Will blockchain technology “create trust” and become a hot topic in Internet finance?

Recently, the People's Bank of China held a seminar on digital currency. As a key technology of digital currency, blockchain has entered the public's field of vision. Although many people do not know enough about blockchain, relevant experts said that the technology may be widely integrated into finance, medical care, notarization, communications and other fields. What chemical reactions will these integrations produce? What changes will this technology bring to people's lives? By interviewing industry experts, reporters try to unveil the mystery of blockchain technology.

Blockchain is like a "machine that creates trust"

When talking about blockchain technology, we have to mention Bitcoin. Many people know that the electronic currency Bitcoin is not issued by a specific monetary institution, but is generated through a large number of calculations of a specific algorithm. In fact, the core that truly supports Bitcoin is blockchain technology.

How does Bitcoin, which is invisible and intangible, work through blockchain technology? The interpretation circulated in the industry is that blockchain can be regarded as a technical solution for collectively maintaining a reliable database through a "decentralized" and "trustless" way. In layman's terms, this technology can be understood as a technology for everyone to participate in bookkeeping. In the past, people used centralized servers to keep accounts, but in the blockchain technology system, everyone can participate in bookkeeping and jointly determine the authenticity of the records.

"Through this technology, even without a neutral third-party agency, two parties that do not trust each other can achieve cooperation. In short, blockchain is like a 'machine that creates trust'," said Fang Liang, a Ph.D. in computer science from Indiana University.

Yang Dong, head of the Financial Innovation and Risk Governance Research Center of Renmin University of China, believes that blockchain technology, which is used by all parties to record and store information, adopts a decentralized distributed structure, which saves a lot of intermediary costs and can better ensure data security. At the same time, it has an unalterable timestamp, which can effectively solve problems such as data tracking and information anti-counterfeiting.

Will it become the next hot spot in Internet finance?

Although blockchain emerged with Bitcoin, the derivative value of this technology has surpassed digital currency. Li Yan, CEO of Beijing Weizhi Panorama Information Technology Co., Ltd. , has been paying attention to the development of blockchain technology for many years. He said that the application of this technology first originated in the financial field, which is also the field where it has a profound impact.

In the current international financial market, the US central bank, Swiss banks, and some insurance and futures companies are all competing to develop blockchain technology. Fang Liang introduced that in the Internet financial industry, blockchain technology will first affect financial infrastructure such as payment systems, securities settlement systems, and transaction databases; then the technology will also expand to general financial services, such as credit systems and "anti-money laundering".

"The payment and clearing system in the financial field will evolve towards decentralization. The electronic ledger supported by blockchain technology is a reliable system that is error-free and cannot be tampered with. It has a profound impact on payment, clearing, transactions, and property rights confirmation," said Li Yan.

Therefore, industry insiders believe that blockchain technology may be the next hot spot in the Internet financial industry. As the interconnection of all things deepens, Yang Tao, assistant director of the Institute of Finance of the Chinese Academy of Social Sciences, also said that blockchain will make it possible for all individuals to become important nodes in the allocation of financial resources, and will also promote the improvement of the existing financial system rules and build a shared and win-win financial development ecosystem.

Blockchain technology will impact multiple industries

"Blockchain technology has a wide range of applications in the era of big data." Li Yan admitted that in addition to the field of Internet finance, blockchain technology has been applied in many fields and has shown great prospects.

For example, the healthcare industry has benefited greatly from blockchain technology. In reality, patients' private information is often leaked, and centralized databases or file cabinet management in the medical sector is no longer the best choice. Now, medical institutions such as Philips Healthcare Group are using blockchain technology to keep patients' private information confidential.

In addition, blockchain technology is also of great significance in the legal field. Yang Dong mentioned that in some civil fields, it is often difficult to prove and determine the responsibility, and blockchain technology can record each step and help judicial organs identify the specific responsible persons.

"Especially in the area of ​​assets, whether it is physical assets such as real estate and cars, or intangible assets such as health and reputation, this technology can be used to complete registration, transactions, and tracking. It can be said that blockchain technology will be useful in any area of ​​production and life where there is a lack of trust." Yang Tao said.

Don’t over-mythologize blockchain technology

Even with all the advantages, it does not mean that blockchain technology has become a panacea. Yang Tao said frankly: "At this stage, we cannot be too 'mythical' about blockchain technology. While we attach great importance to the huge changes brought about by blockchain technology, we must also look rationally at the risks and challenges it faces."

Yang Dong also said that from the perspective of specific applications, blockchain technology is still in the exploratory stage, and it is still unknown when it will be widely launched; in addition, blockchain technology itself is not mature enough, and technology suppliers need to prove the maturity of technology and application stability to the market. For example, whether the technology capacity can carry tens of billions of daily transactions will be an important challenge facing future technology development.

With the development of the Internet, blockchain technology, which has the advantages of convenience, efficiency and low cost, will have a disruptive impact on many traditional industries with information asymmetry. Yang Dong also mentioned that the emergence of each new technology will challenge the traditional model and will also bring many inadaptability to regulators, so unified market regulations are also needed.

"The Chinese government has always maintained an attitude of encouragement and support towards blockchain technology. Although it currently faces many bottlenecks, I believe that with the deepening of technology and changes in the transaction value chain and participating entities, the construction of laws and regulations related to new technologies will gradually improve." Li Yan said.