Blockchain donation system is useless because these issues are not taken into account

Text: Zhao Xuejiao

Source: Zinc Link

The slow redeployment of materials by the Wuhan Red Cross has aroused suspicion from the public.

Combined with the characteristics of blockchain technology, cross-validation can be achieved, the difficulty of forging information is increased, and the credibility of the information on the chain is enhanced. The biggest advantage of blockchain is that the verification cost is extremely low. Anyone can query the information on the chain to verify the authenticity of the data. For manufacturers and Red Cross organizations that donate supplies, they can prove themselves innocently.

It is believed that this will be a scene where the blockchain can do much.

However, the reality is that although some companies have launched blockchain material traceability systems, they have not become mainstream applications. In addition to time constraints, the system is not perfect, and more importantly, these blockchain systems have not really solved the pain points of material distribution.

So, what else needs to be done for the blockchain to really play a role in the epidemic?

On February 26, Gong Haihan, the founder of Zinc Link, invited Meng Yan, the vice president of the Digital Asset Research Institute, the vice president of CSDN, and the sponsor of the Token Thinking Lab, to explain the "application and value of blockchain in the distribution of epidemic materials".

Zinc Link: You participated in the work of assisting medical supplies in Wuhan. You felt the problems in the existing supply chain system. How can the blockchain play an advantage in it?

Meng Yan:

I ’m from Wuhan. I returned to my home in Wuhan in mid-January to recover from illness, and I encountered this unprecedented epidemic. Under the co-ordination of Mr. Zhu Jiaming of the Digital Asset Research Institute, he participated in the docking of some relief materials, including helping the hospital to find relief materials.

Supply chain management is an important proposition in material management. There are many advantages in the blockchain. Supply chain management is the earliest application of the blockchain, and it is also the one that everyone hopes the most.

First, the blockchain can do cross-validation. Cross-validation can increase the difficulty of falsifying supply chain information and increase the credibility of the information on the chain. In the important information link, it is not one party who has the final say, but several parties have provided this digital evidence from their own independent perspectives, proving that the person is saying the fact, which is called cross-validation. Once the information is on the chain, it will be chained in a string in an immutable manner, and the verification cost is extremely low.

Verification is important in the areas of emergency supplies, transportation of dangerous goods, and food and medicine. The verification cost of the prior art is particularly high.

Second, the biggest outstanding advantage of blockchain is that the verification cost is extremely low. In particular, its data is transparent, which means that anyone can look at that information and verify the authenticity of this data. This provides a huge advantage for manufacturers who provide materials, including organizations such as the Red Cross, which can be self-certified.

This time the Red Cross in Wuhan suffered a lot of scolding, but everyone must know that in fact some of them are the ones they should be scolded, and some of them are also aggrieved. But its entire infrastructure and tools can't prove that he is innocent, and the blockchain can help him prove his innocence.

Third, the data on the blockchain is credible , which constitutes an open system. If the data on the blockchain is credible, many things do not need to be organized by the government. The public can collaborate autonomously, develop systems on it, and do various Rescue work.

Fourth, the response speed of the blockchain is relatively fast , cross-validation can be performed, and the cost of verification is low. These advantages determine that after the submission of a lot of information, there is no need to repeatedly check and integrate.

Blockchain is used in currency or financial applications, and there is a huge advantage called payment as settlement. The same principle applies to the field of emergency supplies. Whether the materials are delivered and where they have been, you can know the real situation without repeated verifications, which is also a great advantage of the blockchain.

Zinc Link: After the outbreak of the crown, many companies launched blockchain-based medical supplies and charity traceability systems, but the amount of information on the chain is currently small. What is the reason? How to put a lot of data on the chain?

Meng Yan:

To date, these systems have not played a major role in the outbreak. This is not only a problem of insufficient amount of information on the chain, but also that the entire blockchain system has not played an important role in the system to fight the epidemic, nor has it really functioned.

This is mainly because these blockchain systems are inadequately prepared and rushed to the battlefield. They are not connected to related systems, let alone integrate. Whether at the government level or the civilian level, not many people use it, of course, the amount of information is not large.

Of course, blockchain systems that are also useful, such as Ant Financial's system for tracking and querying blockchain materials in Alipay's mutual treasure, still have a certain amount of weight.

Zinc Link: The problem of the allocation of social donated materials by the Wuhan Red Cross Society has aroused social dissatisfaction, which revealed the loopholes in its material allocation system? What problems can the blockchain solve?

Meng Yan:

There are two ways to allocate resources. One is to allocate resources according to a plan, that is, an authority, usually the government allocates resources. There is also a price mechanism configuration. In China's current market economy, the price mechanism is mainly used for configuration.

The first problem with the plan configuration is inefficiency. In the event of a sudden major epidemic, this system cannot cope with it completely, and it takes a relatively long time to adjust the organization. For example, the establishment of an emergency team, etc., the organization must be adjusted in place before the planning can be done.

The second problem is the public's mistrust of the plan. For example, everyone has questioned the transparency of the distribution of public materials by the Wuhan Red Cross Society. It is more difficult for the Red Society to prove itself innocently.

The problem with the price mechanism is that although it is very efficient and can be quickly deployed, it cannot reach fairness and reasonableness. Often, whoever has more money can get more resources.

Therefore, we propose whether it is possible to use the blockchain to establish a supply chain and distribution system. First, ensure that the source of materials is clear. On this basis, establish a market. In this market, people vote through some kind of token to decide who to give priority to.

The Wuhan University team has launched a blockchain-based information exchange platform for protective materials. Although the communication platform is based on the blockchain, at present it is basically a forum. If we go one step further, assign tokens to the people and let them choose.

But there are many difficulties. First, the token economy usually creates local imbalances in markets where supply and demand are balanced, which helps companies build competitive advantage. But the above example, in turn, is to create a partial equilibrium in a short-term market where the supply and demand are not balanced, so that materials can be allocated to those who need it most.

Equilibrium appears in a small local area, which is exactly the reverse of the application scenario of the token economy that I was familiar with. In this case, the token economy is still usable, but it does require more thought.

Second, usually in a long period of time, as long as the planned economy and the government are given enough time, they can often play a more effective role. Once the government responds, it can do a census of the population and then allocate resources to each household on a daily basis. This is actually the most effective.

In this case, the blockchain is actually serving the government, and its role must be adjusted.

Third, a necessary condition when making this system is the verification and free dissemination of information. If the information is not true, cannot be verified, or cannot be freely disseminated, there is no way to vote. The free dissemination of information contradicts the thinking of China's emergency management.

Zinc Link: After the epidemic, what is the development trend of the blockchain? What are the market spaces for blockchains seen from the epidemic?

Meng Yan:

The first is that everyone's focus is on the epidemic, and attention to many industries such as blockchain is low. Secondly, the role of the blockchain in this epidemic prevention is not outstanding, and it has been questioned; moreover, demand is shrinking. Of course, this is a problem faced by many industries; finally, it is a pause in investment.

In the short term, the negative impact of the epidemic is more serious, but the long-term impact on the blockchain is good.

After the epidemic was wiped out, a rebound would soon be ushered in. The Chinese crouched deeply, so they must jump up high.

Also, new application spaces will emerge. Disaster relief, donations, public welfare and charity, including national emergency affairs, respond to the emergence of these new market spaces, and there will be a large amount of funds to enter, and the blockchain will have a new battlefield.

The blockchain provides us with a self-certifying and innocent tool from a technical perspective. This tool can be used to form consensus and reach collaboration between different subjects. The combination of these two points is applicable to the current collaboration scenario between various government departments, and the management management process of transparency is transparent and open, which can be verified at low cost and improve credibility.

In abstract terms, blockchain is actually a technical system. Technically speaking, the essence of a blockchain is a machine that crosses trust boundaries and implements consensus, or synchronization status, among different trust subjects in a distributed manner.

When we have such a technical system, coupled with algorithmic contracts, also known as smart contracts, a very effective institutional environment is formed.