Analysis of the Internal Relationship between Facebook Libra Project and Sino-US Trade Friction and Coping Strategies

Author: berberine gold, Yaosheng Ji

Two major events occurred in 2019 : the Trump administration once again provoked Sino-US trade frictions and changed the enrichment of Huawei, and Facebook launched the Libra project on the cryptocurrency program.

These two events have caused a great uproar in the fields of academia, industry, finance, internet and blockchain. Many experts and scholars have commented in the media, and many of them have insights. In the author's view, it is no accident that these two incidents occurred at this point in time, which is the inevitable result of the development of the world economy and technology. This paper attempts to explore the intrinsic link between the two events and seek a common coping strategy .

Sino-US trade friction and Huawei incident

Trump's logic behind the trade friction between China and the United States and even other important trading partners and even allies is the same: to safeguard the domestic interests of the United States . To be precise, it is to safeguard the interests of the "red-neck" class in the United States. This group of people is the basis for the victory of Trump's election. The main feature of this class is that most of the dividends they can directly participate in are from the development of the United States.

And what are the people who oppose Trump? It is Wall Street, multinational corporations and other “elite” classes that directly participate in the global production and benefit enormously. The contradiction between the "red neck" class and the "elite" class is essentially the contradiction between the global industrial chain and the local interest groups. It is no accident that Trump came to power. Some analysts pointed out that Trump is more likely to be re-elected. It is speculated that the current situation will continue for some time and the possibility of further deterioration will not be ruled out.

However, the globalization of the industrial chain is an unstoppable trend. One of the laws governing the development of human society is that the division of labor is becoming more and more detailed . At the same time, the scale of production organization is becoming larger and larger, the conflict of interest is becoming more and more fierce, and the difficulty of production management is getting higher and higher Smart humans have come up with many ways to solve these problems, including the system of chief executives under the centralized system of history, the shareholding system of modern society, and so on. These systems have made tremendous contributions to the development of human history.

Since the development of human society, the social division of production has been detailed to a screw. The largest single unit of production, Wal-Mart, has reached a million employees. However, in this process, the form of cooperation between the upstream and downstream of the industry chain is very loose, and a Trump can block it.

Benefit sharing is only institutionalized in a production unit. The benefit sharing between industrial chains is non-institutionalized and unreasonable. The strong ones eat into most of the profits of the industrial chain. Typical examples include world-famous “ "High-pass tax", as well as the wealthy enemy of Apple and Foxconn, which is full of cups, the potted group and the hard-working drivers.

And the only maverick in the world, away from capital greed, share the benefits to the employees to unite and work together, and grow together with suppliers and customers through “deep squatting,” even in the special period. On the one hand, Huawei, which is trying to maintain the healthy development of the entire industrial chain, is the first to suffer the innocent disaster.

There are rumors that Dajiang and Haikang are already within the scope of Trump's next target. We have reason to believe that Huawei will not be the last company with similar experience in accordance with the current trajectory.

How to rationalize the institutionalization and legalization of the organizational structure and benefit sharing mechanism of the upstream and downstream of the industrial chain? This problem is already imminent!

Another major cause of trade friction is exchange rate disputes . Futurist George Gilde mentioned in a recent interview with Huawei's founder Ren Zong:

"Currency itself is not a kind of wealth, but a measure of wealth, which can guide the vision and creative development of enterprises. We must have a unified measurement standard, like seconds, kilograms, amps, moles, etc., with a unified measurement standard. We are able to produce chips in Taiwan, assemble smartphones in Shenzhen, market in Cupertino, and amplify power in Israel, etc. All of these require a unified measurement standard to ensure that 1 nanometer in Shenzhen and Tongtutu It's all the same length.

Currency is a very important measurement standard for the industrial chain in international cooperation. However, the currencies of countries around the world are different and are controlled by central banks. This has caused the currency to be in a very chaotic state, which has led to a slowdown in world economic growth and the inability to further develop trade. It has also led to more divisions in various countries and conflicts in terms of monetary value. How to solve the above problems? We have to turn our attention to the current hot ecological technology – blockchain!

The fundamental reason why the blockchain is sought after by many people of insight is that he has created a new type of organization and benefit-sharing mechanism for human production activities. This organization integrates all stakeholders and even end users upstream and downstream of the industry chain. Its three main features are:

1. High-level governance through organization of industry associations; 2. Management of daily business activities through smart contracts; 3. Benefit sharing and internal settlement through Token.

This Token has both the payment properties of money and the right to enjoy the organizational development dividend, like a symbiosis of money and stocks.

The name of this organizational form is called the distributed autonomous community DAO. If before June 18, 2019, the blockchain advocated DAO is still a utopian ideal of the circle, then Facebook's Libra plan completely opened the traditional industry DAO Pandora's Box!

Libra project

Interpreting the Libra Project White Paper, we can easily see that Libra has at least three highlights compared to other cryptocurrency projects:

First, the biggest highlight of Libra's planning technology is the use of Move language.

Compared to Ethereum and other mainstream smart contract terms, Move is a "Resource Based" language. The "resources" are separated from the code modules and are independent of each other, facilitating security and formal verification. Although the Facebook white paper stated at the outset that the project was to develop a worldwide digital currency, the "resources" defined in the MOVE language hide Facebook's greater ambition: to build a resource-based Internet.

Resources can be money, or any digital asset, including digital real estate property rights, IP property rights, tourism resources, excess capacity, inventory content, supply chain products, and more. With the Move language, Libra can not only transfer money, but also add resource attributes to other content delivered on the information Internet to ensure its uniqueness, thus eliminating the possibility of theft. In addition, Move's restrictions on recursive calls have fundamentally eliminated the possibility of the resurgence of the notorious The DAO Ethereum. It can be said that the Move language is born to serve the value of the Internet or the resource Internet.

Second, the biggest highlight of Libra's plan is the complete ecology.

The founding members of the Libra Association include not only Mastercard, PayPal, PayU, Stripe, Visa and other traditionally recognized Facebook rivals in the payment business, but also upstream and downstream partners such as eBay, Uber, Vodafone, and blockchain and limelight. , academic institutions and other supporting capabilities. It's not hard to see that Facebook's ambitions are not just in the social and financial world.

Third, the biggest highlight of Libra's plan for finance is to link it to a basket of currencies.

Unlike the current mainstream stable currency, which only targets the US dollar, Libra has established a relationship with mainstream legal currency by purchasing low-volatility financial products such as major national bonds and deposits, thus making it more resistant to risks and wider. Acceptance.

Through the above analysis, we can easily find that through the Libra program, Facebook will achieve the following strategic goals:

First, build a credible social network , try to put an end to the business continuity risks brought about by the European and American media, the public, and the government's disclosure, criticism and even prosecution of Facebook's privacy protection;

Second, through the industrial chain alliance in various countries as a mortgage reserve of national debt, corporate bonds, bank deposits and Libra held by users, to achieve deep binding with local interests to ensure their strategic security;

Third, to become the digital currency central bank in the Libra economy , use its coin-coin advantage to enter the financial sector, and carry out dimensional strikes against traditional financial services such as commercial banks and insurance companies;

Fourth, build a credible payment network , enter the mobile payment, cross-border payment business, and implement the dimensionality reduction on traditional services such as WeChat payment, Alipay, and Western Union remittance;

5. With ant gold service serving only China, the US credit system is only serving North America, Libra will establish a global credit system based on complete credit , thus avoiding the credit reconstruction in the process of cross-border financing, trade and payment. Risks and costs. With the addition of more members, five to ten years later, the Libra Industry Alliance will become a globally distributed, industry-wide, self-circulating and hard-to-destroy economy across the Internet, finance and manufacturing industries. ! The economy will serve more than 3 billion people, and its services will cover all aspects of food, clothing, housing and transportation. Its economic scale will far exceed that of most countries in the world. This will be a huge monster that has never been seen in human history !

More terrible is still behind!

If the producers behind the Libra Association's e-commerce platform are also members of the Libra economy, we are not difficult to resemble the ultimate form of Libra's economic empire in the future :

Facebook uses eBay's historical sales data accumulation and real-time location and big data analysis based on instant messaging to provide accurate forecasting forecasts for the economy and direct producers to plan production. The quality credit system established based on user evaluation and feedback is related to the interests of producers, so that manufacturers do not dare or falsify. The total amount of Libra's digital currency issuance will be strictly linked to the value created by the members of the association, thus avoiding currency overshoot.

In this economy, the possibility of cutting corners, reducing overproduction, preventing inflation and financial crises may be eliminated. Even if political and economic turmoil in a single country can't shake the foundation of Libra's economic empire. The intractable nature of distributed networks will ensure that their life cycle will continue to accompany the current foreseeable social development process.

And our Taobao, Jingdong, and many more, the remaining e-commerce platforms and the manufacturers behind them will face enormous challenges.

Having said that, let's go back and look at the Huawei incident. The only reason the Trump administration is blocking Huawei is cybersecurity . This problem is caused by geopolitics. No matter how Huawei proves its innocence, it cannot obtain American trust. If it is only resolved from the political level, there is no hope in the short term.

As George Gilde and Ren Zong mentioned at the coffee forum, this political issue can be solved with technology. How to solve it, Facebook's Libra project is a good reference. Technically speaking, whether it is Huawei's ignorant trust crisis, the paradox that plagues Facebook and Google's big data and privacy protection, or AWS faces the dilemma of data management from the US government, the essence of which is caused by the current network architecture. .

At present, the centralized network architecture based on the HTTPx protocol, whether it is preventing hackers from carrying out DDOS attacks, preventing data leakage, responding to large-scale downtime of cloud service providers, meeting the network delay requirements of 5G services, or solving the bandwidth of operators The various problems such as the scissors difference between investment and income have been inadequate.

Especially with the arrival of 5G, autonomous driving, Internet of Things will be applied on a large scale, security and openness, privacy and intelligence, the contradiction between investment and return will be more prominent, if we continue to develop based on the current centralized network architecture, it is very It is difficult to develop a trusted network.

From the dialogue between Mr. and George, we can also judge that Huawei has also realized these problems and will invest $100 billion to rebuild the security network in the next five years. In this process, if Huawei can learn Facebook to use the blockchain, it can not only build a secure, trustworthy, and efficient next-generation distributed network, but also solve the strategic security problems of its business.

In the construction of value Internet, Huawei also has a good opportunity to play a key role in solving related challenges. Including the face of the $150 trillion cross-border payment market, if Huawei can transfer information while exchanging its expertise, it can also transfer value and build a value Internet gateway. The resulting business dividend is even greater in the future. A piece of growth space.

The world is full of mighty, and the people are good! In fact, Facebook is just one of the "five tigers", and traditional giants such as IBM and JP Morgan Chase are in the process of issuing stable coins . Imagine what would happen to the world if other multinational companies followed suit. Perhaps it is Ren Ming’s earth-shaking change in the next 30 years, but this change is coming faster than expected! It is not difficult to imagine that the possible form of the future world economy will be:

A multinational industrial chain economic community composed of dozens or hundreds of company alliances has become the protagonist of the world economy;

The payment function of legal currency has gradually weakened in the footsteps of gold in history, and has become a second-tier settlement and reserve tool in the digital age. Most people will use the digital currency issued by major economies as their means of payment in their daily lives;

Establish a unified unit of monetary measurement in all major economies, avoiding the risks caused by exchange rate disputes and fluctuations on upstream and downstream cooperation in the industrial chain, and the cost of industrial cooperation is drastically reduced;

The US government relies on SWIFT's monopoly to wave the financial sanctions. The big stick wants to block who will block it. Whoever wants to extradite will never return.

With the further deepening of global production and the convergence of interests between countries, it is impossible to have a war between countries. Perhaps by that time, world peace will come. This is similar to the Qin Dynasty six countries! Only this time without the use of force, but the blockchain!

This is similar to the human destiny community that Xi has greatly advocated! Only Xiaozha learns faster than us!

Poor thinking, if Facebook is not forced to split the risk, may not be on the road to blockchain. China's Huawei, BAT and Jingdong, perhaps in addition to following the example of Facebook, will not have a second road to compete with these giants.

As Ma Huateng mentioned in the circle of friends, the technology is very mature, it is not difficult, it depends on whether the regulation is allowed.

In fact, whether it is from the perspective of the Belt and Road, the internationalization of the renminbi, the challenge of the US dollar hegemony, or the participation of Chinese companies in global competition, it is extremely urgent to have a conditional liberalization of digital currency for qualified enterprises. Otherwise, whether it is Huawei, BAT or other Chinese companies, their globalization strategy will be seriously hindered, and even retreat back to the mainland!

And before the renminbi, there are dollars and euros to block the road, and then there are digital money chasing troops. If we try to follow the traditional old road, the internationalization process will be difficult. Even our Belt and Road strategy is likely to face serious challenges! Huawei, Tencent, and Alibaba are all responsible for promoting the relaxation of digital currency supervision and actively participating in it. Whether it is from the perspective of its own interests or considering the country's century-old plan, it is duty-bound!

About the Author:

Ken Huang: A well-known blockchain expert, CEO of DistributedApps in the US, expert member of the China Electronics Society Blockchain Branch, and NULS consultant. Yao Shengji: Senior expert in IT, cloud computing and blockchain of top domestic enterprises, nearly 20 years of experience, more than 10 years of overseas multinational business practice.