Dialogue | Where is the Blockchain in the New Infrastructure?

After the epidemic, the market expects new infrastructure to start in full swing.

At the end of 2018, the Central Economic Work Conference pointed out that “accelerating the pace of 5G commercial use and strengthening the construction of new types of infrastructure such as artificial intelligence, industrial Internet, and the Internet of Things”, the term “new infrastructure construction” came into being. Later, the market also included areas with large future incremental space into new infrastructure, including rail transit and new energy.

However, the position of the blockchain that rose to the national strategy last year in the new infrastructure needs to be further clarified. Therefore, at 8 pm on March 10, the "Central University of Finance and Economics-Mutual Chain Pulse BMI Forum" invited guests from academia, business and investment circles, and started around the topic of "new infrastructure, the location of the blockchain". Online round table discussions. Source of this article: Interchain Pulse, original title "Location of Blockchain in New Infrastructure: Basic Technology of Infrastructure"

Dialogue guests: Chen Bo, associate professor of the Institute of Finance and Economics of Central University of Finance and Economics, Wang Xiaohui, deputy dean of the Internet Industry Research Institute of Tsinghua University, Song Jiaji, dean of the Blockchain Research Institute of Guosheng Securities, and Zhang Shuai, director of the technology market of FunChain

It is too early to list the blockchain as a national infrastructure

Chen Bo: How did the three guests understand the new infrastructure, what is the difference between it and traditional infrastructure construction, and why the concept put forward 2 years ago has gone viral this year?

Song Jiaji: In the past 10 to 20 years, the development of China's infrastructure construction has focused on real estate, "iron roosters" (railway, highway, airport), UHV and other fields.

With the completion of the previous round of infrastructure construction, the real estate sector, the leading sector of infrastructure construction, has been significantly suppressed by policies. In response, the market began to think about where the new round of infrastructure will be invested, and this is the origin of "new infrastructure".

Recently, due to the impact of the epidemic, the market has some concerns about overseas supply and demand. Therefore, more investors turned to domestic demand, and the infrastructure sector has received attention. And some new directions have been selected in infrastructure construction. These new infrastructure constructions focus on new sectors such as 5G communications, cloud computing, industrial Internet, and blockchain.

The development of new infrastructure will be a necessary way to stimulate subsequent economic growth after the epidemic is over. This is in line with the country's requirements for stabilizing the economy and growth this year, as well as the original intention of accelerating the transformation of new and old kinetic energy and supporting emerging industries.

Wang Xiaohui: The traditional infrastructure construction is mainly "iron rooster", and these areas have invested a lot in the last round of investment. But later, the marginal effect of investing in "iron roosters" has become smaller and smaller, and the role of pulling the economy has become weaker. Especially in the real estate sector, a large bubble has emerged, and the state has adopted multiple rounds of restrictions on the real estate sector.

The development background of the new infrastructure is that in recent years, China's economy has fallen rapidly, especially in the context of the Sino-US trade war. We are forced to switch to a new way of growth.

There are three main modes of economic development at present, one is investment; the other is consumption; the third is export. In terms of consumption, with the economic downturn, the income of many enterprises and individuals is affected, and consumption has lost its driving force for growth. In terms of exports , after the Sino-US trade war, coupled with the impact of the current epidemic, exports have also been greatly restricted. Therefore, at present, we only have the "investment" path.

In terms of investment , we need to develop new infrastructure. In the process of transforming the economy from the traditional economy to the digital economy, it is necessary to increase investment, and these investments may require large marginal benefits, so the government must start investment in new infrastructure. This is actually a last resort .

Zhang Shuai: Just now the two deans have explained the old infrastructure clearly, so I will not repeat it. I will mainly talk about the new infrastructure.

To sum up, the new infrastructure is actually a technology-oriented infrastructure construction, including just mentioned 5G, UHV, intercity high-speed railway, rail transit, charging piles for new energy vehicles, big data centers, artificial intelligence, industrial Internet and many more. On the whole, new infrastructure is divided into two types: First, the physical infrastructure, such as high-speed rails and new energy charging piles, are infrastructures that solve problems such as personnel mobility and energy consumption in the real world. ;

The other refers to the infrastructure of the digital world, such as 5G, big data, artificial intelligence, and the industrial Internet. This is the more obvious infrastructure of the digital world and digital economy.

Not only new infrastructure, but the term "digital economy" has also become more popular in recent years, especially during the "1024" speech last year. We need to cultivate a new engine for the digital economy and specifically point out that blockchain is the foundation of the data economy world facility. In my opinion, at the time when the old and new kinetic energy are converted, it is an inevitable trend for our country to propose the development of new infrastructure.

Chen Bo: May I ask guests, should the blockchain be a separate national infrastructure construction and become a "new infrastructure" project, just like a national highway, build a batch of national-level blockchain infrastructure to form a chain network?

Wang Xiaohui: From the current stage, the blockchain is still difficult to be proposed as a separate national infrastructure construction. Because, fundamentally, blockchain applications have yet to find a real marketization scenario for rigid demand. Many applications are still in the initial stage and exploration stage.

From the perspective of standards only, there is no real blockchain standard in the world, and domestic standards are relatively chaotic. Therefore, if the blockchain is to develop into a separate national infrastructure, the first is to establish standards; the second is to find the real blockchain application scenario . I have been studying blockchain for three years, and my main energy during this period was to find blockchain application scenarios.

In terms of technology itself, blockchain is born for finance, but finance belongs to the industry controlled by the state, and in other fields, we have not yet found a marketization scenario of rigid demand . At this time, it is too early to upgrade it to the construction of national infrastructure. However, it is possible in the future, but it will take a long time.

Zhang Shuai: In fact, when he spoke at "1024" last year, the speech clearly stated that the application of blockchain technology has been extended to many fields such as digital finance, the Internet of Things, intelligent manufacturing, and supply chain management. These areas are in the same vein as the current new infrastructure.

Therefore, the new infrastructure mentioned earlier is an infrastructure, and the blockchain is the infrastructure of these infrastructures.

In addition, Dean Wang Xiaohui just pointed out that the current blockchain field has not found a better application scenario, but in fact I don't think so, and I will discuss it later.

I would like to use an example that everyone is familiar with to make an analogy. For example, when the concept of cloud computing was first introduced in 2007 and 2008, Li Yanhong of Baidu and Ma Huateng of Tencent did not agree with it, but few people now question the cloud effect. Earlier, I saw in the prefecture-level cities that one of their government work reports was how much the company ’s “cloud rate” was. I believe in another five or ten years, there will be a concept of "on-chain rate".

However, it is a bit premature to talk about this now, just like in 2008, "whether or not to build a national cloud infrastructure". But this does not mean that the blockchain is not important in the new infrastructure.

Song Jiaji: Combining the views of President Wang and President Zhang, let me talk about my views. I believe that blockchain is definitely a basic technology at present, but it has not yet been derived to the level of infrastructure.

Take the 5G network in the communication industry as an example. The reason why 5G technology can become infrastructure is that first of all, its global standards are uniform, so that it can become an industrialized infrastructure;

Secondly, its investment subjects and operating entities are relatively clear. The application scenario is also very clear, that is, we have iterative layers of communication technology and traffic requirements. At the same time, its investment industry chain is also relatively clear. 5G technology uses operators as the main investment body and the main equipment vendors and supply chain companies above the main equipment vendors as participants.

Judging from the current development progress of the blockchain, it will become an indispensable technical element in the future information technology like cloud computing, Internet of Things, and big data. Many industries and affairs in the future will require blockchain technology. But the need does not mean that this technology has the ability to become infrastructure and industrial investment. In this regard, blockchain has a long way to go.

The first is to solve the problem of harmonization of standards and application scenarios. I recognize blockchain as a basic technology and underlying technology. However, at the national level, it will take time for the infrastructure to become a new infrastructure, and standards, laws and regulations, application scenarios, business models and other links remain to be completed.

New infrastructure drives blockchain industry in May and June BMI is expected to rise

Chen Bo: Just three mentioned that the blockchain must have certain conditions to become infrastructure, and their views on its industrialization direction are not completely consistent. Then let's talk about it in the next question: Blockchain and other areas of new infrastructure, such as 5G, artificial intelligence, industrial Internet, and the Internet of Things all have a certain combination. Impact of industrial development?

Zhang Shuai: In the previous question, I mentioned that blockchain and 5G, artificial intelligence, industrial Internet, Internet of Things, etc. are all integrated, including many application scenarios. Combining this question, I will answer it systematically.

Let's talk about the relationship between blockchain and 5G, artificial intelligence, and the industrial Internet. In fact, blockchain is not integrated with them at one level. Blockchains are not like 5G, artificial intelligence, the Industrial Internet, or the Internet of Things. They are technologies with a clear purpose and verticality. Blockchains are horizontal and connected technologies.

For example, the three elements (material, energy, and information) of human existence and development include the information connection between people and dialogue through language; and the cooperation between people is guaranteed by contract, including Ethical and legal norms. With the rise of new technologies such as 5G, artificial intelligence, and Internet of Things equipment, we are more and more moving towards the era of intelligence, which will form a society in which equipment and equipment directly exchange information and exchange value. Under this premise, the connection between the devices is based on 5G technology, and the contract between the devices will be realized through the smart contract of the blockchain.

In the first question, I mentioned that 5G, big data, artificial intelligence, and the industrial Internet are the infrastructure of the digital world. With the establishment of this infrastructure, there will be more and more new scenarios and new applications. Appeared at application points we hadn't imagined before. At these application points, the blockchain will play an indispensable role in value exchange.

Song Jiaji: After the rise of 5G, artificial intelligence, industrial Internet and other technologies, the demand for blockchain will form a positive stimulus. This is my conclusion, let me discuss it below.

With the development of the IT industry for many years, various fields are moving towards "cloudification." In the past two years, the more rapid development is the decentralization part, including the Internet of Things and the Industrial Internet.

In addition, 5G also supports low-latency, high-reliability, and Internet of Everything. These are the two biggest differences between 5G and 4G protocols. Behind these two points represents the future 5G era, there will be more things involved, such as installing sensors on cars, computers, and even drinking fountains. When these objects have communication capabilities, their data will be uploaded, so with low latency and high reliability, they will play a greater role in such scenarios that require fast processing.

However, in this kind of decentralized node data interaction, it is difficult to form trust, and its requirements for the authenticity of online data and the requirements for credible processing will become higher and higher. In this regard, there is a large industrial demand for blockchain.

So I think that blockchain will become a very important underlying technology, and it will be increasingly combined with new technologies . Just like the "1024" speech, the necessity of blockchain technology in the future is further reflected. Although affected by the epidemic in the first quarter of this year, the progress of the entire industry is slightly slower, but after the epidemic, with the rapid development of information and online, the growth of blockchain will be worth looking forward to.

Wang Xiaohui: In the new infrastructure, data is becoming more and more important. In particular, after data becomes our future means of production, the importance, security, and ownership of data need to be mentioned to a higher level. In this process, the application of blockchain technology will play a greater role. Because, the combination of blockchain and these technologies can ensure the credibility of data and ownership.

But one thing needs to be clear, in 5G, artificial intelligence and other industries, whether it is necessary to use blockchain technology. For example, if only a few of the characteristics of the blockchain such as hash algorithm, asymmetric encryption, and decentralized storage are used, it is necessary to define the characteristics of the blockchain technology again.

However , after the new infrastructure is on fire, the blockchain industry will definitely develop well. However, development must take place in areas that are closely integrated with these industries. Not all blockchain companies and applications have made good progress, and the front-end companies must survive.

Chen Bo: The PMI Index (Purchasing Manager Index) also fell to its lowest point in February. The Central Banking University's Blockchain Managers Index (BMI) of 39.3 in this issue also continued to fall sharply from 47.1 last month. After the epidemic, what is the market outlook of the blockchain industry?

Song Jiaji: During the epidemic, the industry's overall resumption of work was slow. At the beginning of March, we saw that the recovery of the production capacity of the science and technology information industry was generally at the level of 50% to 60%, and there may be further recovery by mid-March. But usually the first thing after a company resumes production is the recovery of the original capacity. The current investment direction of emerging industries is not the focus of everyone's attention.

In addition, from the perspective of implementation, some blockchain projects need to go to the field to communicate, and current business travel and other matters are not very convenient. Therefore, due to the obvious macroeconomic impact, it is normal for BMI to decline in February.

I am actually more concerned about waiting until the end of March, when the epidemic trend in April is over. At this time, the direction of change in the BMI index can further show the entire market's expectations for the blockchain, and the data can be more representative.

Wang Xiaohui: From a basic point of view, there are several main aspects of the decline in the BMI index.

First, the current economic downturn; second, our investment institutions are more cautious in terms of investment under the dual effects of the Sino-US trade war and the epidemic; third, the block chain industry has not found a real rigid demand . Most of the revenue of blockchain companies comes from investment. After the investment tightens, many companies' lives are getting more and more difficult, so it is normal for the index to decline.

Another point is to analyze.Blockchain companies have a good development momentum in 2017 and 2018, but in the first half of 2019, everyone can be described as "life is like the year", but "1024" gave the industry a boost . However, investment institutions did not invest huge amounts of money under a strong heart. Therefore, many companies are still more difficult, coupled with the impact of the epidemic, the pressure on blockchain companies is increasing.

Regarding when it will bottom out and rise, I analyze that after the epidemic is over, the BMI index will have a downward trend. It should be about six months after the end of the epidemic. After the investment industry and other industries have recovered, the BMI index may stop falling and rise.

Zhang Shuai: Just two deans have made the macro issues clearer. I want to talk about it from the perspective of the industry.

First, the blockchain industry is a process of cooling from heat in 2019, which is also in line with the Gartner curve. The blockchain gradually developed from 2013, 2014 to 2015, and 2016, reaching its peak in 2017, and then gradually entered a colder state as the bubble gradually burst. According to our judgment, 2019 should be the process of falling to the bottom and then slowly rising. The "1024" speech was actually a boost to the initial phase of the slow uplift. But this boost cannot change the whole trend, and the industry is still in the beginning of the recovery.

The decline in the BMI index is mainly due to the impact of the epidemic. From the perspective of our company, we do not have much demand for financing. However, our customers' investment in the blockchain field has been delayed. QuChain's main customers this year: one is financial large and medium-sized financial institutions; the other is local governments; in addition, there are various judicial institutions. At present, the main focus of financial institutions, governments, and judicial institutions is to resume production and resume work to fight the epidemic. Therefore, it is normal for blockchain investment to be postponed.

As the epidemic gradually passes, it is estimated that after May and June, the BMI index will return to a normal track.

For more details on the Blockchain Manager Index (BMI), see: https://www.blockob.com/bmi