Cai Weide, Distinguished Professor of the “Thousand Talents Program” of the Central Organization Department, Scientific Advisor of the Blockchain Research Center of University College London (UCL), Lifetime Honorary Professor of Arizona State University, Professor of Changjiang University of Tsinghua University, Chief Scientist of Beijing Tiande Technology Co., Ltd. .
- Revisiting 2020, Bitcoin wants to say
- Thinking after the Wuzhen Conference: The future ten years of the blockchain in my eyes
- Sergey Nazarov, founder of Wuzhen·Chainlink: Smart Contract 3.0 is a fully integrated smart contract
- People's Political Consultative Conference: How to Promote the Development of Digital China with Blockchain Technology
- Interview 丨 Chain Node CEO Qu Zhaoxiang: To make the blockchain popular, it should be made a trend symbol
- Featured | Ten disasters in the history of Ethereum; how DeFi cannibalize PoS security
The general digital tokens simply do not meet the requirements of digital currency. If you use the technology of the first generation or the second generation of digital tokens to make digital currency, I am afraid that you will encounter an "impossible task" because the technical distance is too far. This distance is just like using a bicycle on the moon. It is impossible. Large-scale digital currency may have to wait for the 10th generation blockchain technology to come out.
Blockchain is a weapon of control, and blockchain technology itself can reduce costs, and the cost savings can cover the costs of the regulatory process. If the company uses blockchain technology, there is no need for manual auditing by the supervisory layer. Because in the blockchain, companies and regulators can share books, so supervision saves the cost of manual auditing.
Statutory digital currency can be launched in a small range and difficult to launch in the short term
The financial world: There are many digital tokens. Will the status of Bitcoin be affected? Will the current blockchain technology be broken by new computer technology after 5-10 years?
Cai Weide: Although there are many digital tokens, there are only a few that can be used universally. Among these digital tokens, Bitcoin is in the position of "king". On the issue of technological innovation: First, new technologies will emerge; secondly, even if new technologies emerge, it will take several years to go from experiment to application; third, if new technologies can really crack bitcoin, then all encryption will be cracked. This is not a digital token problem. Assuming that it can be cracked, the encrypted mathematical model needs to be redesigned.
The financial world: Digital tokens represented by bitcoin consume a lot of energy and computing power to produce something that is not endorsed by equivalents. Do you agree with this view?
Cai Weide: Previously, digital tokens only had payment functions, and some were illegally paid. There is really no special value. Excessive energy consumption is also a major drawback. When the British Parliament was in session in 2016, the Bank of England, the UK's important think tanks, and the UK's chief scientist all made it clear that the British government would never use the public chain and would never use Bitcoin.
But after 2017, the digital token has a second function. In addition to the payment function, it can also be used for investment abroad (this is prohibited in China). When a good or asset changes from a payment instrument to an investment tool, its attributes change.
In some places, digital tokens have replaced fiat currencies. For example, the legal currency of the African country of Zimbabwe is worthless, and many people use the US dollar instead of the French currency. But the dollar is very expensive in Africa, so some Africans will use digital tokens. The IMF has mentioned that the national bitcoin in Zimbabwe is actually like a legal currency. It can be seen that when the country's legal currency is inconvenient to use, the digital token has the effect of replacing the legal currency.
The financial world: Is there a country that has a legal digital currency in the world?
Cai Weide: The United Kingdom is the first country to propose the concept of digital legal currency. Its purpose is to get back the regulatory power. Many transactions in the UK now do not go through banks, so the Bank of England has no way to manage it, so it wants to take back regulatory power. However, if regulation wants to achieve this level, the infrastructure of the entire financial system will change, and very strong blockchain technology will be used.
When I went to London to visit the Bank of England and attend an international conference in September 2016, the Bank of England officials mentioned that it was not the UK’s dream of doing blockchain and new economic new finances, but that Britain was already under new finance, the United Kingdom Part of the economic activity is no longer under the supervision of the Bank of England.
The Bank of England proposed digital legal currency, and the central bank directly docked companies and individuals, affecting interest rates. After the Bank of England proposed, many people discussed a lot of related topics such as “the big central bank model”, whether commercial banks need to exist, and interest rate adjustment policies. However, the British government has issued a digital legal currency. The real purpose is to take back the control and supervision of the new financial system to the Bank of England. Therefore, the Bank of England should develop blockchain technology and use it in the core business of the central bank.
However, the UK has just announced the abandonment of digital currency, and I guess it may be a technical reason. At the beginning of 2016, the British digital coin model RSCoin was based on the first generation of blockchain technology, but the third-generation blockchain technology had already appeared, but the Bank of England did not know. In an article published in September 2016, I pointed out that the digital currency model of the Bank of England based on the first generation of blockchain technology is unlikely to be a positive result. Later, I did not see any new progress in the UK digital currency, and I may have encountered a technical bottleneck.
Now that Britain has given up the digital currency, the ideal of the Bank of England – the withdrawal of control and supervision of new finance – must be postponed. This represents technical backwardness and causes backwardness in national governance. Financial technology has an impact not only on financial companies, but also on the country.
Generally, digital tokens, such as bitcoin, do not meet the requirements of digital legal currency. If someone uses the technology of the first generation or the second generation of digital tokens to make digital currency, I am afraid that I will encounter an "impossible task" because the technical distance is too far. This distance is just like using a bicycle on the moon. It is impossible. Digital currency may have to wait for the 10th generation blockchain technology to come out.
The financial world: Is the legal digital currency of the People's Bank of China likely to be launched in the short term?
Cai Weide: It can be tried in a small scope, but it is not reliable in large-scale use. The legal currency involves people, banks, cooperatives, shops, etc. in China. Nowadays, even the infrastructure is invisible, and it is easy to launch in a short time. How long can it be launched? If you can come out after five years, it will be very fast, even if it comes out after ten years, it is normal.
Blockchain is a long-distance running without technical support will lack stamina
The financial world: Now everyone recognizes the huge imagination of blockchain technology, but at the same time there are many doubts. It is believed that the current blockchain technology is still in the stage of research and exploration, and there is a big bubble in the concept of “blockchain” that investors are speculating. What do you think?
Cai Weide: In 2016, the European Central Bank proposed that the entire transaction, including many traditional clearing houses, clearing houses, and registration centers, may no longer be needed. At that time, I think this kind of scene is too idealistic and will not be realized at all. But now, with the rapid advancement of technology, this concept may be realized after two or three years, even if the final practice will be in 2016 and 2016. The idea will be different.
However, has the fourth industrial revolution that everyone debated really come? Is the blockchain the next Internet revolution? Is the “blocking crazy” in the stock market a bubble? In this regard, I believe that there will be major “structural” changes in the entire industry in the future, not just in the local area. Some companies may not exist in the business, and the influence of the fourth industrial revolution may be greater than the previous three. sum.
From the perspective of capital markets, although the business model of blockchain companies is still unclear and the technology is not mature enough, the reason behind the stock's skyrocketing is that the capital market is optimistic about the application prospects of blockchain technology.
At that time, Internet-related stocks began to rise very early. At that time, Internet companies not only did not make money, but also burned money. It was probably in 2004 and 2005 that they began to make money. However, the logic of market estimation is different. Although it can be invested in Internet companies in three years, the price will be completely different and the overall environment will be different.
Since 1994, the US Internet company has exploded. But it was not until 1999 that mutual funds that made the Internet appeared. From 1994 to 1999, the Internet grew at a high speed in serious doubts. At the beginning, almost everyone was criticizing, and when the time was no longer criticized, the market structure has basically settled. Therefore, I think that companies that refuse to reform are bubbles. Of course, it is not recommended to participate in the blockchain.
The financial sector: In 2017, blockchain projects are booming. For investors, how do you identify really valuable blockchain companies?
Cai Weide: At present, some teams claiming to be blockchains are only using the results of research and development by others, such as using open source software to adapt this underlying technology. This is not innovative. When the market enters the stage of large-scale application, these "chains" can't be done because it has no scalability and the business cannot be opened. Such problems will occur in 2019 or 2020.
Compared with the development history of Internet companies in the past, companies worth investing have a strong technical background. Google's technology is very strong, and Amazon's cloud computing is particularly powerful. Many people think that Amazon is a bookseller. In fact, its biggest weapon is cloud computing. The number one cloud computing technology is not Google, but Amazon (although cloud computing is created by Google). The development of the blockchain is difficult, and it is destined to be a long-distance running. If a company does not have technical support, it will lack stamina in this long-distance running.
Which companies are not technical? For example, before selling shoes, suddenly became the Internet to sell shoes; originally sold books, and now use the Internet to sell books. Such companies have no technology. You can do this at the beginning, but it won't work in the later stages. Amazon is an example, from selling books to selling cloud computing. At the time, there were other companies selling books on the Internet, but they didn’t have the stamina because they didn’t have the technology.
Valuable blockchain companies are companies that can create technology by themselves, and of course business models and capital are also important.
Blockchain can reduce regulatory costs and is still in the experimental stage
The financial sector: At present, China's regulatory authorities have made several use of technology to improve the level of supervision and achieve the goal of using "machine cats" to grasp the "machine mouse". Then how is the application of blockchain technology in the regulatory field?
Cai Weide: In January 2016, the British published a white paper pointing out that the blockchain is a weapon of supervision. This triggered a wave of Regtech (regulatory technology). With the blockchain, the level of transaction supervision and asset supervision will be greatly improved. For example, banknotes generally have numbers on them, and blockchain technology can track the whereabouts of money based on numbers.
Of course, the above level of supervision can only be achieved if both parties to the transaction and government supervision use blockchain technology. In the field of blockchain regulation, no real practice cases have emerged, and most of them are currently in the experimental stage.
The financial world: Although the use of blockchain technology can achieve penetrating supervision, who will bear this cost?
Cai Weide: Blockchain technology itself can reduce costs, and the cost savings can cover the costs of the regulatory process. If the company uses blockchain technology, there is no need for manual auditing by the supervisory layer. Because in the blockchain, companies and regulators can share books, so supervision saves the cost of manual auditing.
There is a problem of regulatory fairness between companies that apply blockchain technology and those that do not. Regulators can solve this problem by charging the latter. At the same time, the use of blockchain can greatly reduce cheating, which will also significantly reduce costs.
Financial sector: Can you briefly describe the landing of your "sandbox plan"?
Cai Weide: “Sandbox” is a common computer technology used to test new technologies. It has a history of 30 years, and all the changes in the sandbox will not cause any actual damage to the system. Since the blockchain is a system that is always running, it needs to be monitored online after testing, so its sandboxing technology is different from other financial systems. Nowadays, there are too many false propaganda about blockchain transactions, and it is difficult to identify them on the technical level, and the “sandbox plan” is to solve this problem.
At present, the "Sandbox Project" has already landed in Lushan, Qingdao, and has received support from the Hong Kong government. Hong Kong has always attached importance to financial technology, but has never found an industrial sandbox that can be implemented. Now Hong Kong has only a “regulatory sandbox”, which is an administrative process and is not an executable sandbox tool.
The “Sandbox Project” will take a year to work with the local government and industry. Later, relevant standards will be formulated to determine which tests must be passed, and finally the tests will be placed on the industrial sandbox so that different projects can be Compare under the same standards.
(Source: Financial sector)