General Manager of Tencent Blockchain Technology: Screening Blockchain Application Scenarios in Three Dimensions

Source: China Business News , original title "Tencent Li Maocai: Blockchain practical application needs to be combined with scenarios"

Author: Liu Ying, Zhang Rongwang

The industry's focus on the blockchain industry has shifted from the "currency circle" to the technology itself. Today, whether it is a deep transformation of traditional industries or a supplement to the development model of the Internet, the application of blockchain technology is moving towards rationality.

Since its development in 2015, Tencent's blockchain has made many attempts at adapting to scenarios, and has practices in public welfare tracing, golden red envelopes, games, and smart healthcare. Among them, Tencent's cooperation with the Shenzhen Municipal Tax Bureau on blockchain electronic invoices is widely used. Now Shenzhen users can issue blockchain electronic invoices by taxi, Wal-Mart shopping, parking, and subway. Public data shows that Shenzhen has issued over 14 million blockchain electronic invoices.

"Blockchain is starting a new era that is more pure and positive." Li Maocai, general manager of Tencent blockchain technology, said in an interview with "China Business News" reporter, "At present, the development of blockchain technology is still in its early stages. It needs long-term stable development. At this stage, the focus of blockchain technology is to replace existing scenarios. "

Screening scenes in three dimensions

"China Business News": The development of blockchain technology depends on whether there are rich application scenarios that can land. How to find a good blockchain application scenario, and what are its screening criteria?

Li Maocai: What scenarios can blockchain technology solve? This is a problem with uncertainty. However, we can identify its application scenarios from three completely independent dimensions.

The first dimension is the nature of blockchain, that is, multi-party participation. Multi-party participation means that there are very complicated processes and high trust costs (tamper-resistant) between the original participants, which is exactly what blockchain technology can solve. The second dimension is business behavior, that is, all parties have the motivation to participate, can solve practical problems, and have a consistent mechanism for on-chain and off-line information. The blockchain solves the problem off the chain. If the information on the chain is false, it is useless to add more credits. This is the source tracing. How to ensure the consistency of the on-chain and offline information is worth thinking by practitioners. The third dimension is the industry development trend. Taking the development trend of the Internet as an example, the initial stage is the replacement of the original scene; in the second stage, there are innovations in models such as mobile games and e-commerce; the third stage is the stage of integration with the industry. By comparison, the growth of the blockchain is also divided into three stages. At present, the focus of the first stage is on the replacement of existing scenarios.

If all three dimensions can be satisfied, then this scenario has a high probability of becoming a blockchain application scenario. Taking the Tencent blockchain electronic invoice as an example, these three dimensions can be reflected in the tax scene. The first is multi-party participation. There are tax bureaus, reimbursement companies, invoicing companies, and users. Each party has a high trust cost. Secondly, the original tax bureau needed to have a complicated system to check whether the invoice is consistent with the transaction behind it. Today, with the help of blockchain invoices, invoice authenticity can be guaranteed in many ways. For example, payment information can be faked by opening a ticket in the past. Now it is necessary to create a payment information. In order to create payment information, more forgery is needed to support it. It is very difficult to make such fakes, and any angle screening can be found. Third, the blockchain electronic invoice is also a good application of technology, which can help build a convenient, efficient, and fair competition business environment.

"China Business News": Since the development of the Tencent blockchain in 2015, what attempts have been made to replace existing scenarios? What pain points does blockchain technology solve in these scenarios?

Li Maocai: On the one hand, Tencent's blockchain has been based on independent innovation and technology drive to strengthen its platform capabilities. On the other hand, it has insisted on providing enterprise-level industry solutions for industry partners and landing secure and efficient blockchain applications. Tencent has made many attempts for the adaptation of the scene. The earliest was to use blockchain technology for public welfare to find people. In addition, it has also practiced in golden red envelopes, games, and smart medical services.

In Shenzhen, most people experience the blockchain electronic invoices that Tencent cooperates with the Shenzhen Taxation Bureau. Shenzhen users can now issue blockchain electronic invoices by taxi, Wal-Mart shopping, parking, and subway.

Judicial deposit and copyright protection are also very suitable application scenarios. Take copyright protection as an example. At present, the intellectual property rights of content creators are difficult to be protected, and Tencent to the letter chain has made a relatively good innovation time in terms of copyright protection and judicial certification.

At the same time, Tencent Fintech has also made very good attempts in the supply chain finance. Together with Lianyi Rong, we have built a supply chain financial platform—micro-enterprise chain—that solves the problem of difficult financing for SMEs.

Establish a new type of trust mechanism

"China Business News": In the supply chain financial model, risk control is an extremely important link. If companies in the supply chain collude with each other to defraud financial institutions, it will have an adverse impact on the entire supply chain. What are the advantages of using blockchain technology for risk control? What are the current difficulties?

Li Maocai: In the financial field, there have always been difficulties in cross-border remittances, difficulties in export tax rebates for enterprises, and difficulties in financing small and medium-sized enterprises. Behind these problems is the difficulty in monitoring asset transfers, high collaboration costs and low collaboration efficiency among all parties, and the essence of these problems is the lack of an effective trust mechanism. At present, the efficiency of traditional financial institutions is based on a high degree of centralization. The tamper-resistant technical features of the blockchain establish a distributed trust mechanism, which determines that it may play an important role in establishing a new type of trust mechanism in the future. Innovation provides vast space.

First, the current innovation of blockchain-based financial infrastructure is in the ascendant. Like Bitcoin and Ripple in the early years (the third largest cryptocurrency by market capitalization), Libra's innovation potential in cross-border remittances that emerged in 2019 has attracted much attention, and it is possible to optimize and restructure the international financial infrastructure. It has attracted the attention of central banks around the world. Secondly, the blockchain can generate many innovative applications for financial service scenarios, such as combining smart contract, identity authentication, and privacy protection technologies. Through preset rules, intelligent collaboration, and information sharing to improve inefficient collaboration models between traditional institutions, simplify cooperation processes, and increase collaboration efficiency. Electronic applications based on smart contracts on the blockchain, fast-track speed review, block chain reward execution, supply chain finance credit transfer, and other industry applications can realize the rapid flow of funds of financial institutions, accelerate the disposal of bad debts, and release more fluidity.

In the current society, there are still huge value exchange costs in many scenarios. Digital asset systems based on blockchain technology can realize asset digitization and digital assetization, reduce the value exchange costs in most business scenarios, and broaden the boundaries of financial assets. To realize the mapping and circulation of assets on the off-chain, accelerate the transformation of digital resources to digital assets, and then promote the deep integration of the real economy and the digital economy.

"China Business News": What are the issues in blockchain technology that need attention?

Li Maocai: Tencent's blockchain is mainly divided into three levels in terms of technical capacity building. The first layer is the core layer, which is mainly for the continuous development of tamper-resistant capabilities, including the continuous research and breakthrough of basic capabilities such as cryptography, consensus algorithms, block chain storage, and smart contracts; the second layer is the improvement and optimization layer, and the core layer Combined with engineering solutions for comprehensive optimization, such as: performance optimization, mass storage, key distribution and preservation, privacy protection, etc., to achieve the availability of capabilities, mainly reflecting engineering capabilities; the third layer is the scene adaptation layer, Find out the actual needs by in-depth scenarios, combine blockchain and other technical systems to create effective solutions, and truly bring the key value of technology into play.

For large-scale application scenarios, the focus is on the availability of the second-layer technology. Tencent has been committed to strengthening the capacity building of the underlying infrastructure in terms of performance, flexibility, and security. Tencent's underlying technology has fully borrowed its Years of practical experience accumulated in the payment field, especially relevant experience in WeChat Pay, WeChat Red Packet High Concurrency, and Distributed Account Management. The existing solution has already supported tens of thousands of transactions per second to meet the high concurrency in the data transfer process. Scenario performance requirements.

At the same time, Tencent has focused on the core application scenarios in the past two years, platformized blockchain services, and accelerated the establishment of customized blockchain applications.

Don't deify blockchain technology

"China Business News": The industry generally believes that the development trend of blockchain and its value in traditional industries should be viewed rationally in order to give full play to the role of new kinetic energy in promoting the old kinetic energy and the positive influence of the old kinetic energy on the new kinetic energy. In your opinion, what is the future development trend of blockchain technology?

Li Maocai: With the advent of 5G and the Internet of Things, informatization will enter a period of rapid development, which is an opportunity to enter the digital society. Blockchain, as the infrastructure of a digital society, will also bring new power and change to the digital society.

However, in the current hot situation of the industry, more precipitation and accumulation are needed. Let's not deify the blockchain technology. It still needs to be integrated with other scientific and technological technologies. For example, in a certain industry, blockchain technology + Internet of Things technology can solve practical problems. In some fields, it may be blockchain technology + AI. Technology + big data technology can create new capabilities.

At present, the development of the blockchain is still in its early stages. Its main purpose is to solve the disadvantages of a centralized system, increase the trust of data, and establish a channel for trusted data circulation. To this end, we must first strengthen technical capabilities and promote the running-in between technology and business and supervision; second, we must consolidate the technical foundation and provide the premise for more digital management and governance development. At the same time, it is necessary to dig deeper into the entry point of the combination of blockchain and the real industry, so as to better empower the real economy. On the basis of data credibility, reshape trust relationships and cooperative relationships, and realize digitalization and intelligence.

Tencent has always focused on building its own basic capabilities, and is more restrained in the choice of scenarios. Only if the use of blockchain technology in demand scenarios can further reduce costs and improve efficiency, it can determine a landing plan after evaluating a definitive answer. In the future, Tencent's blockchain will continue to accelerate blockchain technology innovation, adhere to the technology advancement, do deeper and more thorough scenarios, and consolidate the construction of the underlying development platform of the blockchain and the application of the industry.