Source of this article: "Talk" by Fenghuangwang Finance
Author: Xu Choi
Blockchain stands on the cusp, and the central bank's digital currency is poised for growth. On October 24th, the Political Bureau of the CPC Central Committee emphasized that blockchain as a breakthrough point in core technology plays an important role in improving people's livelihood, smart cities, and promoting the interconnection of information and funds. It also pointed out that blockchain is in the field of digital finance and digital asset transactions. Application still needs to be deepened. Recently, with regard to the development prospects of the blockchain and issues related to the progress of China's digital currency, Fenghuang Finance's "Qi Tan" column had an exclusive interview with Li Lihui, the leader of the Blockchain Working Group of the China Internet Finance Association and former President of the Bank of China.
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Since the birth of Bitcoin in 2009, it has marked the emergence of blockchain technology. Ten years have passed. How is the development of blockchain technology? In Li Lihui's view, blockchain is a core technology. At present, his underlying technology is not so mature, and the bottleneck of large-scale applications has not yet been broken. It is in a period of major opportunities for industrial technology innovation. The maturity of blockchain technology takes about five years, and it will give priority to rapid development in the financial field.
However, Li Lihui is not optimistic about the prospects of virtual currencies such as Bitcoin. " Frankly, I don't agree with everyone to invest in some virtual currencies like Bitcoin, because he is too risky, it seems more like a speculative tool, and there is not much prospect. " Li Lihui said, digital currency There are three main types, the first is a legal digital currency, the second is a virtual currency, and the third is a digital currency of a trusted institution. He is more optimistic about fiat digital currencies or digital currencies of financial institutions than virtual currencies.
At the same time, Li Lihui said that China is a leader in the research and development of fiat digital currencies. We have the world's largest retail market, and all our financial transactions must meet the requirements of high concurrency, large-scale and reliable profits.
So, after the arrival of digital currency, will it pose a threat to small and medium commercial banks? In this regard, Li Lihui said that digital currency may limit the initial credit capacity of commercial banks. In order to maintain market stability, it should maintain the existing operating issuance mechanism and adopt an indirect issuance model.
Pictured: Li Lihui, head of the Blockchain Working Group of the China Internet Finance Association, and former president of the Bank of China
Broad prospects for the development of blockchain finance
Fenghuangwang Finance: Recently, blockchain as an important breakthrough in independent innovation of core technology has risen to the national strategy. What is the current status of China's blockchain technology and industrial development?
Li Lihui: First of all, I think blockchain is an important core technology. In addition, as a core technology, his underlying technology is not so mature at the same time, and the bottleneck of large-scale applications has not yet been broken, so we are in industrial technology A period of great opportunity for innovation. I think the central government attaches great importance to blockchain technology. The development of the blockchain industry is to seize the most important opportunities.
Phoenix Finance: What are the current application scenarios of blockchain?
Li Lihui: Application scenarios include financial transactions in finance, logistics, charity, etc. As far as the application of the blockchain is currently observed, the scale is not particularly large. It is necessary to further break through some large-scale application scenarios of the blockchain technology.
Fenghuangwang Finance: Within five years, in which industry do you think the blockchain will achieve a major breakthrough?
Li Lihui: Some authoritative organizations in the world predict that the maturity of blockchain technology will take about five years. I think finance should be a very important field. First of all, there is a huge market for financial institutions, and secondly, financial institutions also have sufficient payment capabilities to carry out some investments and maintenance in the blockchain. So I think the future of blockchain finance The development prospects are quite good.
The boundaries of personal information are blurred,
Business rules need to be more specific
Fenghuangwang Finance: Blockchain technology will also be applied to big data, artificial intelligence, and big data, artificial intelligence is accompanied by a series of risks such as user information leakage and user fraud. How should the blockchain avoid such risks ?
Li Lihui: This is a very important concept, which is the joint application of blockchain technology and other digital technologies, or integrated applications. Single digital technology, because the scene has relatively large restrictions, if we can say that we can well integrate blockchain technology with artificial intelligence technology and big data technology, it should be said that there will be great development prospects.
But this may involve a very important point, that is, the protection of information data and the security of information data. In fact, judging from the application of big data technology in China in recent years, we have not done enough in terms of data protection or privacy protection. Issues such as personal information leakage, illegal buying and selling of personal information, and illegal use of personal information have arisen. These problems may require some specific regulations in law.
For example, communication operators, advertising platforms, hospitals, terminals, railway transportation departments, etc., they have collected a large amount of personal information in their business. Two of these data need special attention. One is data that belongs to public information, and It is personal information data. But what is public information and what is personal information is not clear. Regarding personal information, what rules should be followed for commercial use should be more clearly defined.
In addition, we need to further improve the quality of the data. He must have sufficient authenticity, sufficient consistency, and sufficient reliability. How to make our data real, reliable, consistent and unified is what we need to do further.
Virtual currency doesn't have much prospect,
More optimistic about legal digital currencies or digital currencies of financial institutions
Fenghuangwang Finance: Some time ago, after the news of supporting the innovation and development of blockchain came out, Bitcoin rose sharply. What do you think of this phenomenon? What do you think of the relationship between blockchain and digital currency?
Li Lihui: In fact, there are mainly three types of digital currencies. The first is a legal digital currency, the second is a virtual currency, and the third is a digital currency of a trusted institution. The bitcoin you mentioned just now is actually a rise or fall in virtual currencies.
Virtual currency has two major flaws, the first being a technical flaw. Virtual currency is a decentralized platform based on the public blockchain. Due to the limitations of technical institutions, his running speed is relatively slow and his operating efficiency is relatively low. Therefore, he cannot cope with those high concurrency requirements. If this defect cannot be solved, it will not be possible to apply it on a large scale.
Second, virtual currencies are more importantly economically flawed. Generally speaking, virtual currencies such as Bitcoin do not have sufficient endorsement of trust, nor are they supported by real physical assets, so speculation is very heavy, which is why Bitcoin's rise and fall are large. Frankly speaking, I don't agree with everyone to invest in such virtual currencies, because he is too risky and cannot adapt to our normal payment or value transfer and value storage requirements. It seems more like a speculative tool.
Therefore, virtual currencies have little prospects, they can only be applied in a small area, and speculation is too heavy. But legal digital currency, digital currency of financial institutions or digital currency of trusted institutions, there is still room for development in the future.
China leads the way in the development of fiat digital currencies
Fenghuangwang Finance: At present, what position does China have in the digital currency field?
Li Lihui: From what I know, our research and development on fiat digital currencies should be relatively advanced. China has one of the largest markets in the world, especially the retail market. All our financial transactions, including fiat digital currencies, must meet the high concurrency requirements of our hypermarket retail business before they can be implemented and applied. Compared to these small countries with millions of people in Europe, we also have higher requirements for large-scale reliable profits.
Fenghuangwang Finance: Do you look forward to the arrival of digital currency more, or because there will be many risks after the arrival of digital currency.
Li Lihui: This mainly lies in your choice and ability to financial control. I think the emergence of digital currency is definitely a trend. As for when it will appear, if our technology can get high concurrency and can achieve reliable demand for scale, digital currency itself is a great advantage.
For example, his issuance cost is lower, and it is easier for the central bank to regulate the currency market. In addition, digital currencies can achieve controlled anonymous payments, which is also beneficial to consumers. At the same time, he is traceable, especially the central bank's digital currency tracking. Anti-money laundering can prevent illegal applications.
Digital currencies may limit the initial credit capabilities of commercial banks,
Fenghuangwang Finance: After the arrival of digital currency, will it pose some threats to small and medium commercial banks?
Li Lihui: This lies in our choice of currency issuance mechanism. The current currency issuance mechanism is called the indirect issuance mechanism, or the dual issuance mechanism. The central bank issues legal currency, and through commercial bank issuance, the currency Expand to the market.
Digital currency technically has a possibility that it can be issued directly, and the central bank can directly issue digital currency to the public and issue it to enterprises without going through a commercial bank. With this possibility, the efficiency will be slightly higher, but in terms of the overall market structure of the currency market, it will bring a problem. That is to say, a part of the deposit will be directly in the central bank, not necessarily a commercial bank, and no deposit, or a decrease in the deposit, will limit the initial credit capacity of the commercial bank.
Therefore, I think that if China issues a relatively large legal digital currency, it should maintain its existing operating issuance mechanism and adopt an indirect issuance model to maintain market stability. Moreover, we have just started issuing legal digital currencies, and it is not possible to replace all traditional currencies. If one is issued directly and the other is indirectly issued, the connection between the two issuance mechanisms will be more difficult, and more importantly, Will disrupt and reconstruct the current currency market.
"Qi Tan" column introduction: Talking about laughter and giving birth to the world, laughter and scolding are all history. Kai Tan, a thought-provoking dialogue, focusing on hot people and recording the great era. Fenghuang.com Finance has created an in-depth interview column "Qi Tan", focusing on financial and economic hotspots in the big age, decoding the economy, exploring the essence of business, recording the story of the times and restoring multi-dimensional figures.