On November 8th, the “2019 World Blockchain Conference • Wuzhen” hosted by Babbitt was officially opened. The conference gathered more than 100 global blockchains, digital assets, AI, 5G experts and scholars, and technical geeks. Opinion leaders and founders of popular projects, with the theme of “application unbounded”, explored the application of blockchain, technology frontiers, industry trends and hot issues, and promoted blockchain technology and industrial innovation. (Conference live broadcast link: https://www.8btc.com/live/10 )
Cai Yunge, general manager of the blockchain business of Tencent, delivered a keynote speech on "Thinking about Digital Asset Infrastructure". The following is the full text of the speech:
Tencent did a self-developed blockchain project at the end of 2015. After the release of the Tencent Blockchain Solution White Paper in April 2017, we entered the application exploration phase of the entire scenario. As of today, we have also made some projects that we think are more valuable and have some influence. Recently, with the speech of General Secretary Xi Jinping, I feel that the blockchain has entered a new stage. What kind of impact will there be in this new phase? Here are some of my thoughts.
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The concept of blockchain application is breaking out. Where is the next breakthrough?
In fact, we will still look at what stage the entire blockchain is currently. We believe that the entire blockchain is still in the midst of a major outbreak of application concepts, especially with the country and the government's emphasis on the industry. We believe that it will start with different applications in many industries. Of course, there are many concepts. The early stages.
Share it, I like to see this picture. The curve in the picture is about what industries will be combined in the blockchain field, when will it appear, and at what stage. But we found that in fact, the blockchain has no bottlenecks in many scenarios, and the gateway and assistive technologies under the chain are the key, such as IoT devices, such as the traceability of high-value artworks we make, about jewelry. , the anti-counterfeiting of diamonds.
We have already noticed that there are already some well-known manufacturers in the market. When making diamonds, they can put the diamonds on a digital seal, and then the diamond certificate will not need paper, but the use of the area. Blockchain certificate. This is a very good innovation, but it depends not only on the blockchain technology, but also on the new technology like IoT, which actually functions as a link under the chain. For the development of these technologies, we believe that in the future is a key, they develop well, and the application of the blockchain will get better and better.
A few days ago, we also paid attention to the Hong Kong Securities Regulatory Commission's promulgation of the exchange compliance supervision program. In fact, this means that from the perspective of the Hong Kong government, it has also begun to pay enough attention to virtual digital asset transactions. Of course, if you want to get this license, you must do a lot of compliance actions, but it is good for the whole industry.
Tencent has had many explorations in the field of digital assets, such as supply chain finance. Supply chain finance is a very good scenario. It improves the efficiency of the entire asset and capital allocation. The blockchain plays a multi-level flow of assets, multi-party verification, and the prevention of one-stop multi-turn.
The head of the McDonald's supply chain once said this:
“The reason why we actively promote supply chain finance is to help our multi-level suppliers to obtain financing at a lower cost, so as to improve the stability of supply chain costs and ensure that we maintain a leading position in the industry.”
In fact, it should be said that more and more such head companies and core enterprises have realized the value of supply chain finance to it. This is not only cost-saving, but more importantly, it can maintain the health and stability of the entire supply chain. In 2017, when we were doing the Tencent blockchain exploration, we launched a micro-enterprise chain with our partners. Our platform has been running and has gained some experience.
Make blockchain invoices a true asset stream
Next is the blockchain invoice. I briefly introduce the latest data: blockchain invoices exceeded 10 million invoices, and the total price tax exceeded 7 billion. More than 7,600 companies were registered in Shenzhen, covering 110 industries.
When many people mentioned the blockchain invoice at the beginning, they would ask me a question. How much difference does this invoice compare to the traditional invoice? What value does it provide? While constantly explaining this to others, I feel that the core of the blockchain invoice is not only a truly very typical case, but also a case in which information is turned into an asset, and it transcends the transaction information and makes the entire transaction process real. It can be verified and made the bill truly become an asset.
Traditional electronic invoices are also a flow of information that can be copied and tampered with. But the blockchain's electronic bills are actually the flow of assets. From the issuance, confirmation, acceptance, and asset filing of assets, these things are very good models in blockchain invoices. Through blockchain technology, it is naturally non-tamperable and traceable.
- Asset life cycle supervision. The blockchain invoice is an asset on the chain issued by the tax bureau. The whole life cycle is on the blockchain, and all parties participate in it and complete the circulation.
- Flow information. When we use traditional paper or electronic bills as asset vouchers for supply chain finance, we need a lot of real-time work, contract, qualification and other verification work, and the cost will be higher.
- Circulating assets. When an invoice changes from a message to a digital asset, it actually transcends the transaction information, but hopes to verify the entire transaction process and verify that the ticket truly becomes an asset. Therefore, the bill is also in the process of data assetization.
DCEP accelerates compliance process
Recently, the central bank's digital currency DCEP is very hot. The central bank's director Mu has begun to introduce the concept of DCEP on various occasions, including Huang Qifan, vice chairman of the China International Economic Exchange Center. We believe that when the entire industry is doing various explorations in the early days, it has actually consciously and unconsciously taken a way out of information to the value of the Internet and the digitalization of information.
After the emergence of DCEP, this road will be more smooth. Here is an example. At the time of doing this supply chain finance, we found a problem. How should the split and transfer of supply chain financial accounts payable correspond to the actual flow of funds? In fact, the flow of funds is still the circulation of the banking system and the wealth communication system. Then you will find that because there is no currency here, although the blockchain is assetized, it still depends on the circulation of traditional funds, and it must be combined. This combination is a chain, a chain, and may be troublesome.
But if digital legal currency like DCEP appears, we think it will generate a very big boost when it is combined with some products like our supply chain finance. It is the chain closed loop that really completes the entire payment flow. I think this is very important. As we saw Huang Qifan, vice chairman of the China Center for International Economic Exchanges, DCEP is a new encrypted electronic money system based on blockchain technology, which makes the transaction dependence on the account greatly reduced, which is conducive to the circulation of the RMB and international Chemical.
Let's think about it further. After the launch of the DCEP-based smart contract, what effect does it have and what kind of imagination? What kind of subject will be open to? Is the bank still a third-party payment platform? What kind of ability? What kind of infrastructure is built? I think this is something that everyone deserves to think about. Therefore, I believe that the launch of DCEP will accelerate the smooth flow of digital assets in all walks of life.
Libra – the battle for the underlying assets of cryptocurrency
After talking about DCEP, Libra is also a topic we can't get around. We believe that Libra is essentially a battle for the underlying assets of a cryptocurrency, and compliance regulation is a sharpening stone.
1. Libra is still too central, but will promote the popularity of cryptocurrency
Libra is relatively central, but it promotes the popularity of cryptocurrencies. We can look at the picture on the left, this is the status quo. For the users of our current currency, if you want to speculate, you must remember the mnemonic of the wallet, which is very anti-user experience. So now there are not so many users of the entire blockchain, it is still a small group. But if Libra emerges, it will improve the user experience and greatly increase the use of cryptocurrencies, not just for investment and speculation.
2. The underlying assets are maintaining the traditional legal currency issuance system and are also maintaining the hegemony of the dollar.
But Libra's underlying assets are to maintain the traditional fiat currency system and also to maintain dollar hegemony. The underlying assets are anchored in French currency, which is similar in nature to the digital assets of supply chain finance and JPMCoin. It is an extension of the legalization of legal currency encryption and fully respects the distribution system of legal currency.
We can see that in the underlying assets of Libra, the dollar weight ratio will exceed 50%. When we compare the dollar's ratio of 40% to global pricing and settlement, we find that this 50% actually strengthens the monopoly of the dollar. So we feel that it is very normal for Germany to oppose Libra.
3, compliance road twists and turns, killing will change strong
The road to compliance is very tortuous, but I think that killing will become stronger, although seven will quit, but we see that there are 1600 candidates in the back.
From the perspective of the entire regulatory level, with the Financial Stability Board (FSB) as the consensus to regulate the global cryptocurrency, only Libra has entered the stage of deep learning, so we think it is worth continuing to pay attention.
The tide of DeFi looks beautiful, but lacks quality scenes and assets
Of course, we also saw that in the entire encryption world last year, like DeFi, it has caused everyone's hotspots. For example, the total number of DeFi locks has quadrupled. The whole loan is the most eye-catching application last year and the year before. However, we found that it is also limited, the application scenario is single, and most of them flow to the exchange, so it is urgent to develop high-quality scenarios and assets.
Although the amount of DeFi is small, it has advantages compared with CeFi, and it is complementary to competition. We are also concerned about CeFi, a very old industry, and open banking is something that has been done in countries around the world in the past few years. But when we went to study the open bank, we found that the so-called open bank is like this:
- For example, open channels can be used for OEM financial services, such as integrated investment management platforms;
- Open data & capabilities: such as joint risk control modeling, blacklist sharing.
In fact, the entire open bank is mainly driven by regulation and lack of innovation . It is initiated in Europe and is driven by regulation. The core purpose is to break the monopoly of big banks. In fact, its current innovative application scenarios are relatively small and lack bright spots.
If we go to see the open banks in China, the three-party payment innovation of many domestic banks has already entered the no-man's land, and many businesses have already surpassed overseas commercial banks. Domestic banks are directly connected by banks and enterprises, and we have long explored the opening of many scenes.
What kind of opportunities should the future digital banks look like? We believe that the possibility of integrating classical CeFi + DeFi will be an opportunity for new digital banking in the future.
With the advent of the legal digital currency we talked about earlier (such as Libra), I think it will help many assets speed up the digitalization process. In the process of accelerating this process, opportunities for new digital banks have come. Although it is a very old business, after the emergence of new technologies, combined with CeFi, DeFi will have different ways of playing, there will be some different innovative financial rules, we think is very much looking forward to.
With the arrival of digital law systems such as DCEP and Libra and stable coins, we believe that the new era of digital assets will come, which will have an immeasurable impact on the future financial industry.