People's Daily Online: How do countries welcome the advent of the blockchain era?

Author: Deng Wei, Zhang Yue, Shi Wei, Li Mu Hang, Wang Quan arrogance, Jia Wenting, seed Lu Yi (intern)

Source: People's Daily Online-International Channel

Blockchain is an invisible and intangible virtual technology, but it has enough power to subvert the times. Its value not only lies in supporting virtual currency along the way, its impact is overflowing the financial and scientific and technological fields, presenting an era of reshaping the world, and is even expected to lead humans from the information Internet to the Internet of Value.

On October 24th, the Political Bureau of the CPC Central Committee conducted the eighteenth collective study on the current status and trends of blockchain technology development. General Secretary Xi Jinping emphasized when conducting the study that the integrated application of blockchain technology played an important role in new technological innovation and industrial transformation. We must regard blockchain as an important breakthrough in independent innovation of core technologies, clarify the main attack direction, increase investment, focus on overcoming a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.

Having blockchain technology can change the world, and all countries are looking forward to seizing the opportunity in the blockchain era.

Countries raise blockchain to national strategic heights

The blockchain-based global industry revolution based on the technological revolution is sweeping across industries, and countries have raised the blockchain to national strategic heights.

On July 9, 2019, the U.S. Senate Business, Science, and Transportation Committee approved the Blockchain Promotion Act. The bill explicitly requires the US Department of Commerce to establish a standard definition of "blockchain" and a new legal framework to provide guidance and prevent risks for the application of emerging technologies in the future. The "Blockchain Promotion Law" has the support of both parties, which proves that members of the two major political parties in the United States recognize the value that blockchain technology can bring to the United States and the rest of the world, whether by preventing tax fraud, Eliminating bureaucracy or reducing waste, and how to use technology to reduce regulatory uncertainty.

After the "Blockchain Promotion Act" was promulgated, US Secretary of Commerce Wilbur Ross established a blockchain working group within the Department of Commerce. The working group was composed of members of the federal agency "cross-sector" Representatives of industry interest groups, academic institutions, non-profit organizations, and consumer advocates related to blockchain technology. Their task is to submit a report to Congress within one year of the enactment of the Blockchain Promotion Act. The report will include suggestions for the definition of "blockchain technology" and suggest potential applications in the study of distributed ledger technology, including the application of blockchain technology that can improve the efficiency of US federal agencies.

The German federal government pointed out in the blockchain strategy that blockchain technology is the cornerstone of the future Internet, and Germany will further consolidate its leading position in this field. To this end, the federal government has formulated guiding principles and roadmaps for the implementation of blockchain strategies.

The German government has stated that it will implement management policies aimed at promoting investment, unleashing innovation, maintaining stability and enabling inclusive growth, in line with the federal government's sustainable development goals. The specific implementation principles of the German blockchain strategy include 10 items including promoting innovation, promoting investment, ensuring stability, and strengthening sustainability.

In order to seize the opportunities brought by blockchain technology and realize its potential, the German government plans to take measures in five areas by the end of 2021. Key measures in various fields include: 1. Ensuring stability and stimulating investment: Blockchain technology in the financial field; 2. Incubating innovation: Promoting the construction of various projects and physical laboratories; 3. Open investment: Clear and credible framework conditions 4. Technology application: digital management services; 5. Information dissemination: knowledge, communication and cooperation.

The Australian Federal Government has made a number of investments in blockchain technology, including investing $ 700,000 in digital transformation agencies in the 2018-2019 financial year to study the benefits of using blockchain in government payments and investing in the Australian Standards Agency $ 350,000, aiming to be a leader in the development of international blockchain standards.

In March 2019, Australia announced a national blockchain roadmap strategy that will focus on a range of policy areas, including regulation, skills and capacity building, as well as innovation, investment, international competitiveness and cooperation. The Australian government believes that policies such as the national blockchain line map will help Australia become a global leader in the emerging blockchain industry.

Regarding the research and control of blockchain technology, the Japanese government is confronting it with a more positive but cautious attitude. Japan is actively enacting legislation at the national level, and while strictly controlling, it further regulates the industry, such as in some large-scale financial and logistics fields and merchants, to achieve the initial application of blockchain technology and digital currency circulation.

Blockchain application scenarios are accelerating

The seemingly tall blockchain technology is actually entering people's daily lives.

From hype to reality. With the re-engineering of business processes by the blockchain, the blockchain is becoming a core part of corporate technological innovation. American technology giant IBM has invested more than $ 200 million in research. Facebook specifically established a subsidiary, Calibra, to develop services such as money transfers and payments for Libra.

The application of US blockchain technology is presenting more and more rich formats. They appear as legitimate industry disruptors, proving that blockchain is the best way to change the future. The financial industry bears the brunt. Before Facebook issued a high-profile cryptocurrency Libra in 2019, the financial industry had already been a hot spot for the application of blockchain technology.

Denver-based Salt Loan (SALT) has started its blockchain lending business since 2016. SALT promotes its security. Automated lending technology provides a platform for membership-based lending, enabling borrowers to use their cryptocurrency to secure cash. Loans, while giving investors the opportunity to reach the cryptocurrency market in an indirect way. The salt loan platform allows users to use their cryptocurrency for cash loans. Borrowers can lock cash loans for 1-36 months, which can be used in most US states and multiple countries. The loan starts at $ 5,000. The senior product manager of Salt Loan is Jenny Schaefer from an old American express company, and feels that the use of blockchain is unlimited. "This space is open, and our business is only on the surface." She said that the combination of decentralized ledger technology with smart contracts and tokenized assets brings unlimited possibilities and will change data, assets (including the real world and Digital assets) to secure SALT storage, transmission and generation methods.

Geographically, more blockchain companies were born in the San Francisco Bay Area and Silicon Valley, the birthplace of technology. More mature technologies, wider applications, and more sought after markets have become their characteristics. Many companies already have a large number of well-known brand customer service group. San Francisco's Coinbase focuses on a digital portfolio that allows users to buy and sell cryptocurrencies. The company's technology makes buying and managing cryptocurrencies easy with features such as repeat purchases and library protection. Since 2012, Coinbase's transaction value has exceeded US $ 150 billion and exceeded 20 million people.

Ripple, also rooted in San Francisco, is a payment network that uses blockchain to send money around the world. International financial institutions such as American Express, BBVA and BMO are using the Ripple platform to process and send payments on their secure blockchain network.

Safety has always been the bottom line. Oasis Labs in Berkeley, California is a privacy-first cloud computing platform running on the blockchain. Oasis has created smart contracts that offer multiple options in decentralized trust and privacy protection products.

With the increasing number of application scenarios of blockchain technology, Japanese blockchain applications are gradually becoming practical. Japan was the first to test the water in blockchain applications, but it was also one of the first countries to experience losses. Japan recognizes digital currency as a legitimate payment method, but in 2014, at the time, MTGOX, the world's largest bitcoin exchange, lost 750,000 bitcoins and 100,000 bitcoins it held. At the same time, the company's account balance for customer deposits was also missing 2.8 billion yen. Due to the loss of Bitcoin and deposits, MTGOX's debt surged, causing it to fall into operating bankruptcy. This incident allowed Japanese regulators to immediately tighten supervision of digital currencies and blockchains, and once terminated the issuance of operating licenses to cryptocurrency exchanges, which caused Japan to lag behind other developed countries in the development of blockchain technology. Although the Japan Financial Services Agency has been discussing how to manage digital currencies, it was not until 2016 that the Japanese government re-emphasized the development of blockchain. The Japanese government now allows digital currency trading, but the regulatory system is very strict. The Japanese government has strengthened the supervision of digital currencies in order to prevent digital currencies from being used as funds for terrorist organizations, protect the rights and interests of traders, and prevent digital currencies from being used for money laundering and other illegal acts. According to statistics, there are currently a total of 20 companies registered with the cryptocurrency exchange license in the Japan Digital Currency Trading Association.

Japanese financial giants have deployed blockchain technology in exchanges, investment banks, and cross-border payments. Yang Renji, the head of business development of a well-known Japanese investment company, told reporters that in addition to the Japanese government, Japanese companies have gradually begun to attach importance to blockchain technology, such as Yahoo, Rakuten, Mitsubishi UFJ Bank, Mizuho Bank, Mitsui Sumitomo Bank and other large companies in this field. Get involved. Among them, Mitsubishi UFJ Bank and Mizuho Bank have launched their own stablecoins internally. This digital currency corresponds to fiat currencies and has characteristics such as high stability and low risk factor compared to Bitcoin, whose value fluctuates constantly. Yang Renji said that at present, the technology of blockchain is mainly used in the fields of finance, IT and logistics, and several large IT companies have also deployed in cryptocurrency exchanges. Yang Renji introduced that Japan has begun to manage the relevant laws and regulations of the blockchain very early. It is the earliest legislative country in Asia, and by now the regulations are very strict. He said that the application technology of blockchain is relatively extensive. At present, digital currencies use blockchain technology the most. However, such as big data collection and data storage, blockchain technology will be used more and more in the future.

"Blockchain provides huge opportunities for Australian companies to develop and increase employment. Australia needs to seize the opportunities brought by blockchain." Australian Minister of Industry, Science and Technology Karen Andrews has said. The data shows that the proportion of Australian startups related to blockchain has increased from 3.4% in 2016 to 8.1%. Blockchain is part of the Australian Job Creation Program, which has created more than 1.25 million jobs in Australia since 2013.

In April 2019, the Data61 department of the Commonwealth Scientific and Industrial Research Organization of Australia has been ranked among the world's top blockchain research institutions. Of the 30 most cited blockchain research papers in the world, five are from Data61.

In addition, Australia has implemented leading blockchain plans in many fields, including energy, financial industry, real estate, medical industry, agriculture, etc., and many institutions or schools have established blockchain consulting and training services.

Cold thinking applications under the blockchain boom still have a long way to go

The upsurge of the concept of blockchain has caused more and more experts, scholars and industry insiders to think about the changes, impacts and possible risks it brings to society.

A PwC survey suggests that from a business perspective, it is helpful to consider blockchain technology as a next-generation business process improvement software. Financial institutions are exploring how to use blockchain technology to disrupt everything from clearing, settlement to insurance.

Patrick McHenry of the U.S. House of Representatives Financial Services Committee described Bitcoin as an "unstoppable force" and urged regulators to encourage innovation in the U.S. digital currency space. It should not try to stop this innovation, and the government cannot Stop this innovation. He emphasized the need to encourage and promote innovation in view of the “stagnant economy” of the United States.

Yang Renji believes that the current blockchain technology has not been further developed, and the state is very similar to the Internet without broadband, 4G, and 5G technologies in the 1990s. As a result, the blockchain has not been well applied, and it is still widely used. Staying on Bitcoin-based digital currencies, even so, the number of Bitcoin transactions that can be confirmed per second is less than 10, which is insignificant compared to credit card hundreds of thousands of transactions per second. However, he believes that with the gradual improvement, the blockchain will be like the Internet and eventually become an infrastructure that directly realizes the exchange of value. To put it simply, in the future, the blockchain will coexist with the Internet, and even if there is no network, the value can be exchanged, for example, it can be directly consumed by the individual's "credit score" in society.

In the future, blockchain has a long way to go in terms of technology research, industrial applications, and regulatory services.