The most disruptive technology in the Internet era: blockchain

In the past year or so, the Internet technology - blockchain has received a lot of attention from the financial community of Wall Street and the technology community of Silicon Valley, with venture capital investment of nearly 1 billion US dollars. So what exactly is blockchain? This article briefly describes blockchain in terms of value in the financial industry: it is a database for managing property rights. The blockchain technology is a database technology that can be used for contract accounting. (Blockchain is also translated as blockchain). The biggest feature of the blockchain database is that the recorded information fields are associated and correspond to the generation time. Modern science tells us that time is eternal and irreversible. Therefore, the information in the blockchain is unique and cannot be tampered with. At the same time, this information can be easily used and controlled by the owner, which has brought great changes to the property rights system in the Internet era. The property rights system is the core system of the modern market economy system. The blockchain effectively supports the property rights system in the Internet era because the blockchain exists on the Internet and is indestructible, which adds a new capability to the Internet: confirming the ownership of the information owner and providing technical guarantees to ensure its continued ownership and use. We know that the Internet was conceived in the 1960s, born in the 1970s, developed in the 1980s, applied on a large scale in the 1990s, and fully entered human society in the 2000s. It has been 50 years since then, and has effectively transformed all aspects of human society. However, the focus of Internet development is to ensure the rapid production and low-cost circulation of information, but the protection of information is lacking. A large number of problems have arisen, such as counterfeiting, piracy, random copying, information security, etc., which are essentially violations and trampling of the property rights system. If there is no effective property rights system in the Internet era, let alone the Internetization of a large number of physical assets and how to continuously carry out asset securitization.

The financial industry initially didn’t care about this technology, but from the second half of 2014, it began to consider using this technology. Why? The modern property rights system is the foundation of the social credit system. Finance is an information business. The blockchain can manage the flow of information very well. Whether it is bonds, equity, etc., it is the right to possession, use, income, and control of ownership, etc. It facilitates asset liquidation, payment transactions, securities transactions, and regulatory compliance. At the same time, it reduces risks, reduces operating costs, and improves efficiency. Therefore, more and more financiers have seen the value of blockchain, which can effectively reduce the IT costs of Basel compliance.

Because the first commodity produced based on the account chain technology is Bitcoin, it is inevitable to mention Bitcoin when talking about the account chain. Governments around the world, including China, define its commodity attributes as an asset, "Bitcoin is not naturally a currency, and currency is naturally Bitcoin." This is obviously a modification of Marx's words. The attributes come from scarcity, easy cutting, and good liquidity. These are all manifestations of the intrinsic value of the account chain. If Bitcoin is understood from the perspective of the account chain database, it is a balance in an effectively protected account, just like the balance in a bank account, but this balance can only be changed by the owner himself, and no other organization or individual can interfere or extract it. This has become the safest asset in human history, and is treated as a US dollar asset, a RMB asset, and a Euro asset, which is convenient for circulation and carrying.

Let me say one more thing. As an asset, if there is no clear property right, how can we fully define the transaction and transfer the ownership and use right? Although it is very hot, the current big data industry is indeed built on the sand, wandering in the gray area of ​​the law. The use of data is not transparent and abused, which seriously infringes on personal privacy. In fact, the property right management of all data (information) on the Internet is problematic. For example, in the Uniqlo video incident that was very popular a few months ago, after the intimate videos of the male and female victims were generated on the mobile phone, these private videos were like the devil flying out of Pandora's box. The victims themselves had no control over the use of the videos: they were forwarded by friends of friends and put on the video website, and then the media and onlookers came in one after another to criticize and comment on them. After the carnival, the female victim wanted to jump off the building. Looking at all technologies, only blockchain can realize the property rights protection of information (data) ownership and effectively separate the right of use. In this environment of effective management of data property rights, individuals will be happy to submit data that quantifies themselves and willing to submit more data. It can effectively monetize the data generated by each person, generate real contracts, improve the contradiction between big data use and privacy protection, and provide useful help for the credit construction of Internet finance.

In addition to some domestic and foreign companies exploring and innovating around big data and Internet credit, Internet technology standardization organizations such as IETF and W3C also use account chains to solve some Internet security problems such as DDoS, domain name resolution poisoning, electronic passports, medical information, biological gene data, etc. When combined with the Internet of Things technology, machine intelligence and drones become effective individuals participating in the market economy system. There is a lot to talk about these, and we can talk about them at another time.

In the long run, the account chain is likely to subvert the way society operates in the future and rebuild the infrastructure for the safe operation of human society in the Internet era. In the medium term, as an account chain native to the Internet, it provides a solid foundation for the property rights system in the Internet field and will promote the faster development of Internet finance.

Finally, a short poem

I believe Bitcoin will replace gold just like notebooks replaced writing.

Paper and pen have become auxiliary means and art appreciation, while computer products have become essential means.

Oh, I am the ghost of God, I stole the code of heaven and gave it to you - human being.

Every gain and loss of your humanity is here - in the ledger, just as it is in Heaven's ledger.

Don't be afraid, it is exactly the same, no matter in this life or the next.

It is always what God says about you…

Zhanglian, the messenger of God. He is whispering...