Speculations on the development of blockchain technology in China

The disruptive nature of financial technology innovation is always the most eye-catching and VC-attracting, simply because it is a "money business". Many financial technologies are given more ideological halos abroad, and more sense of mission makes many people continue to follow, but its inherent profit-seeking nature cannot be ignored. Therefore, the digital currency trend driven by investors of digital currencies such as Bitcoin and Ethereum is booming abroad, but in China with socialist characteristics, there are not many people who "build positions" for the ideal of decentralized finance. So far, I can only make a guess about the development path of blockchain technology.

The development trajectory of financial technology

In China, finance is the lifeblood of the country and is managed and operated as the core of economic development. Even though the development of technological innovation has received more and more open support, the contingency of its survival and development is still far less than the inevitability (policy). Take two financial innovations as examples: P2P and identity recognition.

Domestic P2P is a mixture of two directions. At the beginning of its development in 2007, the two parts were relatively clear, namely, small unsecured loans represented by the Poverty Alleviation Foundation, and pure online P2P loan matching represented by Renrendai. The final destination of the former can only be ABS, while the core of the latter lies in big data operation. At the beginning of the development of these two models in China, there were already clear companies abroad that could learn from them.

This is what was mentioned above, that financial technology innovation has given the halo of "giving the poor credit value" or "big data is value", and then, it has been "localized" in China as online lending based on the review capabilities of institutions (which has nothing to do with the poor and big data ). Behind its glory is definitely not the great ideological mission, but that this type of lending is purely "dirty work" and "hard work" for regular banks. Those P2Ps that are struggling "not for the purpose of running away" are only accumulating letters of credit (a huge list of fraudulent borrowers) for a future license.

By the same token, we can look at the "identity recognition" technology that has long been popularized by various science fiction movies. Fingerprints, voices, and irises have long had no technical barriers. At the same time, this type of auxiliary financial technology innovation does not say that it will "revolutionize anyone", but the development prospects are still unclear. The root cause is not the lack of demand, but the profit of B2B or B2G business is squeezed to an extremely low level, and banks are simply unwilling to pay for it. However, this type of technology has finally regained some confidence as a "tall, rich and handsome" company after being used on mobile phones.

From this point of view, it is not optimistic to expect the development of blockchain technology to be recognized and promoted by financial institutions like in foreign countries. The redistribution of loan proportions of major banks after the interest rate is liberalized will be enough to make a big difference. At the same time, don’t fantasize about disruptive changes. There will only be one digital currency supervised by the state in China. Without the huge profits of digital currency investment, no one will wave the flag for ideology. Therefore, in the development of blockchain in China, public chains and alliance chains basically belong to the category of B2B\B2G, which is a loss-making business. Private chains and contract-embedded side chains should be the focus of development, but they must be aware of doing "dirty work" and "hard work".

Theme: People make history because they have no choice.

Blockchain? Chain of contempt!

According to the writing trajectory of the article, I should talk about what is "dirty work" and "hard work".

What is blockchain: A distributed accounting technology that uses the Syllabus algorithm in cryptography to give the concept of timestamps and realizes the unalterable credit transaction value based on the whole network accounting model.

What is the contempt chain: It is said that people who watch British dramas look down on those who watch American dramas, those who watch American dramas look down on those who watch Japanese dramas, those who watch Japanese dramas look down on those who watch Korean dramas, those who watch Korean dramas look down on those who watch Chinese Hong Kong dramas, those who watch Hong Kong dramas look down on Chinese Taiwan dramas, those who watch Taiwan dramas look down on mainland dramas, and those who watch mainland dramas look down on Thai dramas...

The core technical experience of blockchain is that it is real and cannot be tampered with. This will be applied to any network activity and become a basic protocol (as popular as TCP/IP protocol) to achieve further authenticity of virtual networks. Just as everyone needs to go through the process of self-cognition from adolescence to the first few years of entering society, if the application of blockchain does not maintain the user's contempt chain to maintain self-cognition, its unchangeable advantage will become a cocoon in its own right. So first of all, the community needs a contempt chain, and secondly, even the lowest level of the real contempt chain is better than nothing. Blockchain solves the problem of authenticity, but only blockchain products that understand the contempt chain can survive.

For example: In the early days of Weibo, there were various big Vs: big Vs who retweeted > big Vs who only commented > big Vs who were only followed by fans > big Vs who had no fans following them. Then fans, retweets, and comments could all be bought and sold, and WeChat subverted Weibo.

Let me give you another example: people who use Apple phones > Samsung phones > Huawei phones > Xiaomi phones > Hammer phones, but where have all the other brands of phones gone?

Topic: The following is a conversation between me and Gong Ming (Baozou Gongqinwang), a well-known blockchain blogger in China.

Me: Hello, Prince. Chapter 4 of the blueprint gives an example of the impact of blockchain on global collaboration. I don’t understand the operation of researchcoin. It feels no different from paying to read a paper. Including the description of journalcoin in the article, I don’t feel that blockchain is special in intellectual property. Is it just to establish a Bitcoin incentive algorithm based on blockchain in the intranet? Can it prevent the free dissemination of papers on the Internet?

Prince: I don’t think this is possible.

Me: My current understanding is that the significance of blockchain is to maintain the decentralized structure of a community based on value consensus. Is this understanding correct?

Prince: That’s basically it.

Blockchain promotes sharing model

Regarding the development of blockchain in China, I personally think it is an overall product upgrade. This upgrade is "decentralized" in function, but it is essentially pursuing "high efficiency". Whether it is the gradual rise of the "sharing economy" that needs this kind of real endorsement, the government's fiscal policy, or the supply-side reform, it also needs the real value of information flow. Although we are cautious about the reference of foreign cases, the trend of the continuous expansion of the scope of application of blockchain cannot be ignored. For example, UBER and AIRBNB are starting to upgrade and adjust their products based on blockchain technology, Deloitte's blockchain accounting exploration, and the feasibility of the "Taobao" model based on blockchain that is worth paying attention to recently. Digital currency that can be used as a reference at the national level has long entered the public eye. From recognizing the legitimacy of Bitcoin to the release of RSCoin in the UK, it has also set off a wave of awareness of the popularization of blockchain technology.

We all know that money is a tool used as a medium of exchange, a store of value and a unit of account. Online transactions make the storage value of money disappear, and blockchain is also a more tamper-proof accounting model. So, let me make a bold guess. If the transaction medium attributes of digital currency are strictly controlled (even the points system is controlled), then blockchain technology may eventually promote barter within the community.

The blockchain itself is a basic network protocol of authenticity, and its services require cognitive network products with real records. If it must be linked to national digital currencies, it will only convert credit value through banks or MBS and ABS models. A decentralized financial innovation technology has replaced currency transactions represented by freedom to a certain extent. This conjecture may eventually be closer to the truth.