attack: rather than being revolutionized by others, it is better to revolutionize ourselves.

As the backbone of traditional financial institutions, banks have almost suffered a series of critical blows since the rise of FinTech.

With the rise of Alipay, users’ financial management and payment habits have been completely changed, and Jack Ma’s clamor for “forcing” banks to do the same has been heard everywhere.

Before the banks could catch their breath, blockchain came along.

Because blockchain reduces the cost of value exchange to zero, problems such as complex clearing, complex data storage, and high international payment costs between traditional banks may be solved.

Blockchain technology can also reduce the trust cost in the transaction process. Goldman Sachs predicts in a report that blockchain technology can save $15 billion to $20 billion in international payment business alone.

The banking industry was sweating and developing a response strategy: on the one hand, it established R3 CEV, a world-renowned banking blockchain organization. In other words, it launched a revolution from within;

On the one hand, they actively implemented research pilots and frequently invested in blockchain startups. In other words, they deployed reinforcements from the outside.

At present, more than 50 world-renowned banks and financial institutions have joined the R3 Alliance; and the distributed ledger test conducted by R3 this year is considered to be the largest real experiment of blockchain technology in the financial field.

The banking industry has frequently teamed up with blockchain startups, with a particular focus on projects exploring the application of blockchain in the payment field.

Goldman Sachs, Citigroup, and Mitsubishi UFJ Financial Group often appear in the financing of well-known blockchain startups such as Circle, DAH, and Coinbase.

While participating in the investment, banks also directly introduced blockchain payment technology. Japan's Mizuho Financial Group is about to test the payment solution provided by Ripple.

Other banks that are not members of R3 have also participated in the financing plans of blockchain startups. For example, Banco BBVA participated in Coinbase's Series C financing in the form of equity venture capital through its subsidiary.

Banking giants are trying to use their huge capital to take control of blockchain technology and transform this subversive revolution into a gentle and proactive change.

2. Traditional IT and emerging Internet companies: Embrace

Unlike banks, which have a slightly complicated attitude towards blockchain, traditional IT companies have opened their arms to blockchain technology and are ready to embrace it tightly.

This army is very likely to become the backbone of the future blockchain team, because they do not have the concerns of the banking system. At the same time, they already have some IT technicians, and on the other hand, they can find landing scenarios from themselves.

Take IBM as an example. In 2013, it praised Bitcoin as a "cloud asset with unlimited possibilities."

No company has been as enthusiastic about Bitcoin and blockchain as IBM.

Since last year, IBM has begun to establish blockchain innovation centers around the world, frequently showcasing the results of its blockchain research team in cloud, supply chain, identity authentication, and the Internet of Things.

In February this year, IBM joined hands with the Linux Foundation to establish Hyperledger, the top blockchain alliance in the technology field.

To put it bluntly, what IBM wants to build is an open blockchain technology platform, which is equivalent to an "Apple" or "Android" system, and developers can directly develop applications on this system.

Internet companies have great enthusiasm for blockchain technology.

In fact, whether it is blockchain technology, big data, or artificial intelligence, as long as it is a new technological trend, Internet companies will become its loyal believers.

Among these, there are predictions about the prospects of new technologies, as well as considerations of taking advantage of the trend to hype.

The measures they take can be divided into two types: building their own team and strategic investment.

Ant Financial, an Alibaba subsidiary, recently announced that it would use blockchain technology on the Alipay charity donation platform, drawing attention to the giant's blockchain layout.

Prior to this, Baidu also made a strategic investment in Circle, and Tencent and its subsidiary WeBank joined the Financial Blockchain Cooperation Alliance.

After becoming notorious in the P2P industry, most online lending platforms began to transform and de-P2P with the help of new technologies such as blockchain.

CreditEase, a long-established online lending platform, has made a strategic investment in Circle;

Dianrong.com CEO Su Haide said that in the next two years, Dianrong.com will spend $30-40 million on blockchain technology.

3. Special funds: relatively conservative

In addition to the above two types of players, investors have also begun to lean against the window, eagerly waiting.

A blockchain team that is currently raising funds revealed to a financial newspaper that they have talked to almost all investment institutions and found that investors know very little about this technology.

"We are doing investor education," the team leader revealed. In China, most investors don't understand yet and are still quietly waiting for the opportunity.

But those who understand are already moving forward at full speed.

Wanxiang Group, one of China's largest auto parts manufacturers, established China's first blockchain technology professional organization, Wanxiang Blockchain Lab, in September last year, and established a special investment blockchain fund totaling US$50 million.

The leader of Wanxiang Laboratory is Xiao Feng, vice chairman of Wanxiang Holding Group. He once revealed that currently, blockchain technology is led by the United States, and its application in some key industries, such as banking, securities, insurance, and especially the security industry, requires China's own technical researchers and practitioners.

At present, Wanxiang Group has invested in Ethereum and spent 500,000 US dollars to buy Ethereum. However, the current actions of Chinese capital are still relatively conservative. Wanxiang’s fund has not made any new moves except for officially investing in the blockchain vertical media "Blockchain Pencil".

It is generally believed that the first conference to popularize blockchain technology on a large scale in China was the first Global Blockchain Summit.

This is hosted by Wanxiang Blockchain Lab.

In addition to integrating resources, Wanxiang Lab will also do some blockchain education and popularization.

Xiao Feng and others are more like domestic blockchain technology evangelists than investors in blockchain startups.

At present, there are two branches in the flow of capital:

In the financial sector, banks are leading innovation, making arrangements in payment, clearing, and securities trading in an attempt to innovate from within.

The mainstream investment community is still relatively conservative about blockchain investment, and the investment areas are relatively marginal.

In China, for example, the teams that received investment are all in the fields of media, online mutual assistance, supply chain anti-counterfeiting, equity crowdfunding, etc., and are trying to revolutionize from the margins.