Interview with Li Ming of the Ministry of Industry and Information Technology: Understanding Decentralization of Blockchain with Cross-border Transactions and Cold Chain Logistics

Securities Daily reporter Ma Fangye Li Bing

Source: Securities Daily

As one of the main features of blockchain technology, "decentralization" is mentioned most frequently and is also considered the most disruptive. How should decentralization be properly understood? Does the blockchain technology have to pursue absolute decentralization? With these questions in mind, a reporter from the Securities Daily interviewed Li Ming, the director of the Blockchain Research Office of the China Electronics Standardization Institute.

"Securities Daily" Reporter: Hello, Director Li! Now that everyone mentions blockchain, we need to mention decentralization? How do you understand this?

Li Ming: Yes. In fact, whether it is decentralized, polycentric, or deintermediate, in our opinion, it is multiple expressions of a technology. To be precise, decentralization is only a distributed network form, and it should not have other colors. Blockchain technology uses a distributed network to provide technical support for peer-to-peer collaboration. Whether decentralization should not depend on the requirements of the technology, but also on the application requirements carried by the technology. Because technology has no application scenarios, it can only be a "toy" of a laboratory or a technology geek.

Specifically, in the field of cross-border transactions, it is impossible for any country to completely decentralize the application of cross-border transactions, and they need to be regulated to a certain extent. In contrast, in the field of cold chain logistics, for example, we bought a sheep from Inner Mongolia to Beijing and recorded the temperature data on the chain every minute to prove that the sheep has been frozen. This scenario does not require strong supervision. .

Therefore, whether decentralization or the degree of decentralization should be determined by the application carried by the blockchain technology, and should not be decentralized for decentralization. To put it simply, if decentralization is 0 and centralization is 1, the requirements of a certain application scenario for decentralization may be somewhere between 0 and 1, and it may not necessarily be non-zero or 1.

"Securities Daily" reporter: Blockchain can bring many benefits, but there are also many risks. What do you think?

Li Ming: That's true. In the long run, the combination of blockchain with smart contracts and artificial intelligence will produce unpredictable results, and even the scenes of science fiction may become a reality. It can be said that blockchain has many benefits and also faces many challenges.

Specifically, the first is the regulatory level. Relevant activities such as ICOs have greatly affected the financial order. Recently, relevant departments in Shanghai and Beijing have also made fierce attacks on virtual currency transactions. The second is the bad information level. The technical characteristic of the blockchain is that the information on the chain cannot be changed, and the bad information will cause some adverse effects on the chain. Therefore, the bad information should be filtered before the chain to eliminate the risk. Finally, there is the cross-border flow of data. Blockchain is peer-to-peer communication. Like Bitcoin or Ethereum, a lot of data can flow abroad. Data has become a factor of production, and data flow must be monitored. Similarly, the blockchain is also a software form, and the risks faced by other software are also the same, such as security threats at the network layer, platform layer, and application layer. In addition, because of its technical characteristics, blockchain has its own security issues, such as computing power attacks and smart contract vulnerabilities.

"Securities Daily" reporter: Can you tell us your opinion on the blockchain industry?

Li Ming: In fact, there are many statements about the blockchain industry. For example, philosophers talk about production relations, sociologists talk about collaboration, and economists talk about token economy. Why are there so many claims? I understand that the basic logic is that from a technical perspective, because the blockchain "encapsulates" data through a series of technical means, forming a trusted, consensus, and tamper-resistant technology system to provide trust for applications. support. The increase in trust makes it possible to transfer value, thereby promoting large-scale collaboration at the social level, which may cause changes in production relations. However, if we depart from technical support and application practice, other imaginations are empty. We hope that everyone can look at blockchain technology from an objective perspective.

When using blockchain technology, scientific methods are needed to guide, and engineering and systemizing ideas are needed. For example, in terms of choice value, the blockchain may have four aspects available: deposit and confirmation, transactions and exchanges, traceability, and credit services. If it is a supply chain company, source tracing may be a good choice; if it is a financial company, trading or exchange may be a good choice. Wherever you start, you don't just use the blockchain technology, you always have to choose a suitable and valuable direction. Nowadays, people often hear about the greatness, subversion and innovation of the blockchain, but few people talk about the engineering and systematic thinking of the blockchain. In this regard, we are also actively thinking, hoping to use a standardized method to guide the rapid development of the industry.