Viewpoint | The commercialization of blockchain is mainly based on centralized blockchain, not decentralization

Source: China Times

Author: Ran Xuedong Xu Xiaomei

2019 is coming to an end, and the regulation of the entire fintech industry is gradually tightening. It can be said that the blockchain has received few country's support and encouragement in 2019.

Since October this year, Xi Jinping, the General Secretary of the CPC Central Committee, emphasized when he presided over the study of the Politburo, that blockchain should be used as an important breakthrough in independent innovation of core technology. New growth points in various industries, blockchain concept stocks have grown significantly.

However, there are many speculation companies in their cloaks that are taking advantage of this shareholder's style to start "making waves", so both investors and companies should treat it rationally.

"Blockchain's future development in business is mainly based on centralized blockchains, not decentralization. Centralized blockchains can enable TPS (referring to the number of transactions per second that the system can process) to meet almost any business need There are certain guarantees for security. "Wang Yang, Dean of the School of Science, Hong Kong University of Science and Technology, frankly said at the" 2020 Digital Technology Annual Meeting and New Finance Annual Meeting "hosted by the 01 One Finance Zero Think Tank.

Wang Yang believes that at present, the status quo of the blockchain is diversified, such as multiple consensus mechanisms: POW, PoS, DPoS, BFT, etc. Centralized blockchains, such as private chains and alliance chains, are now more introduced, which are characterized by fewer nodes, high efficiency, trust building without relying on currency issuance, and accepting supervision. "I personally think that I am more optimistic about the future development of the alliance chain and private chain."

He also said that the future commercialization must be stabilized. Digital currencies such as Bitcoin and Ethereum are highly volatile, and most people view them as investment products, which affects their large-scale application in business. The stable digital currency solves this problem to a certain extent. By linking with fiat currencies, assets, and even bitcoin, the stability of digital currency values ​​can be achieved, and the amount of circulation can be controlled by algorithms to achieve stability. Currently, more stable digital currencies are used, such as USDT, Libra, and DCEP for Chinese yuan.

However, the current environment is not ideal. Wang Yang pointed out that the stable digital currency of the people (such as USDT) is often questioned, and some even think that they are fraud. The lack of transparency has become the focus of the government's "attention."

Wang Xin, director of the Research Bureau of the People's Bank of China and secretary general of the China Institute of Finance, expressed the same view at the Third China Internet Finance Forum in 2019. He believes that even if the private crypto digital currency has developed to a certain extent and played a certain degree of currency functions, it is difficult to replace fiat currencies. One of the most important reasons is that it is difficult for private digital currencies to solve the problem of trust, so it cannot be widely used.

Moreover, "If folk digital currency is generated by an algorithm and there is no central issuer behind it, it is through an algorithm. Who will maintain the stability of folk digital currency and what is the source of its value? "Said Wang Xin.

Speaking of the Libra white paper released by Facebook in June of this year, Wang Yang said, "The problem with Libra is its impact on traditional financial sovereignty. Most countries don't want to make it successful, so at least for some time it has stopped."

The emergence of Libra breaks the traditional boundary of sovereignty, is not subject to the independent supervision of any sovereign state, and is not exclusive to users. Facebook hopes to use Libra to establish a new global payment system to achieve greater and deeper financial inclusion.

China has also released its own digital currency long ago. A few days ago, Chen Yulu, deputy governor of the People's Bank of China, said that five years ago, the central bank started research on digital currencies and research and development of legal digital currencies (DCEP). On the one hand, it is necessary to strengthen the adaptability of the fiat currency system to the future digital economy ecology; on the other hand, it is also necessary to meet the challenges of the global stablecoin. Wang Yang mentioned that China's DCEP may trigger other countries to promote sovereign digital currencies.