This article originally published " People's Digital Fintech "
Author: Cai Weide, the current national expert, Beijing University of Aeronautics and Astronautics Ph.D., Northern digital society and the block chain Laboratory
Discussion on the use of blockchain has now frequently appeared in the public's field of vision. However, when the technology itself is mature enough, what will happen if the blockchain is truly applied to all aspects of life? Imagine that one day, humans will record on the chain from birth to birth.
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Will life on the chain be a beautiful credit society like "Taoyuan World" or Chumen, like the movie "Chumen's World", has been recorded under the camera for a lifetime from birth, making people want to escape? In this issue of the People's Digital FINTECH Hundred Schools Controversy column, a nationally-specialized expert Professor Cai Weide was invited to talk about the "Taoyuan World" that he believes the blockchain is used in the credit information system.
The picture comes from the Japanese beauty show
"The traffic between the hills and the hills, the chickens and dogs heard each other, the yellow hair fell down, and I was happy."
Credit information is an important mechanism of modern economy and society and can be widely used. For example, when using a credit card, personal credit information determines the success or failure of the transaction; when trading between companies, both parties will examine the other party's credit history; when the unit is recruited, both parties can check the other party's credit; when the unit applies for a loan from the bank, The credit information of the unit will be referred to. It can be said that an excellent credit reporting system will promote social and national economic development.
If a country's credit information system is safe (protects privacy), orderly (appropriate supervision), and the data is consistent (cannot be tampered), it will bring huge dividends to society. Because of this, the credit information network can provide a credible environment for social activities. This will not only affect companies or individuals, but even the national economic lifeline. Blockchain has unparalleled advantages in protecting privacy, supervision, and maintaining data consistency. A research result of MIT is that when we can establish a trust environment by digital methods, not only the integration of social order, but also the digital society will bring exponential economic growth. This is where the blockchain may bring hopeful world.
A brief history of credit reporting in China
Since 1988, China started credit reporting services, personal credit reporting started in 1996, a credit reporting authority was established in 2003, a personal credit reporting license was issued in 2015, and a hundred lines of credit reporting were established in 2018. After the credit information industry entered the market operation, the problems of asymmetric credit information, limited data collection channels, and weak data privacy protection in the traditional credit information system became more prominent. On February 23, 2018, the People's Bank of China released information that Baixing Credit Information Co., Ltd., with the approval of the Central Bank, could conduct personal credit information business. This is the first personal credit reporting license issued by the Central Bank. It represents a break from the government-led situation on behalf of the domestic personal credit reporting industry, and the credit reporting industry is becoming market-oriented.
During this time, many people are optimistic about the application of blockchain in credit reporting. Because the blockchain has non-tampering, consensus mechanism, encrypted communication, detection of lying, time stamp, and smart contract, it can protect data privacy and effectively control the sharing and traceability of credit data.
Credit card network complexity
There are five main types of credit reporting network: users, credit reporting centers, merchants (including banks, etc.), regulatory agencies, and data collection points. The data collection point can be logistics, warehouse, customs, or the Internet of Things. Due to the large number of participants, the variety of data, the volume of data, and the sources of data, it is necessary to dynamically assess the reliability of data. The fraud team can also impersonate any unit, including merchants, credit information centers, and data collection points, to obtain private information. Credit information networks also need to use mathematical game mechanisms (such as penalizing units that provide false data) to ensure that the data sent is correct. Such a credit information network system will be a complex network system combined with multi-chain, big data, artificial intelligence and other technologies.
Blockchain and credit information network
All nodes on the blockchain share data, which means that the credit reporting system also needs to design and deploy other security protocols to protect privacy. For example, only the hash information is stored on the chain, and the information can be shared only after the agreement is verified, ensuring that only units authorized by the user can get the information.
However, these solutions are not enough, because there is no guarantee that the unit that obtains the information will not disclose it. If these units make profits by selling user information, or if their systems are not secure enough, private information may still be leaked. In the past, there have been many incidents in which well-known companies were hacked and resulted in information leakage. Therefore, these user information still need to be encrypted and then distributed storage. Any attacker needs to cross two high walls (information encryption, information is not in a node) to get the information. A complete information is fragmented and stored on different servers. On these servers, it may be encrypted twice. To get a complete message, you need to know the location of all the information fragments and decrypt it after reorganization. This is a relatively good design for user privacy protection, but the server will undertake a lot of encryption and decryption and fragmentation work, the workload is greatly increased.
Digital ID will also be an important mechanism, and the new digital ID (such as Sorvin) framework will return the power to the user (previously owned by the platform company). In this way, although users control their own data and their right to use it, it also slows down the efficiency of the entire credit system because units need to go through cumbersome licensing steps to get information.
The Massachusetts Institute of Technology once proposed that the safest method is that the user's private information only exists in their own system. If someone needs this information, they will send the software to the user, and after the calculation is made at the user, the required information will be sent back. In this way, private information is always in the hands of users, and is best for users.
But such a mechanism also requires the use of blockchain to prevent users from changing the information themselves, otherwise the user's power is too great to supervise. This mechanism to protect user privacy can effectively prevent personal privacy information from being leaked, but it will also make the supervision of the supervision unit difficult. The supervisory unit may not agree to such a system design, unless under any privacy protection mechanism, the supervisory unit can have a way to get all the information.
The future of blockchain application in credit reporting
Blockchain has many advantages in credit information applications, such as data sharing and collaboration, system security, data privacy protection, and fraud prevention. But there are still many problems to be solved, such as how to find a balance between the protection of user privacy, the supervision of the supervision unit, and the prevention of attacks. This will change the credit reporting market, regulatory mechanisms, and infrastructure, so our work has only just begun.