PK between the five major blockchain factions: Resolutely not to issue coins and focus on researching scenario applications

Getting to the bottom of blockchain

Since last year, blockchain has become the hottest word in both the financial and non-financial circles. Some people use it as a gimmick to engage in various speculations, while others work hard and do not engage in ICOs. Bitcoin has receded after the craze, but has recently shown a trend of heating up with the entry of institutions. The reporter investigated the research and application of blockchain technology in five major schools, including central bank research institutions, Internet giants, blockchain upstarts, financial institutions, and academic institutions. The researchers believe that "the real experts who study blockchain look down on the currency circle and believe that with the implementation of some practical applications of blockchain, the hype bubble of virtual currency will burst in the next two years."

Introduction

In the commercial banking sector, blockchain technology applications are more likely to be tested in low-frequency businesses with small transaction volumes. For example, Postal Savings Bank of China and IBM have applied blockchain technology to asset custody systems, Minsheng Bank has conducted some internal trials in bills and international business, and China Zheshang Bank has launched a digital bill platform.

While the cryptocurrency circle that hypes virtual currencies continues to use blockchain as a cover, a group of institutions are still insisting on promoting blockchain technology research and its application in real-world scenarios, while insisting on complying with legal regulations and not issuing coins.

A reporter from 21st Century Business Herald observed and sorted out the issues and communicated with industry insiders and learned that there are currently several major "schools" in the field of blockchain technology research: the national team represented by three central bank-affiliated companies such as China Banknote Credit Card Co., Ltd., the Central Bank Printing Science and Technology Research Institute, the Central Bank Digital Currency Research Institute, and the China Academy of Information and Communications Technology of the Ministry of Industry and Information Technology; the camp of Internet giants represented by Ant Financial, Tencent, Baidu, JD.com, and NetEase; blockchain upstarts such as Wanxiang Blockchain Co., Ltd.; in addition, there are commercial financial institutions represented by Bank of China, Ping An Bank (Ping An OneConnect), Minsheng Bank, and China Merchants Bank, as well as academic institutions such as Zhejiang University.

In the "2017 Global Blockchain Enterprise Patent Ranking (Top 100)" released by the global intellectual property industry media IPRdaily and the incoPat Innovation Index Research Center, Chinese companies accounted for nearly half of the list, among which Alibaba Group ranked first with 49 global patents, but three central bank institutions quietly became the biggest winners with a total of 68 patents.

With the concept of blockchain being so popular, how can a blockchain that does not issue coins be used? What are the application scenarios?

Giants test blockchain

As a multi-party encrypted distributed accounting technology, blockchain can reduce the trust cost of all parties involved because of its decentralization, immutability, traceability, openness and transparency.

Blockchain has not yet become a phenomenal application, and it is not easy for ordinary people to perceive the changes brought about by the application of this technology. However, giant institutions and capital have to pay close attention to this technology, fearing that this technology may be like the changes brought about by Internet technology, and even subvert the existing Internet giants.

Wang Lei, a blockchain industry observer, told the 21st Century Business Herald reporter that the current application of blockchain is far from individual users, but the possibility that it can solve some traditional business pain points may make institutional clients more interested in blockchain. Take real estate transactions as an example. Traditionally, users need to obtain relevant certificates from several departments such as the tax bureau, bank, and government affairs management center. However, if the blockchain system is used, the certificate of a user in one department can be shared and recognized by other departments, ensuring that the information of each department is relatively independent while exchanging information, thereby improving efficiency.

A reporter from 21st Century Business Herald noticed that some games or small programs based on blockchain technology are currently being tested by individual users. A user spent 3.19 yuan to write the travel plan agreed with his family on the blockchain system, which cannot be changed. "It may not be practical, but it can also be regarded as enhancing the perception of individual users. Xiaomi launched Crypto Rabbit, Baidu launched Lets Dog, and NetEase also launched "Planet". Virtual pets can reproduce offspring, and there are corresponding points according to the pet level. Players can exchange points for higher-level virtual pets.

NetEase Planet said that users' social, entertainment, shopping and other traces on the Internet are their own data assets. Through blockchain technology, users' data can truly become their own, reflecting the value of personal information.

However, the CryptoRabbit user service agreement clearly states that it is prohibited to engage in the exchange of points for legal currency or "virtual currency", to buy and sell points, or to provide pricing services for CryptoRabbit or points.

This may involve another question: Does blockchain have to issue "coins"? On September 4, 2017, the central bank and seven other ministries and commissions jointly issued the "Notice on Preventing the Risks of Token Issuance and Financing", calling for a halt to all types of token issuance and financing activities. This is a typical financing model for some blockchain companies. Wang Lei introduced that "coin" in the blockchain field is a popular name for "Token", which is very similar to points in the Internet field, but it has higher rights such as voting participation and customization rights.

Cai Yige, general manager of Tencent's blockchain business, said at the opening ceremony of Peking University Guanghua Blockchain Laboratory that in the alliance chain where institutions cooperate with each other, since the cooperation between institutions itself has commercial interests as a prerequisite, "coins" are not needed. In some public chain scenarios, incentive mechanisms need to be solved. Participants are willing to contribute computing power because there are corresponding benefits, and they may need the incentive of "coins". However, in addition to the use function, "coins" also have speculative attributes. Because the domestic speculative attributes are too strong, the regulatory authorities have stopped ICO. Cai Yige said that from a technical point of view, blockchains based on different scenarios will have different development directions. Alliance chains that do not require "coins" can also have more influential application scenarios. The current focus of Tencent's blockchain layout is in the field of supply chain finance.

During the Two Sessions, Tencent Chairman and CEO Ma Huateng also made it clear that Tencent Blockchain will not issue coins and is actively exploring the application of blockchain in various scenarios.

Wang Lei pointed out that many Internet giants are currently testing the waters and launching blockchain games that have corresponding points, but restrict their circulation and secondary market transactions in order not to violate laws and regulations, while at the same time maintaining attention and reserves on cutting-edge technologies.

Bursting the Cryptocurrency Bubble

Jiang Guofei, vice president of Ant Financial and head of the technology laboratory, emphasized that Ant Financial has applied for many blockchain patents, but none of them is related to ICO.

Jiang Guofei said that blockchain technology can make the digital world, which can be modified and copied, as credible as the physical world, and based on credible data and smart contracts, the participants can collaborate efficiently. In some specific applications, at the end of last year, Ant Financial and Moutai reached a cooperation to use blockchain technology to help Moutai trace the source of authentic products, which is currently under internal testing and debugging. In addition, applications in public welfare have been implemented, such as making every donation traceable and tracing the source of foreign milk powder.

JD Finance said that it applied blockchain technology to ABS cloud services in early 2017, ensuring that data in underlying asset management is authentic and cannot be tampered with, enhancing the trust of institutional investors, and helping to lower the threshold and issuance costs for consumer financial service companies to issue ABS. In January 2018, it completed the commercial application maturity verification of the alliance chain with UnionPay, Wanda, and China Merchants Bank, and began to plan commercial landing projects.

As for commercial banks, some applications based on blockchain technology are also being explored. Postal Savings Bank of China and IBM have applied it to asset custody systems, Minsheng Bank has conducted some internal experiments in bills and international business, and China Zheshang Bank has launched a digital bill platform. According to industry experts, blockchain is not yet perfect and mature, so when it is applied within the financial institution system, some low-frequency businesses with small transaction volumes are more likely to be selected for trial use.

As an integration of multiple technologies such as P2P networks, cryptography, and smart contracts, the concept of blockchain technology has been around for ten years, but it has not yet been put into large-scale application.