Investor Perspectives | System, Order and Privacy Protection: Another Perspective on Blockchain

Author: Waterhouse Capital Partners Jiang pure

Source: Dong Tu Xi Mo (Public Number)

As the leaders of the country spoke at the learning meeting of the Central Political Bureau, the blockchain was in turmoil. But what is the use of the blockchain, and it seems that there is still a lot of controversy. As a VC practitioner who has always cared about this field, I also talk about my views. I hope that I can help everyone understand the significance of the blockchain in the moment.

Students in the technical circle said that the Bitcoin white paper is the "Bible" of the blockchain, which contains the essence of the blockchain. This makes sense, but it is not entirely correct. Because of a classic, there must be the imprint of the times and the scenes of the time. Only by advancing with the times and understanding the spirit can we continue to develop. The word "death" must be followed by "classic" word by word, which must not become the ideology of a modern society.

So what I said may be a blockchain from a different perspective.

The "order" attribute of the blockchain being ignored

When you mention the blockchain, people often think of "coin" and "decentralization", but in fact, the blockchain has another characteristic, that is, "order." In other words, the blockchain is the strongest technical means to date to ensure that a system and process are strictly enforced.

The implementation of the information system assurance process does not seem to be new. As long as the information system of the company has been experienced, the system can cure all the regulations and all the procedures with computer programs to help strictly enforce them. But the problem is that the general information system is a "centralized" system, the process can be adjusted, and the data can be changed into a fake. It is nothing more than letting the programmer change a few codes and update the database. In history, it has not been the case that the management has arranged to sneak the system or the data to profit from it.

In the blockchain system, with the help of technology, the entire data and institutional processes have become a system of mandatory covenants: they cannot be modified at will and enforced strongly.

Here you can expand it. The entire design of the blockchain technology system is a sophisticated design that takes advantage of the principles of cryptography and distributed computing.

In the space perspective, through a batch of computers to calculate together, using the principle of cryptography to authenticate each other, to ensure that everyone is executing the same set of code, and mutual verification, no one can change, the implementation results will be invalid.

In terms of time, each block is concatenated by cryptography, and a password sequence called Merkel is used to verify that the data is recorded—that is, the result of rule execution cannot be changed.

Want to change the system? No, when the code is released, the whole system is set. To change it, in fact, it is equivalent to building a new system. Everyone must agree and migrate the past. I don't even think about moving the data. The Merkel tree has all the data together, and there are copies made through a distributed database. It is not impossible to force a change, but the whole data is wrong. At first glance, it is a move.

Yes, this is the society of all order that the programmers of order are coming up with. Everything must be done according to the system. If it is not done according to the system, the scene will not be able to do it. Then, if the scene can't be done, would you secretly change the result after you have passed the limelight? Everyone will find it and it will be rejected by the whole system.

The blockchain system was originally designed to ensure the decentralization of the blockchain system like Bitcoin, ensuring that no one has the power over the entire system, and must comply with the system. If we change the system, we cannot change the results of the implementation of the rules. But this mechanism actually promotes "order" and ensures that the entire system operates on established rules in the "legal system" orbit of a certain sense. This is a key point to be discussed in this article.

The current dilemma of traditional blockchain

Here, by the way, the difficulties encountered by the traditional blockchain are currently encountered. The earliest blockchain, the third important pillar of Bitcoin, is the community and economic mechanism. In fact, Bitcoin itself is designed for the ideal of a currency. Bitcoin has designed a sophisticated internal economic system and incentives to encourage everyone to maintain the system's operation for their own "money-making" competition. Although a large number of blockchain projects in the future do not necessarily target the issue of currency, but because the operation of such blockchain system requires everyone to continue to pay resources such as computing power and bandwidth, the system can maintain it. If there is no material incentive and only a spiritual call, the sustainability of the entire system will be problematic.

Therefore, "tokens" are often associated with blockchains. If the currency is not traded or even hyped, it will not reflect the value, and it will not reach the original intention of attracting everyone to join the system. Therefore, the blockchain has to be mixed with "financial transactions" or even hype, thus causing subsequent follow-up. A series of results:

First, externally, “private money” such as Bitcoin involves the power to challenge governments. And it really has a good vitality, and gives you a benchmark case of “decentralization” and autonomous government system, which is not popular among governments. Although a large number of other "substitutes" do not necessarily define themselves as money, they have in fact become a kind of financial assets. The subsequent transactions and speculations have given rise to new issues in the supervision of various countries, and a large number of non-professional investors Incoming brings financial risks.

Second, from their own point of view, they have to admit that such a "code (program code) out of the law", "code is law" society, in fact, is also programmers, and even the current human beings can not hold. The concept of a human ideal society has been proposed by many people, but more than half of it is full of happiness, and it is a lot of trouble to practice. As the chief "keyboard man" programmer team is not much better, the simplest question is also the most heart-wrenching problem for all programmers: Do you dare to guarantee that the program does not have a bug?

As long as the program has a BUG, ​​it means that the law or rules of such an ideal society have BUG, ​​and the legal rules have BUG, ​​which is a big problem. Fortunately, the Bitcoin system is really good enough, and has not found any bugs, but its function is very simple, it is a sophisticated currency system. But I want to do more things in the blockchain, such as Ethereum, it is basically a history of bloody tears of BUG: I have not said many times in the past, just in the BUG incident last April, I put a bunch of Ethereum based. The ERC20 coin has been scaled and cleared. It also includes the famous currency suspected of an Internet platform. The market value loss on the surface is calculated to be hundreds of billions of dollars.

Therefore, the pressure of external supervision, and the internal cost of the blockchain exploration, make the development of the blockchain ups and downs, twists and turns. But with so many problems, it can still make governments reluctant to completely kill them, and they have not been tossed by themselves. It also shows that the "order madness" characteristic of the blockchain is actually very valuable.

Alliance chain and new direction

So people put forward the "chain of alliances." The alliance chain can be thought of as a simplified version of the original blockchain, most of which is to position it as a blockchain that is used purely within the organization. In this case, the motivation for joining the blockchain system does not need to be considered. The task of organizing the assignment, the incentive is naturally solved by the original system of the organization, so this "substitute currency" no longer becomes necessary. . In addition, some technical things, such as the consensus mechanism, will be simplified, thus opening up space for the efficiency of blockchain execution. This alliance chain has also become the so-called "no-coin" blockchain. This is probably the main direction of current state encouragement.

Of course, in the blockchain fundamentalists, this blockchain will be “castrated” and no longer a thing that can build an ideal society. But this is not a national consideration.

Under the "chain of alliances" system, the original idea of ​​"decentralization" does not exist, what is left? That is the "order" system established based on the strict cryptography system to ensure the "decentralization" system.

That is why the blockchain is a technology about "production relations."

Blockchain and social governance, data governance

Therefore, the blockchain has been promoted by the state today, mainly to play the role of the blockchain in safeguarding "order" and "institution".

The cryptographic-based Merkel tree completely concatenates the entire blockchain data, making it impossible to modify midway. Even if you have made a private chain in your own home, it is completely on your own computer. When you suddenly think about changing one of the data, it is a big deal. It is necessary to re-do the entire chain from beginning to end. Once again, especially if the amount of data is large enough, it will become an extremely difficult thing. What's more, the real blockchain system also includes a distributed database, and other backups can prove your illegal modifications.

It is conceivable to apply the idea of ​​the blockchain Merkel tree to the generation and circulation of various types of data. The data is interlocked to ensure the strict tracking of data, which is of great significance to the information society today. Even if the data is not guaranteed to be completely accurate, it can guarantee effective accountability afterwards.

As an example, VAT is linked to the data, greatly increasing the cost of tax evasion. Such system design, if coupled with the support of data technology such as blockchain, will become a powerful weapon for social governance under the support of data governance.

We are familiar with the various blockchain applications, such as origin traceability (tracking the certificate of origin and product circulation), supply chain finance (certifying the authenticity of the endorsement of commercial endorsement), logistics applications (tracking the direction of goods) including poverty alleviation The tracking of charitable donations (tracking the use of funds), etc., is just a small test. The whole society uses the same set of national rules, and is completely locked in technology. There will be no implementation deviations and private changes. This is a big deal. It can also solve data quality problems for the entire country in the future on the road of big data applications.

If the data is chained, cryptography can be used to ensure the quality of his data. The only remaining problem is the correspondence between the data and the real world, that is, the authenticity of the data before it is placed on the blockchain. The blockchain cannot be directly guaranteed. It is necessary to extend the management area of ​​the blockchain through the Internet of Things, etc., in order to complete the closed loop of the entire scenario. By then, the power of the blockchain will be even greater.

In addition to the data, there are programs. The "code is the law" that blockchain believers said is actually partially realized today. Where we use the IT management system, we often hear the words: "This system can't be recorded." of". The IT system, as the carrier of the rules and regulations, has gradually assumed the responsibility of "law" in reality. But as I said before, the IT system can be changed in the background, and even cheated. The introduction of the blockchain system will make the modification of the program difficult and easy to be discovered, thus enhancing the seriousness of the implementation of this normative law. This feature of the blockchain ensures that he can be the perfect technical tool for institutional execution. This is actually in line with the direction of "ruling the country by law."

Blockchain and the next wave of technology

Speak a little further, we can use it on "artificial intelligence."

If you take the rules to restrict people, you may still think a little more. But to take the rules to control the machine or artificial intelligence, it must be everyone's favorite. Just now everyone is angry and afraid of artificial intelligence, and likes its ability, and fears that it is too powerful for what we don’t want to see, or someone who uses it to do what we don’t want to see. . This is exactly the right thing.

In fact, we can now notice that the development of this new wave of technology has actually changed with the previous wave. For example, the hottest 5G on the technical turmoil, the construction of this system is actually not for people, but for "non-human" things. Higher bandwidth (eMBB), more access (mmtc), more real-time network (urllc), the three 5G features, the latter two actually have nothing to do with people, even the first one, everyone Looking at the video with 4G has been very good, what is the use of higher bandwidth? Many people have therefore questioned that 5G is also a "technical bubble" that is of no use.

As everyone knows, the logic of technology is already changing.

These things are actually used for smart devices, or "Internet of Things." They have to generate and transmit huge amounts of data, and there will be huge numbers that require real-time connections (such as car networking). Of course, the development of technology ultimately serves people. The Internet of Things is ultimately the service provider. However, in this case, the relationship between the communication network and people begins to become indirect. We cannot use the intuitive personal perception to judge and perceive the communication network. The logic of such technical system construction.

The same is true for blockchains. Although there are various problems in human society, the use of "objects" and the use of intelligent machines is very valuable. Our future artificial intelligence will not be a completely centralized "national brain". It will be composed of intelligent nodes distributed in various places, large and small. It is impossible to handle all the central nodes in the computer room. Things, the computer in the car, our mobile phone, the chip on our wearable device, the PLC on the industrial control system (this term is outdated, saying that it is a node like this in the future), these IoT nodes will each bear different Artificial intelligence work. Together they are the artificial intelligence that is truly provided to society. And ensuring that they are organized according to established rules, processes, and methods is where blockchain ideas and technical tools can make a difference.

There is an interesting place: in the era of the Internet of Things, our database will also undergo new changes. A new form of database organization: a time series database can be a very important direction. The characteristic of the time series database is that the data is organized by time, and it is continuously extended. Students who are familiar with the blockchain will immediately find out that this is not the organization of the blockchain. So the blockchain and the Internet of Things are a pair of natural good friends. In the midst of self-satisfaction, 5G, Internet of Things, blockchain, the organization of these things, we are actually for the arrival of an orderly and safe artificial intelligence society.

Of course, in the future, artificial intelligence-Internet of Things has the computing power of each node. It is impossible to work according to the assumption of peer nodes like the current blockchain. This is where the blockchain design needs to be further developed and developed. But to ensure that his core execution logic is not changed, the core data will not go wrong or the error will be easy to check, to ensure that local errors will not spread to the global, this is where the blockchain can work. It can even be said that the artificial intelligence-Internet of Things system lacking the idea of ​​blockchain has great risks. Only the introduction of blockchains to hedge against technical means can avoid artificial intelligence from intentional or unintentional loss of control.

A large part of this hedging will be reflected in data governance. Because data is the "fuel" of artificial intelligence, artificial intelligence can't work without data, so controlling data largely controls artificial intelligence. (Even so, according to the von Neumann system still in effect today, the program code is also a kind of data – this topic will not be expanded)

Therefore, in the future artificial intelligence-Internet of Things, the blockchain will inevitably take on a greater responsibility. It can be said that the corner of the blockchain is lacking, and the next wave of technology is incomplete.

Blockchain expansion and frontier

In fact, you can think of it a little further. We know that the cryptographic principle used in the blockchain has such a good effect because it widely uses a method called asymmetric encryption, which means that the encryption can be verified very simply by a means. Sex without revealing the original key. This is part of the so-called "zero knowledge proof" in mathematics. To take this idea a step further, we will think: Can we use this idea to "protect" our privacy and make our data more secure?

At present, in the era of big data, while enjoying the convenience brought by data, our biggest pain is the uncontrollability of data leakage. We can't prevent our network operators from completely ignoring our data, nor can we prevent BAT and TMD from doing the Internet software we use every day. We don't know our data, and we will definitely agree. Some software uses our data to make it easier for us, but we definitely don't want it to be used where we don't want to use it. But the pain of information is that once you share or authorize it, you don't have control. You may be copied a lot, and you will be in the hands of someone you don't know. In the end, you may infringe on us. Now that Europe has a GDPR, China has used severe laws to combat the illegal use of data, but these can only be dealt with afterwards and shocked, and it is impossible to completely prevent such a thing from happening. But if one day, there is a good thing that both fish and bear's paw can have, we can enjoy the convenience brought by the data, and can eliminate the bad things caused by the uncontrolled leakage of data. Isn't that the ideal society in the era of big data?

This is done in the blockchain. Each node has its own key ("private key"), but when you verify the key, you don't need everyone to know the private key. Otherwise, the encrypted data can be forged. . It uses a public key that knows exactly which node's private key is encrypted by this node, but does not need to know the private key.

This kind of thinking has brought a dawn to everyone. In theory we can find a mathematical method: we can let the Internet giants analyze our individual needs, we also provide our information, but the information is encrypted, and the information is put into a computing system. The giants can get what we want in this service, but the giants don't know who we are, the raw data, the only thing we might want, and the perfect personalized service. After that, everyone will forget about the rivers and lakes, and our information will not be leaked or recorded. Of course the giants can record an anonymous statistic to improve its services.

The core technology here is homomorphic encryption, or a further extension called multi-party secure computing (MCP). This can be considered an extension of the blockchain – of course, cryptographers will not agree. The blockchain in the eyes of cryptographers is just one of the engineering applications of cryptography.

Another direction that needs to continue to be studied in the blockchain field is the formal verification of code. This solves the bug in the code. Although our software industry has become accustomed to living with bugs, as mentioned earlier, the "seriousness" of blockchain code is more demanding, because if it really works for a day, the code describes the rules – data governance And the rules of social governance. Therefore, it is better not to have a BUG, ​​and it is best not to have a BUG. This is also required to help mathematics – a mathematical method called formal verification can help verify the logic of the code and prevent the occurrence of bugs. Of course, this is another problem that is not easy.

The theoretical basis of the blockchain is based on mathematics, and its hard bone problem also needs to make a breakthrough in mathematical research.

Routine summary

To sum up, the blockchain advocated by the current state mainly uses the role of the blockchain in the rigid implementation of the guarantee system and the rigid landing of data quality. What is advocated is a technique about “order” that helps to establish a more regulated governance system for the information society. Blockchain practitioners need to recognize this situation.

In the long run – of course, this is more of my personal interpretation – the blockchain has evolved, and it can also be a technology used to "protect" our privacy in the world of big data.

One more thing…

This is often the case with the development of technology, and the ultimate use is not based on human will. The earliest invention of the blockchain was to maintain an anarchist Utopia, but after being rearranged and combined, it could also become a weapon for a government to effectively manage the society and become an effective means for mankind to manage artificial intelligence in the virtual digital society in the future. Therefore, research and practice on the principles of engineering and cryptography may create more possibilities for the future. This is the interesting part of the history of human science and technology, and it is worth looking forward to.