Scholar: If blockchain technology is applied to charity, it may prevent the Guo Meimei incident

Scholar: If blockchain technology is applied to charity, it may prevent the Guo Meimei incident from happening again

While many people have only a vague understanding of the concept of blockchain, governments and companies have quietly set their sights on this potentially transformative technology. Earlier this year, a white paper published by the Office of the Chief Scientific Advisor to the British government revealed that blockchain has been included in the UK's national strategic deployment and will be promoted and applied in areas such as finance and energy. According to a report released by UBS at the end of June, a number of established Western startups have also set their sights on China and will soon expand their business to China. In China, although most of the venture capital interested in blockchain technology has flowed to international companies, China's local blockchain startups are also emerging. In addition, a non-profit organization focusing on the research and development of blockchain applications, the China Distributed Ledger Foundation Protocol Alliance (China Ledger Alliance), is being established. The core of blockchain technology is the distributed ledger. So, what fields can this technology be applied to? How many years will it take for large-scale applications? Recently, a reporter from China Business News interviewed Cai Weide, a professor of the Thousand Talents Program at Beijing University of Aeronautics and Astronautics, on these issues. He said that the application prospects of blockchain are very broad, covering various fields such as insurance, taxation, and charity, and notarization may be the first field where it can be applied.

First Financial Daily: In what fields can blockchain be applied? Cai Wei-de: Blockchain technology can be understood as a distributed accounting method that can record all transaction information and make it impossible to tamper with the records. The main advantages of blockchain are efficient and transparent processes with low costs and highly secure data. The inherent advantages of blockchain also determine that blockchain is needed wherever fairness, equity and honesty are required, including insurance, stocks, transportation, education and pension. For example, in insurance, both the insured and the insurance company need to have public information. The insured needs to know that the insurance company is real, and the insurance company also needs to know that the insured is real. Both parties need to confirm each other's identity and relevant information. The insurance industry is also prone to a lot of fraud. For example, some insurance company executives may take the money away and run away, so the insured should pay attention to the financial situation of the insurance company. Similarly, the insured may also defraud the insurance company to earn the insurance compensation amount. For example, if someone dies in a car accident, his family may claim n times from the insurance company. If insurance companies are connected and use blockchain to ensure that this information is true, then such fraud will be almost impossible. In the future, there will be different blockchains, and each industry may have its own blockchain version with different security standards. For example, some industries require higher security, so they will have more accounting nodes.

First Financial Daily: What other fields can blockchain be applied in? Cai Wei-de: For example, in the field of charity, if all donations are tracked through blockchain, then everyone can know where the money they donated is used. Is it spent where it should be spent, or is it spent carelessly by those public welfare organizations? When public welfare organizations have such a mechanism that can gain the trust of the outside world, people will donate a lot of money, and the Red Cross will not repeat the crisis of losing public trust due to the Guo Meimei incident. In terms of taxation, the government can also stipulate that banks must put all interest income on the blockchain, and the stock trading income of shareholders must also be put on the blockchain, so that the interest of banks and the stock trading income of shareholders cannot evade taxes. Moreover, with the blockchain, government employees cannot change the data, which can not only ensure that the taxes that should be collected are received, but also protect the rights of the people and avoid many disputes. For example, a friend of mine once went to the US Internal Revenue Service to submit a lot of information, but the IRS lost the information and said that it did not receive the information and continued to ask him for it. Both parties spent a lot of energy on this matter. If there is a blockchain, such disputes and disputes will be reduced a lot.

First Financial Daily: In which field might this technology be first implemented? Cai Wei-de: Notarization may be the first field of application, because it is very simple to operate. You only need to create a blockchain and then encourage people to put information in the blockchain system. The blockchain can prove the storage time of information and the authenticity of the stored information. People are also willing to put some information in the blockchain. For example, students can submit their reports to the blockchain, so as to prevent the tutor who has a bad relationship with them from retaliating and lying that he did not receive his report. The incidence of such things is not high, but it is unlucky enough to encounter it once. A friend of mine encountered a similar thing before. His transcript was changed three times by the teacher of the American school. Later, I heard that he wanted to sue the local Supreme Court, and the school gave up. For example, if you use the blockchain to get married, one party can check the other party's information through the blockchain in advance, and this information has not been changed, so that bigamy can be avoided. At present, the application of blockchain is more talked about in the financial field, but this field is still in the exploration and experimental stage, and the actual application will take at least three or four years. Not so fast, but it may be faster than we think. As far as I know, there are already more than a dozen Chinese banks willing to experiment with blockchain.

Yicai Global: What measures have been taken in the financial sector to promote the development of blockchain? Cai Wei-de: On June 16, 2016, Mark Carney, Governor of the Bank of England, said that blockchain and financial technology will have a significant impact on British finance and currency, and monetary policy and system will change. He also said that he would adopt blockchain in its real-time payment and settlement system (RTGS) to simplify the clearing and settlement process and reduce costs. He also mentioned that there are still many technical difficulties to overcome, and the Bank of England will set up an accelerator to work with financial technology companies to solve these problems. The Bank of England will also establish a financial regulatory framework based on blockchain. Although the above goals of the Bank of England will not be achieved immediately, it means that the Bank of England will apply blockchain to its core business. This decision is very surprising because it will drive many other commercial banks.

Yicai: If the blockchain, a revolutionary technology, is used, what impact will it have on the existing system? Cai Wei-de: In various application areas, blockchain must be well connected with the existing system, but because the existing process may be greatly impacted, it looks more like a subversion. For example, some people believe that after the use of blockchain, the banking system will be greatly simplified, so that many bank employees may no longer be needed. The president of Barclays Bank in the UK said that if blockchain is used, the number of bank employees can be reduced by half. But whether this is the case remains to be proven. It is very likely that the number of staff in traditional business will be reduced, but the number of staff in other areas will be increased due to the increase in business. In addition, banks are usually conservative institutions, so it may take many years for this day to come. Yicai: How is the development of blockchain in the world?

Cai Wei-de: Currently, the UK is a country that is developing relatively fast. The British government is leading specialized propaganda agencies, think tanks and universities to work together, and banks and various technology companies are also involved. In addition, although blockchain is the underlying technology of Bitcoin, in the eyes of the British government, blockchain and Bitcoin are separate. Because Bitcoin was once involved in crime and money laundering, they separated blockchain and Bitcoin. The same is true in Russia, which even banned Bitcoin transactions. However, the Russian Central Bank and their commercial banks embrace blockchain. In China, although many related blockchain companies and alliances have emerged, they are still in a relatively disordered state and need a comprehensive organization that can attract forces from all sides.

And today there are still many people who have never heard of the term blockchain, or who have heard of it but think it is a tool for crime and money laundering.