Founder of the World Economic Forum: Blockchain is the Fourth Industrial Revolution

Klaus Schwab, founder of the World Economic Forum, said that since the invention of the steam engine, electricity and computers, we have ushered in the fourth industrial revolution - the digital revolution, and blockchain technology is the result of the fourth industrial revolution. This is a disruptive technology that geeks and the banking industry are excited about.

So what exactly is blockchain? To put it in a metaphor, it is like a constantly updated sales book that records the assets owned by the parties to the transaction and the transaction records between them. Almost everything can be stored on the blockchain: physical assets (Everledger uses blockchain technology to provide proof of origin for 900,000 diamonds), land (blockchain technology is used for property registration), intangible assets (digital currencies, such as Bitcoin), securities transactions, derivatives, financial transactions, and government work.

The blockchain is composed of a series of data blocks generated using cryptographic methods. Each block contains the hash value of the previous block, starting from the genesis block and connecting to the current block to form a block chain. The clever thing is that the blockchain's ledger is distributed. Each network participant (miners) has a complete ledger and updates it daily. This is to avoid hacker attacks. Hackers may be able to modify the block records of one or a few computers, but it is impossible to modify the block records of thousands of computers.

Obstacles facing blockchain technology

At present, blockchain technology is still in its early stages of development and there are still many problems. First, the attitude of the regulatory authorities is not clear; second, blockchain technology lacks a unified standard. There are many different systems under this technology, the most famous of which are the blockchain alliance R3, the global trade distributed ledger alliance PTDL, and the Zhongguancun Block Chain Industry Alliance. The industry is also working hard to solve the problem of establishing common standards for blockchain. In April this year, the International Organization for Standardization (ISO) received a formal request to develop a new ISO standard for blockchain and digital distributed ledger technology.

The third obstacle is the issue of capacity expansion. Blockchain technology consumes a lot of energy. A 2014 report by the National University of Ireland, Maynooth, pointed out that the total energy consumption of Bitcoin mining is equal to the electricity consumption of the whole of Ireland. Therefore, blockchain capacity expansion is the key to solving the problem of high energy consumption.

Blockchain technology is the nemesis of centralized platforms

Blockchain technology can remove the middleman. Centralized Internet platforms such as Uber, Airbnb (a travel home rental community) and TaskRabitt (a daily housekeeping expert) are committed to disrupting taxi companies, the hotel industry and recruitment companies. Although they have made considerable achievements, blockchain technology is better. It can store supplier information and allow users to choose or purchase services independently. Blockchain technology is built on an absolute trust mechanism, without the involvement of middlemen, so transactions are very secure.

Blockchain technology also brings smart contracts. The formulation, verification and execution of smart contracts are all done by computers. Recently, the Ethereum blockchain has also emerged. The Economist described the Ethereum blockchain as an ambitious cryptographic ledger project. Because on May 28, the DAO project initiated by Ethereum raised 150 million US dollars worth of ether. DAO has pioneered a new venture capital model that runs only on the Ethereum blockchain, and all its regulations and decisions are executed by smart contracts.

Whether blockchain technology is the future or a fantasy, welcome to participate in the Fourth Industrial Revolution.