Important interpretation: Welcome the spring of blockchain industry development! (Part 2) ——Research on blockchain industry development

introduction

2.1 Overview of blockchain and sharing

In recent days, mainstream media have taken turns to speak out, big names in the economics community, and major research institutes have begun to write articles to analyze and discuss the future development of the blockchain industry. This time, the country has proposed blockchain technology as an important national strategy. The main goal is to apply blockchain technology to my country's social and economic life, promote the development of the blockchain industry, complete industrial upgrading, and inject new vitality into the economy. Returning to the blockchain technology itself, let us briefly summarize blockchain technology.

  Blockchain is a decentralized distributed ledger database. Decentralization means that everyone is the center, and this ledger exists in everyone's hands. The database records every transaction recognized by everyone. It uses the characteristics of security, immutability, accessibility, and no third party to completely eliminate "middlemen" and greatly improve efficiency and the trust of all parties.

From the invention of Bitcoin to its acceptance by some people, the blockchain industry has developed for ten years. At present, the applications that are truly recognized by the public and enterprises are still Bitcoin and Ethereum. As the first cryptocurrency to apply blockchain technology, Bitcoin's value characteristics of "digital gold" are gradually recognized by many people and investment institutions, and Ethereum's pioneering significance as a public chain smart contract is needless to say. However, the development of the blockchain industry is relatively stagnant, both in China and the world. The main reason is that the core technology and difficulties cannot be broken through, and the government supervision caused by decentralization has been in a state of tight control and policy uncertainty is too great.

2.2 What are the main application scenarios of China's blockchain industry?

The development of China's blockchain industry has been full of twists and turns. From the strictest supervision of virtual currency transactions and ICOs in the early stage to listed companies keeping silent about blockchain-related businesses as much as possible, to the development of the blockchain industry being launched as a major policy by the state in recent days, many practitioners in the same industry have a taste of sweet success after bitter experience. However, we need to be sure that blockchain technology, as a cross-era innovative technology, will have a significant impact on our lives in the future. The key lies in how to use it reasonably, legally and effectively.

Although China has a large actual demand for blockchain technology in economic and social activities and a wide range of application scenarios, according to current observations of industries and sectors, the development of blockchain technology is in the early stages of shifting from virtual to real and serving the real economy. Based on the five major blockchain technology application areas mentioned by the President in recent years: finance, people's livelihood, infrastructure (industry), information and government affairs, we can conduct a simple analysis of the empowerment of major areas based on existing blockchain enterprise cases.

2.2.1 Financial empowerment

The unique credit mechanism of blockchain enables many sub-fields in the financial field, covering almost all application scenarios of supply chain, trade, credit investigation, transaction settlement, points sharing, insurance and securities. The blockchain ledger is put on the chain for transactions and storage, which reduces costs, reduces transaction intermediaries, and improves the trust mechanism. Blockchain technology is expected to fundamentally upgrade the entire financial industry in the next few years.

Ant Financial's research and application in the financial field has always been at the forefront of the payment field. Blockchain technology is undoubtedly one of the company's important strategic plans. Let's take a quick look at what Ant Financial has achieved in the application of blockchain technology in recent years.

Cross-border payment: Ant Financial launched the world's first blockchain-based cross-border remittance service for individuals in Hong Kong in June 2018. It achieved cross-institutional collaboration between AlipayHK, Standard Chartered Bank (Hong Kong/Singapore) and Gcash. It only takes 3 seconds for AlipayHK users to send cross-border remittances to Philippine e-wallet Gcash users, and there are no restrictions on working hours for transfers and receipts. Compared with traditional remittance methods, blockchain cross-border remittances have greater comparative advantages in terms of time and cost.

Supply chain finance: Small and medium-sized enterprises have high credit risks and cannot meet the risk control requirements of financial institutions, which makes it difficult to obtain financing. Ant Blockchain launched the "Double Chain" supply chain evidence storage platform in January 2019. It uses the accounts payable of small and medium-sized enterprises as credit certificates and uses blockchain technology to make their credit transparently transfer between supply chain companies, banks, and guarantee institutions at all levels, effectively reducing supply chain financial risks. Ant Blockchain has provided financing services in seconds for 78 million small and medium-sized enterprises across the country.

2.2.2 Government empowerment and enjoyment

In recent years, government departments have upgraded the government data accumulated over the years using electronic information technology, which has significantly improved the efficiency of many practical business operations related to the people. However, data sharing between different government departments is difficult, third-party units are not trusted enough, and data cannot be circulated, resulting in the entire management work being in a relatively slow state. The emergence of blockchain technology provides a safe, trustworthy, and efficient channel for the government to achieve cross-departmental and cross-level data integration, reduce government processing time, enhance security supervision, and empower and upgrade government processing.

Some units and large state-owned enterprises in Beijing have been following up on blockchain technology at a fast pace. At present, the Beijing Internet Court's "Tianping Chain" has been put into trial use in many units. On September 9, 2018, the Beijing Internet Court built the first electronic evidence open ecological platform, Tianping Chain, which was led by the Internet Court and actively participated by all parties in the industry to solve the problems of difficulty in storing, obtaining and identifying electronic evidence. On April 9, 2019, the first judgment of the Beijing Internet Court using "Tianping Chain" evidence was issued. This case involved copyright infringement, and blockchain electronic evidence was used as the key evidence for this judgment. As of April 11, the Beijing Internet Court's "Tianping Chain" collected nearly 3.6 million pieces of online data, the corresponding evidence files may reach tens of millions, and 657 pieces of online evidence verification data.

The use of Tianping Chain is not limited to courts. The core blockchain technology used by the newly established State Grid Blockchain Technology (Beijing) Co., Ltd. is also based on Tianping Chain. The blockchain technology is applied in multiple scenarios such as electricity points exchange, photovoltaic contract signing, bill payment, and electronic invoices.

2.2.3 Empowering and enjoying people’s livelihood

The livelihood sector involves many areas, including medical health, which is of concern to the public, and transportation, which is needed anytime and anywhere. The current medical market size has reached 3 trillion yuan, and will continue to grow at a compound annual growth rate of about 10%. However, at present, the medical industry, especially the medical data field , has problems such as lack of unified standards for data collection, fuzzy classification, and difficulty in ensuring data security and privacy. Blockchain can help solve the industry's pain points, and blockchain is naturally suitable for recording data information. The medical data industry can fully utilize this advantage to put inaccurate and discrepant medical records on the chain. Therefore, many blockchain medical companies have emerged.

Ali Health has been making efforts in the medical field in recent years because of its early layout and good corporate technology foundation. In 2017, Ali Health announced a cooperation with Changzhou City on the "Medical Alliance + Blockchain Project", aiming to use blockchain to achieve safe and controllable data interconnection between some local medical institutions, and to solve the information island and data security problems that have long plagued medical institutions in a low-cost and high-security way. The technical book is now implemented in Changzhou Wujin Hospital and Zhenglu Town Health Center, and will be gradually promoted to all tertiary hospitals and grassroots hospitals in the Changzhou Tianning District Medical Alliance to form a rapidly deployed information network. Authorized doctors can understand the patient's past medical history and physical examination information, and patients do not need to undergo unnecessary secondary basic examinations, reducing medical expenses.

In 2018, Ali Health and Beijing Municipal Science and Technology Commission jointly launched the Medical Artificial Intelligence Open Innovation Application Platform. Based on its technical capabilities in artificial intelligence, cloud computing, blockchain and other fields, Ali Health will work with 20 top medical institutions and AI companies in Beijing to build an open scientific research engine basic platform and engine application service center. The platform will carry out open innovation application research on medical AI based on big data, explore innovative models of mutual communication and mutual recognition of big data security interconnection between medical institutions, accelerate the clinical application of medical AI, and form a platform advantage that matches the international cutting-edge AI research and development and application.

We have a general overview of the empowerment cases in several major areas. For specific information, you can also refer to the "2018 China Blockchain White Paper" released by the Ministry of Industry and Information Technology. You can download it by replying to the white paper in the background.

2.2.4 Blockchain + 5G + AI + Big Data =?

I expect that the integration of blockchain, AI, 5G and big data, the four hottest research directions in the current science and technology field and the most important strategic directions at the national level, will reshape the Internet business and financial models in the future. Due to the characteristics and advantages of these technologies, the future development direction will mainly progress in the following directions.

Blockchain + Big Data → Data trust, privacy protection, data sharing to maximize data value

5G → low latency, large bandwidth, fast speed, strong connectivity → distributed computing platform, decentralized network computing platform → network architecture, computing and storage capacity upgrade

AI → algorithm upgrade, autonomous computing control → core computing terminals connect to distributed computing terminals, and the "beauty of computing power" expands from point to surface.

Note: For detailed analysis, please follow my official account. I will continue to update in the future.

2.3 Technology upgrade is the core driving force of this round of blockchain development

2.3.1 Difficulties of blockchain technology

After ten years of development, blockchain technology has not been widely used. In addition to the strong government supervision, the key reason is that the core technology and basic problems have not been effectively solved. Looking at the world, the most effective solution of blockchain technology is actually far behind the mature technology of existing application scenarios. Therefore, in his previous speech, the president emphasized that blockchain should be an important breakthrough for independent innovation of core technologies, clarify the main direction, increase investment, and focus on conquering a number of key core technologies.

Here is a quote from Academician Chen Chun’s view on the technical difficulties of blockchain in his report to the state, “Key Technologies of Alliance Blockchain and Regulatory Challenges of Blockchain”:

1. Large-scale high-performance peer-to-peer network. For blockchain applications, large-scale peer-to-peer network is the most important, because blockchain is originally a peer-to-peer transmission. If there is no breakthrough in network technology, it will be difficult to improve the performance of the blockchain system.

2. Modular secure cryptography protocol. Blockchain is originally distributed and encrypted. The secure cryptography protocol is modularized, and the blockchain subsystem is embedded in different modules. Modular secure cryptography protocol is also a research area.

3. High-performance programmable computing engine. We hope that users can use different programming languages ​​to program different smart contracts. Since different programming languages ​​are used, you need a high-performance programmable computing engine.

4. Definable data distribution protocol.

2.3.2 Overview of the Development of Blockchain Technology in China

Although there are still many problems that need to be solved in the blockchain industry, due to the importance that China has attached to the development of blockchain technology and industry in recent years, various universities and units have successively established blockchain research institutes, and major Internet giants and enterprises have made extensive layouts in the blockchain industry. We can simply know from the statistics of the number of global blockchain invention patent applications that China's research in blockchain has completely reached the world's leading level.

The number of patent applications from domestic Internet giants, financial enterprises and public chain companies has increased significantly compared with the previous period. At the same time, in the two batches of blockchain information service filings released by the Cyberspace Administration of China (CAC), finance, people's livelihood, government affairs and basic industries are the key application scenarios of blockchain service companies. BATJ obviously laid out very early. JD.com filed 4 product services, Baidu has 4, Alibaba has 3, and Tencent has 5. I will not post the specific filing table here. Interested friends can go to China Information Network to view the specific information.

It is foreseeable that, under the support of national policies, a large amount of talent and capital will flow into the blockchain industry in the next few years, and technological updates and breakthroughs will most likely be ahead of the world.

I once firmly believed that blockchain technology must be a key technology to change social development, but it is unimaginable that it happened at this moment. In a few days, "blockchain" has occupied the attention of all people. This time, the national policy spring breeze has unprecedentedly promoted and supported the entire industry. It is foreseeable that whoever can grasp the spring breeze of "blockchain" will be in a leading position in the development of the next decade, and a group of companies and talents will definitely stand out.

I think the key to the development of this round of blockchain industry lies in technology upgrades and docking with real landing scenarios. Applications must meet the current political supervision. The exaggerated and deceptive hype and ICO bubble in 2013 and 2017 have completely burst. The altcoin projects will be eliminated by the waves, and the teams that really work will emerge. In the short term, it must be mainly about supervision and correcting cognition, paving the way for the issuance of central bank digital currency. In the long term, it will guide capital and talents to enter, and integrate important technologies to truly promote the development of the entire industry.