Why do Morgan, Facebook, Wal-Mart and other giants tend to use the alliance chain to release stable coins instead of public chains?

Some time ago, JP Morgan used a chain of alliances, Quroum, to issue tokens equivalent to the US dollar, which were used by financial institutions within the system.

Recently, Hyperledger is also working with Visa to promote blockchain digital identities. These scenes that sound far away from us, but are so centralized and led by leading companies, why should we introduce blockchain technology ?

First of all, the public chain can not meet the needs of enterprises at present ; secondly, the alliance chain plays an important role in the application of blockchain technology industry; finally, under the premise of participants' willingness to cooperate, the alliance chain can be used to build more credible Digital information .

The alliance chain is very suitable for enterprises or financial institutions with certain absolute advantages to be the leader. The goal should be set with long-term investment compensation . Compared with the existing solutions, the cost efficiency analysis is the current promotion. A level.

01 What is the alliance chain? Whether it is a "qualified" participant

Well-known Bitcoin and Ethereum are both public chains, giving "everyone" a computer with the same rights. There are a lot of enthusiastic developers, mature DApps and specialized VCs. The teams and projects here have a good understanding of decentralization and why blockchains are used.

The public chain is a large playground for everyone. Most mature applications and large frameworks are biased towards the public. The following are some of the more advanced and mature applications or frameworks of Ethereum:

Most of them are financial-related topics, DAO-based banks, Open-Source banks and Decentralized banks, and there are few traditional banks in the world. Here, we look forward to nurturing the next generation of revolutionary, phenomenal-level products or services.

The alliance chain is a blockchain that requires registration permission . It is a set of rules designed for " limited participants " to play. The Permissioned Blockchain is a more accurate statement. Regardless of the access rights to the data on the chain, who can participate in setting up the node and who can deploy the smart contract can be designed in the alliance. The alliance chain mentioned here, the following well-known as a reference:

Hyperledger : An enterprise-wide generic blockchain open source framework is being built regardless of industry. There are currently more than 400 cases of conceptual verification (PoC) of the global and IBM cooperative blockchain.

Quorum : The financial industry, launched by JP Morgan, is based on the technical framework of Ethereum and is suitable for use in the financial industry. The structure supports the "unique public account book" and "private account book" coexisting, and has a guiding position in the financial industry. Because it is based on Ethereum, it can share the latest developments of many Ethereum ecosystems at the level of smart contracts and agreements.

R3-Corda : Born for the financial industry, the idea is to combine existing business systems rather than re-engineering them. Compared with the development direction of the public chain using the public to breed the application, the alliance chain is trying to reverse the case, and the more targeted application case of inter-enterprise cooperation is the main application case. The opportunities for the project are mostly the collaboration platform between enterprises, and the blockchain is used to do things that traditional servers can't do.

If you are not in this company, or have a certain understanding of business processes, the public may not feel . I only think it is a press release issued by a certain bank or a certain company. The actual success or failure of the platform will not necessarily be open to the public to review and learn .

02 Universal scene suitable for importing blockchain

Many enterprises use the old thinking to design the whole system in the process of importing. However, they can't answer “Why use blockchain?” So, which scenes are suitable for the import of blockchain?

  • Need to share data together
  • Need multiple participants to write data
  • The cost of not having a fair third party or using a fair third party is too high

Many parties can be small and large. It can be maintained by different organizations, enterprises, sub-groups, groups, guilds and industrial chains, even to the state, in the case of different interests and incomplete competition . Let the participants generate more value.

Sometimes it can even be said that it is a cooperative use of technology to jointly create a "fair third party." As long as the three scenarios are met at the same time, it is basically possible to answer why the blockchain is used.

1. The absolute advantage of the blockchain value realized by the enterprise

From the big business side to introduce the blockchain, what advantage is the new team does not have?

Can be connected to existing business.

Whether there is "existing business" running on the blockchain is the key to making blockchain product services. why? Because the existing business will precipitate a batch of credible data, and credible data can develop new business.

The applications and services bred by the credible data precipitated from the existing business are solid. Compared with no data support, simply using the incentive mechanism requires everyone to throw data into the blockchain and then develop the business, which is much more reliable.

2, the value of data accumulation on the chain

In the past, any transaction record between the two parties of the transaction, if it exists on a traditional server, is often difficult to win the trust of new participants. For example, with our experience in selling and selling goods on Taobao and Jingdong, information about the evaluation of stores and consumers exists in the traditional server of the mall, and the data is owned by the mall.

In the future, we have to do business with strange foreign customers. Can we directly take out the credits we have accumulated in the mall and let strangers make reference? The mall temporarily represents a trusted third party, but if foreign customers have not heard of these malls, can these trading information and evaluations have reference value?

In the event that the mall's operating conditions are not good enough, it is impossible to log in again. Those long-term accumulated trading information and evaluations will be destroyed.

If such consumption, sales and evaluation data can be saved in the blockchain format, the transaction information will help to provide external reference, as a kind of credit. Therefore, if the seller has this demand, the existing mall is very easy to develop a new business model.

Corporate financial services are an obvious scenario. In the past, the funding side (banks) often used “fair third parties” to obtain trusted data sources for high-quality companies to finance.

For example, when a small and medium-sized enterprise applies for a loan from a bank, the bank cannot obtain the transaction records of all the small and medium-sized enterprises, and will go to the joint credit information center; when the multinational enterprise deals, it will also request and refer to the company information collected by the company. They are all looking for trusted data from "fair third parties."

If many companies are under the old cooperation mode, import the alliance chain and link the key information of the transaction behavior, because the data on the blockchain has the characteristics of “difficult to forge” and “not tamperable” , so that the information has certain information. The reference value, this part will certainly reduce the auditing cost of the fund provider when borrowing.

From the standpoint of the enterprise, even if you find the value and scene of the imported blockchain, how do you think about the import of the blockchain?

03 does not adopt public chain considerations

The following two points are the main reasons why enterprise-level blockchain applications do not use public chains:

1. Commercial data privacy

This is the most basic requirement to be met. In the cross-enterprise collaboration, there will be a lot of information about business intelligence. First of all, we must ensure that data security is controlled by the layers in the group. Whoever has the right to see what must be satisfied.

2, the risk should be controllable

If there is a problem with this chain, what risks will it expose? For example, if the platform fails, will it affect goodwill? In the case of financial services, if the hacker invades, how much compensation will be incurred? The enterprise's perspective is to reduce the uncertainty of various risks.

In the public chain, it is difficult to achieve layer-by-layer data privacy, and often with other mechanisms. Such as: the second layer protocol, with the centralized server for encryption and decryption, or only the encryption of the data. In particular, large renewals, hard forks, or large fuel trucks on the public chain may require fuel costs, which are “uncontrollable risks” for enterprises. Both Hyperledger, JP Morgan's Quorum and R3's Corda need to meet the above-mentioned "data privacy" and "risk controllable" requirements.

Because the alliance chain is a licensing system , the data is not disclosed except for members of the alliance. When enabled, the participants are entities of the entity. The speed of node expansion and the newly added nodes are also predictable. It is not necessary to prevent many malicious attacks from the public chain.

Moreover, even if there are evil nodes, there will be real-life governance (kicking out members) to prevent evil situations from happening. In the event of any disaster, there is a last resort. Closing all nodes can block the risk. Standing on the executive side also has the following considerations:

Costs and benefits : The cost of inputs (including maintenance costs) and the benefits gained are also important considerations. Blockchain technology is a very new science. Companies need to deploy a complete, development-oriented team from scratch. The cost is quite high and it is not a short-term one. Usually with external vendors, such as IBM, SAP or BSOS, and other domestic blockchain technology companies, they can be executed more efficiently.

Project mastery : Blockchain technology is changing with each passing day. It is necessary to have cross-disciplinary communication between business and technology. Together with the continuous learning of talents, we can grasp the situation and maximize the benefits.

Process integration: Not every user needs to understand blockchain technology, as if you would listen to music with a Bluetooth headset, but you don't need to understand the principles of Bluetooth technology. Simplifying the concept of a difficult blockchain must be reformed without prejudice to the original business process, and the success rate will increase.

If the UX (User Experience) is not well designed, it will greatly increase the communication cost . Especially when there are many cross-enterprise, cross-departmental and participant roles, the impact of design errors is magnified several times. Poor design of several links is likely to cause the entire import plan to fail.

04 summary

Blockchain technology is not a breakthrough in single-point technology, but requires multiple companies to jump in and play together to create greater value. Therefore, a large enough enterprise has the advantages of capital and partners, and it is a medium- and long-term investment, and a long-term layout of a wider range of cooperation partners.

Regardless of the direction of development, applications will affect the "bottom" design, and the bottom layer will support the proliferation of more applications. The existing underlying layer is usually designed specifically according to the application that was last demanded.

If we want to expect the blockchain revolution to come sooner, we must take advantage of both the public chain and the alliance chain . While the public chain is busy solving performance problems, it may be possible to precipitate a more mature solution in the alliance chain in dealing with data privacy. Therefore, the public chain and the alliance chain are two important weapons, and they can be promoted separately, which will certainly facilitate the promotion of the overall blockchain industry.

Message Mining No. 310: How long do you think we and the alliance chain will take? why? Feel free to share your opinion in the message area.


Author: David Tseng

Source: vernacular blockchain

『Declaration : This article is reproduced from CNews JP Morgan, author David Tseng . The article is an author's independent point of view, does not represent the vernacular blockchain position, and does not constitute any investment advice or advice. You are not allowed to reprint this article by any third party without the authorization of the "Baihua Blockchain" sourced from this article.