OKCoin's Xu Mingxing talked about blockchain applications, setting off a fire in Shenzhen's financial IT community

Blockchain technology is the most popular hot word in the financial world. The status of blockchain in financial networks is like the status of TCP/IP protocol in the Internet. It has spawned a large number of popular innovations and applications. Financial institutions at home and abroad have announced their research or application of this technology. In order to popularize its principles in the Shenzhen financial IT industry, understand its development trends at home and abroad, share its application practices, and jointly explore cooperation opportunities in the field of blockchain in the Shenzhen financial industry, the Shenzhen Financial Information Service Association held a special seminar on Shenzhen Financial IT Industry (Blockchain Technology) on the afternoon of March 17. It also invited Xu Mingxing, CEO of OKCoin, a leading domestic blockchain and digital currency technology company, to deliver a keynote speech.

What are the application scenarios of blockchain? In response to this question that the participants were most concerned about, OKCoin CEO Xu Mingxing introduced that dozens of financial institutions, including Nasdaq, NYSE, and Citibank, are currently carrying out blockchain financial innovation. He firmly believes that blockchain is a technology that can truly reconstruct the financial system from the bottom up and may also change all aspects of social life.

The following is a summary of the key points of Xu Mingxing’s speech on the principles and applications of blockchain.

What is blockchain?

Blockchain technology originated from Bitcoin and is a general ledger maintained collectively by participants in the Bitcoin network. Each participant in the blockchain network is a node, and all nodes store a complete set of ledgers that record all historical account information. Any node that needs to initiate a transaction needs to pass the transaction information to every node in the blockchain network to ensure that the ledgers stored on all nodes can accurately update and verify the transaction.

It can be said that blockchain technology is a technology that collectively maintains a reliable database in a decentralized and trustless manner. Bitcoin is just the first application of blockchain technology. These technologies can promote smart transactions, distributed equity issuance and asset transfer. In the future, blockchain technology may revolutionize currency transactions, assets and data.

How does blockchain record transactions?

A initiates a financial transaction to B. The transaction information is packaged and recorded in a block. The transaction record is broadcast to the entire network, and then the block is added to the blockchain. The public ledger of this blockchain records all irrevocable transactions, and B receives funds from A.

Blockchain solves two difficult problems in digital transactions: controlling information and avoiding duplicate transactions, the famous "double-spending problem."

The current attitudes of governments towards blockchain technology

Governments such as the United Kingdom, the United States, Japan, and South Korea are all vying to take a lead in blockchain technology, fearing that they will lag behind.

Zhou Xiaochuan, Governor of the Central Bank of China: Blockchain technology is an optional technology. The People's Bank of China has deployed important forces to study and explore the application of blockchain technology (February 13, 2016)

UK Chief Scientist Reports to UK Government: Government Should Conduct Distributed Ledger Trials to Gain Usability in Public Sector (January 19, 2016)

The SEC has confirmed Overstock's plans to use blockchain technology to issue shares (December 16, 2015)

Japan's Financial Services Agency considers legislation to classify digital currencies as currencies (February 23, 2016)

South Korea's stock exchange will use blockchain technology to create an over-the-counter trading platform (February 13, 2016)

Blockchain will reshape the business model of the entire industry

Blockchain technology will reshape business models in almost all industries, including retail finance, the Internet of Things, digital currency, financial infrastructure, government, law, and more.

For example:

Subverting traditional financial payment

Wall Street giant Goldman Sachs believes that blockchain technology can completely change the traditional payment system and can be used in a wide range of things including issuing securities and smart contracts. Compared with the traditional trading system, blockchain technology can make transactions faster and at a lower cost.

Internet of Things

Blockchain technology can realize the Internet of Things with distributed cloud networks, in which the device operating environment is decentralized and interconnected, which can solve the node trust problem. Each device can manage itself and does not require frequent manual maintenance, thus saving life cycle costs and increasing revenue.

Cross-border remittance

Cross-border remittances based on blockchain or distributed network technology can enable users to complete cross-border transfers at a lower cost and faster speed under a decentralized mechanism, which has a huge market space and is therefore valued by investment institutions.

notarization

The information that needs to be notarized can be directly recorded in the blockchain, so that the information cannot be forged or tampered with. There is no need to go to the notary office again and again. Moreover, the credit of the notary office itself is limited, not unlimited, and fraud can also be committed in it.

audit

The Big Four accounting firms now conduct audits based on their reputation because of the brand they have built over the years. Blockchain technology can achieve more efficient and reliable audits.

Appreciation of blockchain technology application cases

Case 1: Nasdaq uses blockchain technology to complete private securities transactions

Nasdaq Inc used blockchain technology to complete and record a private securities transaction for the first time late last year as the exchange operator seeks to take a leading position in the field.

Case 2: Mizuho Bank conducts blockchain cross-border payment trial

Japanese banking group Mizuho has completed a trial of cross-border securities settlement using blockchain, with participants saying the results showed that post-trade processing time could be reduced using blockchain applications.

Mizuho said in a statement: In the system, blocks containing transaction information are continuously generated and linked in chronological order to form a blockchain, which becomes information that cannot be tampered with. Moreover, because information can be shared among multiple companies, partners have confirmed that it can shorten the time required for post-transaction procedures and reduce the possibility of data tampering.

Case 3: Onename’s blockchain identity system

Onename takes a unique approach to creating a name or unique profile for a user’s online blockchain-verified identity. The open-source identity provider, which began work on the project in March 2014, is able to create a name that replaces the binary number or Bitcoin address solution.

Case 4: 21Inc — Micropayments on the blockchain

Leading Bitcoin startup 21 Inc has launched a 21 micropayment market that allows buyers and sellers to trade digital goods using Bitcoin. The company also plans to bring embedded chips to market that allow users to mine Bitcoin using smartphones and other Internet devices. Padmathy Wario, chief technology and strategy officer at Cisco, said: "Bitcoin may be the next great protocol for the Internet. With the distributed ledger of blockchain and the advantages of small transactions, it will have the potential to go far beyond digital payment methods."

Case 5: Stampery uses blockchain to notarize documents

Stampery provides legally binding proof of all your sensitive documents. They use blockchain to prove the existence, integrity, and ownership of any document. Anyone in the world can automatically prove when a document was created and has not been modified since, for free. The reasons to use Stampery are the same as those for notarizing a document. It is a great way to protect intellectual property and prove the validity of wills, oaths, contracts, communications in family disputes, and more. The advantage of Stampery over notarizing a document is that you don't have to take the paper documents to the notary in person, which saves a lot of time.

Case 6: OK’s multiple blockchain products

OK Company is a leading blockchain technology platform company in China. It has solid technology and product accumulation in the blockchain industry and has the industry's top team. It owns three major product lines: China's largest blockchain asset trading platform OKCoin.cn, block connection network OKLink, and blockchain self-financial platform Haoyouqian.

OK Company has received a USD 10 million Series A investment from the well-known domestic VC Ceyuan Ventures and the top Silicon Valley investor Tim Draper. Mr. Tim Draper is also an investor in a series of well-known companies such as Tesla, Baidu, SolarCity, and Hotmail.

It is foreseeable that in ten or twenty years, we will talk about blockchain technology as commonly as we talk about the Internet now. Let us witness this great and innovative era together.