What blockchain brings to mankind is not a technology, but a global economic "republic"

Blockchain, a concept that was almost ignored a year and a half ago, has suddenly become very popular recently. Since the cover article of The Economist magazine in October 2015, "The Machine of Trust", it seems that the whole world has set off a wave of research on blockchain: a large number of financial institutions have suddenly expressed great interest in this technology; technology giants have also successively released strategies on blockchain; venture capitalists have finally begun to be unable to hold back, and the total amount of venture capital invested in this field in the past year has exceeded 1 billion US dollars.

Many people are curious about what blockchain is. Are those financial technology giants crazy? In the face of the Internet, cloud computing, mobile era, cognitive computing and other high-end technologies, technology companies did not compete with each other as they do today; in the face of the Asian financial crisis in 1998 and the global financial crisis in 2008, financial giants did not seem to have the motivation to gather more than 40 financial institutions to discuss how to deal with the crisis. But today, almost all financial and technology giants are suddenly so enthusiastic about this obscure concept called "blockchain" that they don't even know what it is, which comes from the humble Bitcoin?

At present, most people think that blockchain is a disruptive technology, and participants claim that this technology will definitely subvert the world. It has peer-to-peer network characteristics, is based on cryptography, has a consensus mechanism as an outline, and uses a chain structure to store data, which makes it have a series of characteristics such as immutability, transparency, traceability, digitization, and reliability. It feels that as a technology, it can be applied to various industries and fields, and can efficiently handle various businesses without the need for media, so everyone is trying to find business scenarios for blockchain. But at this time, many people may also find that it seems difficult to find a perfect application scenario. Some people think that blockchain is not so magical in various application environments. What blockchain can do can actually be done without blockchain. Some reports point out that the many characteristics of blockchain seem to have some contradictions that cannot fully adapt to the current business scenarios, and even seem to become superfluous in some places, so that some critics have listed several technical or commercial reasons to judge that blockchain cannot become mainstream.

Almost every organization interested in blockchain is studying how to transform existing applications with blockchain, and wants to use blockchain to replace paper money, trading platforms, and various existing systems...

But the fact is that any attempt to transform existing applications using blockchain as a technology is somewhat futile. The reason for this is that I think this is actually a wrong way to open blockchain, and this wrong way of opening it will only bring garbled text. Because what blockchain really brings to mankind is not a technology, but a new global economic operation mode - a global economic "republic" - with technology.

The political republic appeared in human history more than 200 years ago. The king has always been a special centralized high-power node to maintain the stable operation of the entire system, but at the same time the entire system must also accept the negative impact that this single centralized high-power node will inevitably bring. Philosophers gave mankind another choice. People began to have another choice besides the monarchy. The basis of this choice is that every individual is equal and has the right to participate in political activities equally. The country is managed and politics is practiced through a pre-established constitution. The economic "republic" came more than 200 years later than the political republic. However, blockchain provides technical means to realize the economic "republic" for the first time in human history : using the peer-to-peer value network to achieve complete equality of individuals participating in economic activities, there is no need for a centralized high-power node to maintain the stability of the system. The pre-established consensus mechanism is the constitution in the economic "republic". The various characteristics of blockchain, such as transparency and immutability, are the basis for realizing the economic "republic".

So what has the economic "republic" brought us? This question is indeed not easy to answer, just like asking what the political republic has brought us. The world can still run without a republic, and when there is a good king, it may run better than a republic. In fact, in the final analysis, the republic itself has brought us nothing, but has given us another social operation mechanism. It came into being as human society developed to a certain stage. However, this mechanism can bring us some unexpected things: for example, a more equal society can bring a more stable social structure; to some extent, it can avoid the abuse of power by centralized monarchs. And the economic "republic" can bring us roughly these benefits, but they will be reflected at the economic level.

If the political republic gives the people equal political rights, then the economic "republic" is equivalent to giving everyone equal economic rights. Unlike the current economic operation mode where there are absolute high-power nodes, it provides a way to connect all economic individuals in the world in the form of an Internet value network and treat them equally, using a pre-set consensus mechanism or a signed smart contract to determine who has the right to do what, which will enable the economy to achieve a globalized and highly automated operation.

At the same time, this economic "republic" has a more profound significance, because first of all, political republic is geographical, but economic "republic" can be non-existent. The Internet is borderless, and people can easily have equal economic rights with another person across the Pacific Ocean according to the same consensus mechanism. Secondly, a person can choose not to participate in political activities, but there is absolutely no way not to participate in economic activities. Moreover, the frequency of economic activities is much more frequent than political activities. Thirdly, although the economic "republic" sacrifices efficiency to a certain extent, like the political republic, the execution of any economic activities between two or even multiple parties on the blockchain can creatively use a "smart contract" that is automatically executed by a machine, which will actually be unprecedentedly efficient compared to the current economic operation, and at the same time enable economic activities between objects according to the wishes of the owner. These meanings allow us to see a globalized unimpeded flow of economy in the future. Perhaps this will create a peak of human economic activities in a brand new way.

With the dream of pursuing an economic "republic", Bitcoin is actually the first economic "republic" created by mankind. In a sense, it should be a bit like a "people's republic". In this system, everyone has equal economic status and participates in economic activities. What's more interesting is that you can join or quit at any time. Of course, for the current world economic system, this approach may not be the best solution, nor may it be a universal solution. At the same time, I don't think it is the only solution. But it doesn't matter. This is just the starting point. Its imperfections, immaturity and even defects will not stop people from pursuing an economic "republic". On the road of pursuit, R3CEV, Hyperledger, Chinaledger, and Jinlianmeng, whether they realize it or not, are rushing to establish "parties" and hope to develop party members as soon as possible, and then learn from others to write the constitution of the economic "republic" in their minds. Some of these "parties" are "bourgeois republics", and some are "aristocratic oligarchic republics". Various economic operation models have their own characteristics and are adapted to different environments. Of course, the various "republics" we are talking about here do not have any political ideology, but just different ways of operation. They can coexist and even connect with each other. Because in the system of economic "republic", there is no institutional opposition. Even if there are only two or three participants, they can establish their own system and economic "republic". Any economic organization or individual can also exist in different economic "republics" at the same time. The value of these economic "republics" can refer to the Internet formula, which depends on the number of participants/terminals in the operating system, the degree of activity, the total economic scale, and the breadth of the application field. Recently, I have been asked what scenarios blockchain is suitable for. Some people say it is finance. In fact, blockchain is most suitable for scenarios that require economic "republic". For scenarios without such needs, blockchain is just a not-so-powerful combination of technologies. I believe that if we open it in the right way, the next step is to let a hundred flowers bloom.

We appreciate and support all kinds of contributions to the development of blockchain. This is the human pursuit of progress and cannot be stopped. Whether it is from the perspective of technical implementation, industry application, or even just shouting. But please do not underestimate the role of blockchain as the technical basis for the economic operation mechanism of a global economic "republic". Please be more patient and accept the various difficulties, challenges and design defects encountered in the early stage. After all, the political republic is not smooth sailing either. Opening the blockchain from this perspective will give us a new understanding of the blockchain; this new understanding can enable us to adopt more accurate directions and take more targeted actions; and these accurate directions and actions can truly lead the progress and development of blockchain technology.

This is the real secret of blockchain, a new era is coming!