Babbitt Column | Big End of 2019: Technology Curve Rise Again

Author: Fu Xiaoyan

I believe everyone understands the classic pattern of the Gartner technology curve. There is a process of going through the trough and rising again. In 2019, the blockchain technology seems to have come out of such a pattern.

Driven by the bitcoin's minimum fall below $ 3,000 in 2018, blockchain technology encountered another "freezing point" last year. Whether it is a technological innovation or a "liquidating" liar, there are different opinions.

However, in 2019, blockchain technology has ushered in two "heart-strengthening agents". One is the stablecoin technology that I predicted that I can pay attention to this year when I did a year-end inventory last year. Its typical representative is Libra, which is "live and dead" to date; another The branch is the collective study of blockchain technology by the Political Bureau of the Central Committee of the Communist Party of China. The highest leader of the country highly praises the blockchain technology. A friend who is doing blockchain applications is so impressed that it is no longer necessary to "self-certify innocence" when going out to communicate. Already.

The characteristics of 2019 have also emerged from this. Things are rare, but they all have "weight" .

Review 2019

First, Libra

In fact, the first heavyweight "big coffee" who shouted to be a stablecoin earlier this year was JP Morgan Chase. It was announced at the beginning of the year that it would develop "JP Coin". Payment applications, so the impact is not great. In addition, by the end of this year, IIN may only be able to pull in about 400 banks in various countries, so everyone does not seem to pay much attention to it. However, on June 18, Zuckerberg of Facebook offered a "King Fry": Libra's commercial white paper and technical white paper came out. Xiao Zha is different from "Satoshi Nakamoto", who can only see his voice but not his people; it is also different from V god, whose latter has limited influence outside the blockchain. He leads Facebook, which is prestigious, technical, and financial. Of course, the most "fatal" is that he still has users, 2.7 billion global users. Moreover, he fought a noble banner-"Inclusive Finance", which is a world-class financial problem. The banking system does have a limited role in this regard. The small goals given by Xiao Zha are also "tempting" to serve 1 billion People without a bank account.

Facebook says it needs to be done, and no one dares to bet it ca n’t be done technically . Therefore, the governments and regulators of major countries such as G7, G20, Federal Reserve, and German regulators all recognize this as "unprecedented." It has become a consensus that the chain can profoundly change finance. Of course, considering the impact on the current financial system, monetary policy, and financial stability, it is reasonable to strive to "block", but this has promoted countries to legalize digital currencies of central banks. (CBDC) for further attention.

Affirmation from the highest leadership

On the afternoon of October 24th, the Political Bureau of the Central Committee of the Communist Party of China conducted the eighteenth collective study on the current status and trends of the development of blockchain technology. The General Secretary of the CPC Central Committee Xi Jinping emphasized during 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.

Driven by this, all provinces and cities have actively promoted the application of blockchain, proposed various incentive measures and application directions, and the blockchain conference has become active again, which is expected to inject positive factors into the development of the industry and improve technical activity.

On November 16, three blue books, led by central bank officials, were published: "China Fintech Development Report (2019)", "China Regulatory Technology Development Report (2019)" and "China Blockchain Development Report (2019)". The conference will be held in Beijing. Among them, the blockchain report has been released for the third consecutive year, and this year's release coincides with the state's leadership attaching great importance to the blockchain, which is just the right time.

Third, CBDC

The Singapore Monetary Authority has also worked hard on digital currency research. On November 11, the HKMA successfully led the development of a blockchain-based multi-currency payment prototype, allowing payment in multiple currencies on the same network. This prototype is actually the fifth phase of the HKMA Ubin project. This time the HKMA worked with JP Morgan Chase and Temasek to develop it. The Ubin project has previously introduced R3, Bank of Canada, and the Bank of England as partners. In addition, the European Central Bank is very enthusiastic about advancing fiat digital currencies, and the UK, Germany, and France are also very active. Sweden is also working with Accenture to research digital currencies, but the Japanese and Korean governments do not consider fiat digital currencies to be necessary.

China's CBDC research has been actively promoted, currently named "DC / EP", which reflects the two characteristics of digital currency and electronic payment. Central bank officials have also launched courses on the platform to publicly explain its characteristics. Said that there is no timetable, but the industry generally feels that "footsteps" are approaching.

Fourth, the hard exploration of the alliance

Last year, the author predicted that the alliance chain will still be a stage of competition for large institutions. In fact, this prediction is very simple, because when "winter" comes, only these large institutions can hold it. The longer the "winter" time, the fewer the remaining survivors. Fortunately, this "winter" is not long .

In March of this year, Weizhong's FISCO BCOS launched version 2.0 and made a lot of performance improvements. Ant, JD.com, and Baidu's platforms are also continuously improving. At the Blue Book conference, Zhongke Jincai also announced the results of platform improvements. FunChain Technology has also continued to cultivate in financial and other fields. Of course, as the origin of the alliance chain, Super Ledger also released its first long-term support version of Fabric v1.4 LTS in March this year.

For those companies that are still exploring in the "winter", I believe they will "take a step" when "spring" comes.

After going through the "peak cycle" of 2019, what are the points worth paying attention to in 2020?

Looking forward to 2020

I. Cross-border payment of stablecoins

Payment was originally the starting point of blockchain technology. It can be said that it is the housekeeping skill of blockchain. After Libra has made an impact, stablecoin cross-border payment may gradually land. After all, strictly speaking, stablecoin is 100% assets Mortgage electronic circulation vouchers are equivalent to bonds without interest, and electronic bills payable on demand are not completely unacceptable from a regulatory perspective. In the Federal Reserve's recent meeting and keynote speeches, concerns about global stablecoins also reflected the rapid expansion potential of this technology from another level. As a return to the classics of the blockchain, this technology of tokenizing fiat currencies can indeed make cross-border payments easier and more convenient. At this stage, banks may need to take the lead or play a key role in it. More feasible.

The author also mentioned in the article last year that stablecoin is a relatively “safe” transition form between the existing fiat currency and digital currency. It has both the advantages of digital currency and the stability of fiat currency. Shou is a good experimental object, but this does not mean that there is no problem with stablecoins. There is a lot of discussion about stablecoins. I will not repeat them here, but only talk about the impact of stablecoins when they exit.

When stablecoins are issued, they are exchanged through cash or deposits. Of course, most of the time they should be exchanged through deposits. Readers who understand finance may know that, in addition to representing the creditor's rights and debt relationships between banks and depositors, most of the deposits are essentially the product of credit creation, that is, generated by banks' continuous absorption of deposits and loans, and cash derived The amount of deposit depends on the deposit reserve ratio. The lower the reserve ratio, the more derivatives. When the reserve ratio is zero, it can be infinitely derived.

When exchanging stablecoins, deposits or cash are frozen. Although we can't figure out that the deposits that convert to stablecoins are the products of the first round of credit creation, it is clear that stablecoins are cash, digital cash, like digital currencies , Then when the stablecoin is withdrawn, that is, converted into bank deposits, it is equivalent to a base currency investment, that is, the original bank deposits are converted into cash through the in and out of the stablecoin, which is no different. As a result of a new round of credit expansion. Although the original deposits may be temporarily frozen when the stable currency is exchanged, the original credit relationship and scale will not disappear because of the frozen deposits. When these frozen deposits regain their vitality, it is equivalent to the base currency invisible increase .

The above introduction can be demonstrated with the following figure:

The impact of the increase in the base currency mainly depends on the size of the stablecoin. The larger the scale, the greater the impact, the liquidity may increase significantly, and inflationary pressures rise. The theory is still just a derivation of the relationship between M0 and M1, and whether it is correct remains to be further discussed.

Supply chain, especially medical

The supply chain has always been very suitable for blockchain technology, especially the application of alliance chain technology, because it has the characteristics of multi-party and insufficient trust, and supply chain finance has always been a difficult problem. . Encouraged by national policies, this "traditional" hot spot will also be repeatedly mentioned.

Why focus on medical care? At the blue book conference mentioned above, a person in charge of Du Xiaoman raised such a question that everyone has been asking. Can a designer answer the question of using blockchain technology in the face of a blockchain application? Can you do it He believes that if the team's answer is "No" one day, application design may really take a big step forward. It is true that from a pure design perspective, many people think that only digital currency is the most suitable for blockchain, although digital currency can be realized without blockchain. However, judging from my personal knowledge, the answer to "No" may be in the medical field.

After many years of reform attempts, medical reform has already entered the "deep water zone", and the "deep water zone" reform of this industry really needs to "light in" a ray of sunlight. Only by improving the transparency of this industry can it be possible to further extend the reform . Except for the blockchain, there may not be any technology with transparent "obsessive-compulsive disorder". Blockchain can not only help the entire supply chain system of the medical industry to establish credible connections and improve design, but also force the industry to be transparent and not tamperable. This kind of transparency needs to be promoted from the top down at the national level. Transparency will break a lot of interests, but without breaking, there will be no reform.

2020 may be the year when the blockchain technology curve rises. I hope that in this year there will be more applications for the development of blockchain technology value and value networks.