Interpretation | Political Bureau set, blockchain industry welcomes gold development

Author: Song Jiaji

Source: Ji Shi Communication

Summary

Event summary:

On the afternoon of October 24th, the Political Bureau of the CPC Central Committee (hereinafter referred to as “Political Bureau”) conducted the 18th collective study on the status quo and trend of blockchain technology development (Report Note: The number of times here refers to the 19th National Congress, if there is no note Ming, the same below). In his study, General Secretary Xi emphasized that the integrated application of blockchain technology plays an important role in new technological innovation and industrial transformation; we must use blockchain as an important breakthrough for independent innovation of core technologies, and clarify the main direction of attack. Great investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation. Chen Chun, a professor at Zhejiang University and an academician of the Chinese Academy of Engineering, explained the issue and discussed opinions and suggestions.

Blockchain collective learning emphasizes two major requirements, three major scenarios, and three major guarantees. In this collective study, General Secretary Xi Jinping put forward higher requirements for the development of China's blockchain: 1. In terms of international competition, we must strive to let China take the leading position in the emerging field of blockchain and occupy the commanding heights of innovation. , to obtain new industrial advantages; to enhance the right to speak internationally and rules; 2, domestic social governance, to play a role in the blockchain to promote data sharing, optimize business processes, reduce operating costs, enhance synergy efficiency, build a credible system, etc. The role of, for example, to promote structural reforms on the supply side, to achieve effective docking of supply and demand in various industries; to accelerate the transformation of new and old kinetic energy, and promote high-quality economic development. General Secretary Xi Jinping also mentioned some specific scenarios, such as financial scenarios, difficulties in financing loans for SMEs, difficulties in bank risk control, and difficulties in departmental supervision. In the livelihood service scene, the people are provided with smarter, more convenient and more High-quality public services; improve the level of intelligence and precision of urban management; ensure the orderly and efficient flow of production factors within the blockchain; and maintain and utilize government data across departments and regions in the government affairs scene.

Blockchain positioning has changed beyond expectations, with short-term, medium- and long-term impacts. Previously, the market positioning of the blockchain was rather vague, and even considered "non-mainstream", and the impact of this blockchain new deal can be summarized into three points:

1) From the discussion of various ministries and committees to the unified positioning of the Politburo;

2) From the grassroots technology innovation of geeks to the breakthrough of national independent innovation;

3) From the isolated application scenario to improve the ability of comprehensive social management. It has pointed out the direction for the development of the blockchain industry in the future. In the short term, it clarifies social cognition and corrects industrial bias. In the medium term, it encourages industrial capital and talents to enter, regulates industry supervision; promotes social governance in the long term, and promotes 5G traffic growth in science and technology. The underlying protocol architecture for networking and edge computing.

The blockchain business model gradually evolved into BaaS. The market is worried that the blockchain business model is not mature, and we will evolve to BaaS services as the business moves and the regulation is clear. We simply divide the blockchain business model into two types: commodity sales and financial asset issuance. The first major category, the sale of goods. Regardless of whether the user has purchased the assets on the blockchain (hereinafter referred to as “tokens”), the user in this model pays the legal currency for consumption (such as purchasing chain storage space or under-chain system development BaaS service) instead of generation The appreciation of the currency. The second major category, the issuance of financial assets. Users in this model only want to buy tokens at a higher price in the future, that is, for investment needs, and in some cases such assets have securities attributes.

Grasping the three main lines of finance, people's livelihood and government affairs. We recommend the following three blockchain companies on the main line. 1. Financial services. (1) Supply chain finance: easy to see shares, Hailian Jinhui; (2) financial technology: Quartet Jingchuang; (3) financial security, blockchain asset hardware storage: Weishitong, Feitian integrity. 2. People's livelihood services. (1) Electronic invoice, payment: Donggang shares, Guangdian Express; (2) Electronic certification: digital certification; (3) Copyright service: Anne shares. 3. Government affairs scene: Huayu Software.

Risk warning: Blockchain technology development is not up to expectations; blockchain business model is not up to expectations.

1. The Political Bureau collectively learns, and the blockchain becomes the core technology independent innovation breakthrough. On the afternoon of October 24, the Political Bureau of the CPC Central Committee (hereinafter referred to as “Political Bureau”) conducted the 18th collective study on the status quo and trend of blockchain technology development. (Report Note: The number of times here refers to the 19th National Congress, if not stated, the same below). In his presiding study, General Secretary Xi Jinping emphasized that the integration and application of blockchain technology plays an important role in new technological innovation and industrial transformation; we must use blockchain as an important breakthrough for independent innovation of core technologies, and clarify the main direction of attack. Great investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation. Chen Chun, a professor at Zhejiang University and an academician of the Chinese Academy of Engineering, explained the issue and discussed opinions and suggestions.

Previously, on May 28, 2018, General Secretary Xi Jinping made an important speech at the 19th Academician Conference of the Chinese Academy of Sciences and the 14th Academician Conference of the Chinese Academy of Engineering, blockchain and artificial intelligence, quantum information, and mobile. Communication and the Internet of Things are listed as representatives of next-generation technologies.

We believe that the reason for launching the blockchain new deal at the current point in time is three reasons:

1) Policy orientation

The open and transparent technical characteristics of the blockchain itself are important tools for improving the ability of social governance. It has a unique role in solving the problems of precision poverty alleviation, difficulty in financing small and micro enterprises, and opening up data islands.

2) Technology orientation

Under the background of Sino-US trade friction, any technology track should not be ignored. Blockchain technology is gradually recognized as an important part of the next generation of information technology;

3) Regulatory orientation

Previously, the blockchain development in China was uneven. After a period of rectification, it has improved. At present, the Ministry of Industry and Information Technology has launched two phases of filing, and it is expected that it will continue to advance, and supervision is for better development.

1.1 Two major requirements, three major scenarios: the right to raise rules for external promotion; the internal financial, people's livelihood, government affairs scene

In the collective study of the Politburo, General Secretary Xi Jinping put forward higher requirements for the development of China's blockchain:

1. In terms of international competition , we must make efforts to make China's blockchain, the emerging field, at the forefront of theory, occupy the commanding heights of innovation, gain new industrial advantages, and enhance the right to speak and rule in the world;

2. In terms of domestic social governance , it is necessary to play the role of blockchain in promoting data sharing, optimizing business processes, reducing operating costs, improving synergy efficiency, and building a credible system, for example, creating convenient, efficient, fair competition, stable and transparent. Business environment; promote supply-side structural reforms, achieve effective docking of supply and demand in various industries; accelerate the transformation of new and old kinetic energy, and promote high-quality economic development. General Secretary Xi Jinping also mentioned some specific scenarios, such as

In the financial scenario, it is difficult to solve the problem of financing loans for SMEs, difficulties in bank risk control, and difficulties in departmental supervision;

In the scene of people's livelihood , provide more intelligent, more convenient and better public services for the people; improve the level of intelligence and precision of urban management; and ensure the orderly and efficient flow of production factors within the blockchain;

In the government affairs scene, the government data will be maintained and utilized across departments and regions to bring better government service experience to the people.

It is worth noting that General Secretary Xi Jinping also emphasized the security requirements for the development of China's blockchain:

1. Strengthen the guidance and regulation of blockchain technology, strengthen the research and analysis of blockchain security risks, closely track development trends, and actively explore development laws.

2. It is necessary to explore the establishment of a safety guarantee system that adapts to the technical mechanism of blockchain, and guide and promote blockchain developers and platform operators to strengthen industry self-discipline and implement safety responsibilities.

3. Implement the rule of law network into the management of blockchain and promote the safe and orderly development of blockchain.

1.2 Three major safeguards: research, market, talent  

General Secretary Xi Jinping also proposed a number of safeguards to achieve the above objectives in the collective study of the Politburo. For example,

1. Research and technical support: strengthen basic research; promote collaborative research and accelerate breakthroughs in core technologies;

2. Ecology and market support: build an industrial ecology and give play to market advantages;

3. Talent support : Strengthen the construction of talent team, establish and improve the talent training system, build a variety of high-level talent training platforms, and cultivate a group of leading figures and high-level innovation teams.

Previously, the market positioning of the blockchain was rather vague, and even considered "non-mainstream", and the impact of this blockchain new deal can be summarized into three points:

1) From the discussion of various ministries and committees to the unified positioning of the Politburo;

2) From the grassroots technology innovation of geeks to the breakthrough of national independent innovation;

3) From the isolated application scenario to improve the ability of comprehensive social management.

The New Deal has pointed out the direction for the development of the blockchain industry in the future. In the short term, it clarifies social cognition and corrects industrial bias. In the medium term, it encourages industrial capital and talents to enter, regulates industry supervision; improves social governance in the long run, and promotes 5G traffic growth in science and technology. The underlying protocol architecture for the Internet of Things and edge computing.

2. Where is the blockchain the same as the artificial intelligence, big data strategy, and network power strategy? Where is it different?
2.1 The same thing: once a year; attach importance to grab the global high point of science and technology innovation, promote industrial development and social governance; pay attention to prevent risks   Frequency, once a year. We noticed that in 2016, the Politburo first conducted collective learning on network information technology. General Secretary Xi Jinping proposed to firmly hold the core technology of independent innovation, and to break through the cutting-edge technology of network development and the key core of international competitiveness. Technology, accelerate the promotion of domestic independent controllable alternative plans, and build a safe and controllable information technology system. Since then, in the second half of each year, the Politburo will conduct collective learning on at least one network information technology. The technologies selected in 2017 and 2018 are big data and artificial intelligence. In terms of purpose, external attention is paid to seize the commanding heights of global science and technology innovation and promote industrial development and social governance. The 2018 Politburo collective learning and the previous ones all mentioned the fiercely competitive external environment, which reflected the political bureau's high regard for the new generation of technology and its firm determination to seize the commanding heights of global technological innovation competition. Moreover, these several collective studies emphasize the contribution of technology to industrial development, social governance and people's livelihood. Referring to the driving effects of previous collective learning, we believe that the blockchain is considered as the core technology and is bound to promote China's block. The chain industry has further flourished, and the level of social governance and people's livelihood and government science and technology has been further improved.

Pay attention to risk prevention. Consistent with the collective learning of the previous Politburo, this blockchain collective study attaches importance to the prevention of risks, attaches importance to the rule of law and strengthens research.

2.2 Differences: the first financial and business environment

Different from the previous Politburo collective learning, we noticed that the blockchain collective learning for the first time proposed that technology should help financial development and business environment, which reflects the political situation of the political bureau and the improvement of the business environment. Highly valued. The relevant expression is: the application of blockchain technology has been extended to digital finance, Internet of Things, intelligent manufacturing, supply chain management, digital asset trading and other fields; solving the problem of financing loans for SMEs, difficulties in bank risk control, and difficulties in departmental supervision Create a convenient, efficient, fair competition, stable and transparent business environment; use blockchain technology to promote greater interoperability between cities in terms of information, capital, talents, and credit information.

3. Case Study: Blockchain application focusing on financial, people's livelihood and government affairs scenes
In 2009, the cryptocurrency Bitcoin went online, and its market value has exceeded $1,732 million (2019.10.26). During the period, the blockchain as the underlying technology of Bitcoin has received increasing global attention. According to public information, the blockchain is a publicly visible book that records the historical information of the transaction. The basic model is that when a new asset transaction is created, the asset transferee needs to prove itself by a signature script. The legal user of the asset, and specifies the output script to restrict future users of the transaction (ie, the asset earner). If it is legally created and signed, the transaction is now valid and it will be broadcast to the blockchain. The network is transmitted and each node receiving the transaction will first verify the transaction, ensuring that only valid transactions will be propagated across the network, and invalid transactions will be discarded at the first node until the arrival of mining Node (Report Note: Mining refers to the acquisition of the chain assets – cryptocurrency rewards, participation in accounting). The blockchain makes it difficult to tamper with the data on the chain, so that the participating parties can complete the value transmission without trusting each other and make it research and application by governments, enterprises and individuals. On June 18, 2019, US Internet giant Facebook announced the joint release of Libra, a blockchain-based cryptocurrency by 27 institutions, which set off another wave of attention to the blockchain. As mentioned in the Political Bureau's collective learning materials, finance, industrial services, and people's livelihood/government affairs are the most promising scenarios for blockchain service companies. The two batches of blockchain information service filings issued by the National Internet Information Office (Netcom Office) also reflect this to a certain extent.

3.1 “Blockchain+Finance” case: easy-to-see block

Based on the alliance blockchain platform, it is expected to effectively solve the financing difficulties of the SMEs in the supply chain industry and the high cost of trust. According to the data of the Prospective Industry Research Institute, it is expected to grow to 15 trillion yuan in 2020. Supply chain finance can inject capital into upstream suppliers, improve the operational efficiency and overall competitiveness of the supply chain, and is of great significance for activating the supply chain.

The financing model of supply chain finance mainly includes accounts receivable financing, confirming warehouse financing and financing through financing. Under the traditional supply chain financial business model, there are two main pain points: the 1+N circulation of core enterprise credit and the verification of the authenticity of trade background. Blockchain technology can achieve credit penetration in the supply chain financial system, and solve the problem of financing difficulties and financing for secondary supplier distributors. The blockchain plays two roles in it, firstly the core enterprise confirmation process; secondly, it proves the true validity of the creditor certificate circulation. In this trusting ecology, the core enterprise's credit (tickets, credit lines or payables confirmation rights) can be converted into digital warrants, and the risk of compliance can be prevented through smart contracts, so that credit can be effectively transmitted along the supply chain, reducing cooperation costs and improving Performance efficiency. More importantly, when the digital warrants can be anchored in the chain, it is expected to realize the splitting and circulation of funds from upstream and downstream enterprises through smart contracts, greatly improving the speed of funds, and solving the financing difficulties and financing of SMEs. The problem.

Supply chain trading companies are actively “winding up”. The Ministry of Industry and Information Technology "2018 China Blockchain Industry White Paper" analyzed four supply chain financial platform cases including Tencent Blockchain, Easy View Shares, Financial Accounts and Zheshang Bank. Based on the real trade background of supply chain, blockchain The technical characteristics make the upstream and downstream parties in the supply chain actively “wind up”. The “Easy Block” supply chain financial application system developed by Yijian Co., Ltd. based on blockchain technology was launched in April 2017. The system is centered on the “core enterprise+, controllable commodity+, dynamic asset ABS+” scenario. Manufacturing, pharmaceutical, logistics, bulk, aviation, real estate and other nearly 10 industries and more than 10 financial institutions. The “Easy Block” platform can realize the five functions of “trade portrayal, transaction visualization, credit machine, direct connection between banks and enterprises, privacy protection”. The “Easy Block 2.0” system has created a traceable supply chain financial service plan. Focus on solving data trust and financial risk issues in supply chain financial scenarios. As of October 26, 2019, the “Easy Block” supply chain platform has completed nearly 176,000 trusted transactions, with over 15 billion trustworthy transactions and 419 financing contracts on the chain, with a financing amount exceeding 4.7 billion yuan. Through the online system of “Easy Block”, the real trading background of the two parties in the transaction is recorded and characterized in real time. Based on the huge and real trade background of suppliers, upstream and downstream enterprises urgently need a technology platform such as blockchain to solve the industry pain points. Enterprises are actively embracing the blockchain situation.

3.2 “Blockchain+Minsheng Service” Case: Tencent Blockchain Electronic Invoice

On August 10, 2018, the country's first blockchain electronic invoice was implemented in Shenzhen. Under the guidance of the State Administration of Taxation, the blockchain electronic invoice was implemented by the Shenzhen Taxation Bureau and Tencent Company. It is the first research result of the “blockchain+invoice” ecosystem application in the country. As of August 10, 2019, Shenzhen blockchain electronic invoices have been issued more than 6 million, more than 5,300 companies have registered to use blockchain electronic invoices, including China Merchants Bank, Ping An Bank, Weizhong Bank, Taiping Insurance Wal-Mart, Baiguoyuan, NUS Pharmacy, Shenzhen Metro, Shenzhen-Hong Kong Taxi, West Lake Taxi, Vanke Property, Country Garden and many other large-scale key enterprises.

In line with market pain points, the alliance chain is rapidly exerting its strength and accelerating its popularity. On March 18, 2019, the country's first rail transit blockchain electronic invoice was opened at the Futian Station of Shenzhen Metro, officially announcing the electronic invoice function of the Shenzhen Metro's bus code on the blockchain. Guangdian Express participated in the docking and payment of the Shenzhen Metro to the Shenzhen Inland Revenue Bureau blockchain electronic invoice system. From now on, users will use Tencent's smart transportation products to take the Shenzhen Metro, and they will be able to open blockchain electronic invoices online. In addition to the Shenzhen Metro, taxis, airport buses and other traffic scenes simultaneously feature online blockchain electronic invoicing. After the end of each trip, the Shenzhen Metro Passenger Code can be invoiced by the relevant prompts on the WeChat Payment Deduction Voucher page. As of 20:17 on March 18, the number of electronic invoices issued by users through the block code has exceeded 10,000. Song Lingyun, general manager of Tencent Smart Transportation, said: “The blockchain electronic invoice is a convenient and environmentally friendly new service for Shenzhen Metro access codes. Users can invoice, and the electronic collection of tickets is improved. The smart travel experience has been improved.” The Shenzhen Metro will issue about 160,000 paper invoices per day. After the blockchain electronic invoice is put on the Shenzhen Metro ticket code, it will effectively alleviate the inconvenience of large invoices and paper invoices.

3.3 "Blockchain + Government Affairs" Case: Beijing Internet Court "balance chain"

Beijing completed its first decision to use blockchain deposit certificates, and the power of blockchain electronic deposits appeared. On April 9, 2019, the Beijing Internet Court's first judgment using the "balance chain" evidence was released. The case involved copyright infringement and the blockchain electronic deposit certificate was the key evidence of this judgment. As of April 11, Beijing Internet Court “Tianping Chain” collected nearly 3.6 million online data, corresponding evidence files or 657 million online evidence verification data. There are 58 cases involving evidence of the balance chain in the Beijing Internet Court. Due to the powerful “power” of the “balance chain”, the electronic evidence disputes of related cases are very small, and more than 40 pieces have been successfully mediated or withdrawn. Due to the characteristics of volatility, easy change and no trace, the electronic evidence is difficult to obtain, difficult to obtain evidence, and difficult to identify. Therefore, on September 9, 2018, the Beijing Internet Court built the first e-evidence open ecological platform, the Tianping Chain, which was established by the Internet court and actively participated by all parties in the industry, to solve the problem of e-evidence and difficulty in obtaining evidence. Identify difficult issues. The power of blockchain technology or the weapon to solve the pain points of electronic deposits has begun to appear.

The combination of regulatory assistance and market demand promotes a new experience in government service. Article 11 of the Provisions of the Supreme People's Court on Several Issues Concerning Internet Trial Cases, which was implemented on September 7, 2018, states: "Electronic data submitted by the parties, through electronic signature, trusted time stamp, hash value check The technical means of collecting, fixing and tamper-proofing evidence such as blockchains or through electronic evidence collection platform certification can prove its authenticity, and the Internet court should confirm it." This is the first time the Supreme People's Court has conducted blockchain technology. The authenticity of the electronic data of the deposit certificate is interpreted judicially, and the legal effect of the blockchain deposit is further confirmed. Blockchain encryption and non-tamperable technical features are precisely the pain points in government and social services; the blockchain-based government system will bring more convenience and efficiency, and enhance the government service experience.

4. Discussion on blockchain business model: Selling ordinary goods or financial assets?
According to the different attributes of the products sold, the blockchain business model can be divided into two types: commodity sales and financial asset issuance. The first major category, the sale of goods. Regardless of whether the user has purchased the assets on the blockchain (hereinafter referred to as “tokens”), the users in this model pay the legal currency for consumption (such as purchasing chain storage space or chain system development services) instead of tokens. appreciation. This model is pure blockchain technology services. The second major category, the issuance of financial assets. Users in this model only want to buy tokens at a higher price in the future, that is, for investment needs, and in some cases such assets have securities attributes. This model has certain financial attributes.

Investment Advice
In combination with the collective learning spirit of the Politburo and the filing of information services for the blockchain chain information, we recommend the following three blockchain service companies on the main line. 1. Financial services. (1) Supply chain finance: easy to see shares, Hailian Jinhui; (2) financial technology: Quartet Jingchuang; (3) financial security, blockchain asset hardware storage: Weishitong, Feitian integrity. 2. People's livelihood services. (1) Electronic invoice, payment: Donggang shares, Guangdian Express; (2) Electronic certification: digital certification; (3) Copyright service: Anne shares. 3. Government affairs scene: Huayu Software.

risk warning
The development of blockchain technology is not up to expectations; the blockchain business model has fallen short of expectations.