Dialogue with Meng Yan: Facebook sets off a wave of digital currencies

Summary
On June 18th, the global Internet leader Facebook and 28 institutions released the Libra white paper on cryptocurrency, and proposed to create a “digital low-volatility, low-inflation, globally-available digital currency”. Libra hopes to stabilize by collateralizing a variety of low-volatility assets such as central bank cash and government bonds. Will this behavior challenge the global sovereign monetary system, threaten financial stability, and seize the coinage rights monopolized by central banks? Will other Internet companies follow suit? After the demographic dividend disappears, will the Internet business model usher in a huge change with the help of the blockchain? How do financial institutions respond? Can the blockchain industry welcome large numbers of users and funds to enter the market?

On the evening of June 23, Guosheng Securities Blockchain Research Institute (hereinafter referred to as “Guosheng Blockchain”) invited the author of “Facebook Digital Currency: Origin, Significance and Consequences”, CSDN Vice President of the World's Largest Developer Community, and the Ministry of Industry and Information Technology. Meng Yan, deputy director of the Chain Reform Committee, made a guest conference call to explain in detail the main points of the Libra white paper.

The following is a dialogue record.

Q&A
Guosheng Blockchain : Good friends, good evening, I am Song Jiaji, Dean of the Chain Chain Research Institute of Guosheng Securities. Welcome everyone to participate in the conference call tonight. Our theme for this evening is Facebook. On the day of the Facebook release of the white paper last week, our team had already had a conference call. At that time, everyone did not pay much attention to this matter. After this period of fermentation, the attention of the entire capital market to this matter was great this weekend. Increase in range. We just have to invite Mr. Meng Yan to do an exchange with everyone today. To sum up, Meng is a very famous participant in the industry. He has a very large voice in the Ministry of Industry and Information Technology in Zhongguancun, and has been committed to the promotion of the entire blockchain business. Today, please come to Ms. Meng and share with everyone. At the same time, there will be members of the block chain team in Guosheng District. During the communication process, everyone can discuss the impact of this matter together. I simply started this matter. Facebook sent more than 20 industry giants last week and sent a white paper. At the beginning, our team was more skeptical about this matter. Even though the United States is very open in science and technology, Facebook is a relatively big thing in any sovereign country. From the point of view of the currency, Facebook gives a white paper that proposes to create a simple, borderless currency that serves the infrastructure of billions of people. This is essentially a stable coin. This weekend, a lot of investors actually exchanged calls and asked if it was just a simple coin. In the past few years, both domestic and foreign, ICO has a lot of money. The value of Bitcoin has been fluctuating. It has already reached more than 10,000 US dollars yesterday. It may have only 3,000 US dollars before. It is not bound to the French currency. In order to open a bridge with the virtual currency, stable currency has appeared in the past few years, which is a cryptocurrency that anchors the legal currency. The most common one is called USDT. There is a company that jumps out and wants to issue stable coins. We must have something in the first place to insinuate with the legal currency system. You can think of it as a bridge. The company said that as long as someone buys a USDT, it will deposit one US dollar in the bank. This is actually a guarantee of 100% reserve . If one day does not want USDT, you can redeem one US dollar. There is a need to pay a handling fee, which is similar to the mechanism of the margin system, in which one person can accept. The second is done by means of collateral. The mechanism is relatively complicated. It is also possible to do a package of asset collateral on the contract. At present, we first define stable coins. This is not a general issue. Facebook is a stable currency with low volatility that is globally mobile. I will probably make an introduction first, and it will be considered as a jade, and more time will be reserved for Meng Yan. I will communicate with you about the industry.

Meng Yan: I am very happy to have the opportunity to discuss this matter with you. I will introduce myself first. I am a technical person. I was the first mobile application developer in China 20 years ago. Later I worked in the IBM strategic communication department for eight years. In 2015, IBM had a new CTO. He upgraded the blockchain to a top-level technology alongside technologies such as artificial intelligence and cloud computing, and we were asked by the company to start learning the blockchain. In 2017, I decided to work full-time on the blockchain, resigned from IBM, and later proposed to the Zhengtong economy with Yuandao, the chairman of the Zhongguancun blockchain. Now do some work such as consulting, education, and evangelism. Thank you very much for the invitation of Guosheng Securities. The reason why I would invite me to talk about this topic, the reason why President Song invited me, I want to have a relationship with an article I published recently. On June 16th, two days before the release of the Facebook white paper, we studied and judged that this matter was a big event. At that time, few people in the domestic circle paid attention to it, and did not attract enough attention in the blockchain circle. I was at the Digital Assets Research Institute. With the support of Professor Jia Ming, an article was co-operated with Teacher Shao Qing. After the publication, it caused a relatively large response. Now that the white paper has been out for a few days, many people have interpreted it. The impact of this matter in our circle and even in the entire financial sector has exceeded my expectations. I am also very happy to have a chance to share some of my research and some opinions after a few days in the white paper. I will also give you a report. I hope to introduce my part between 30-40 minutes, then Have an exchange with friends.

I am mainly divided into three parts today. First, the main meaning of Facebook currency. As soon as we come up to the point, let's talk about this main meaning. Let's talk about the conclusion first. When you say this conclusion, you will have some doubts, but it doesn't matter. Let us first put forward the views of these people. If you have any doubts, you can record the discussion we will discuss later.

We think that Libra is very significant, and we are in the circle of a party that is positively looking at this matter. We believe that there are four important meanings.

First, Libra's positioning is a super-sovereign digital currency. Teacher Zhu Jiaming is a monetary scholar in the world. He divides the money into three categories. One is called sovereign currency. The US dollar and RMB that we are very familiar with are sovereign currencies. The second is private currency. We may have lived in the house. The meal tickets issued in the compound or in the school belong to the folk currency. In fact, more than 3,000 communities around the world have their own officially issued regions or community currencies, which is a private currency. There is also a super-sovereign currency. This typical representative is the IMF, the special drawing right in the International Monetary Fund. After the emergence of the blockchain, the encrypted digital currency technology and the cryptocurrency digital technology can be merged with these three types respectively, and then three different digital currencies will be generated. If combined with the sovereign digital currency, the central bank digital currency will be formed. CBDC). China's central bank is at the forefront of CBDC research. Unfortunately, although China's central bank digital currency research is very deep, it seems to have stopped in terms of promotion. We don't know the specific situation. If digital currency is combined with private currency, it will form a free digital currency. This typical representative is the bitcoin mentioned by President Song, and a series of Ethereum. All kinds of altcoin are free digital currencies, of which bitcoin is the most. Typical representative. If combined with super-sovereign currency, it will form a so-called super-sovereign digital currency. Libra is the first super-sovereign digital currency we have seen. We have seen that it is definitely not the last one, nor the only one. There are still a large number of Will come in, this is the first meaning, positioning.

Second, Libra will make blockchain digital currency applications deeper into everyday life. Compared with the previous Bitcoin and other folk digital currencies, most of them directly or indirectly correspond to the equity share. We can't say equity, but it actually corresponds to a certain share of equity, and his technology is not mature. It is also very young and impetuous. Of course, the most important whole of our industry is a bunch of foreigners in the field of money and finance. They rush into this field and chaos, and the understanding of the theory of money has serious shortcomings and deviations. From the middle to the present, this piece has gone for ten years. The digital currency is still mainly speculated in the exchange. It is hardly used in practical applications. Apart from the black market, it is not used in practical applications. We think Libra appears smoothly. Going down can break this situation and it has far-reaching implications for the entire digital currency application and the development of the digital economy.

Third, Libra opened the curtain of mainstream technology companies entering the digital currency arena. In these two days, some people may see a group of Wang Xing in the circle of friends saying that Nakamoto is Marx and that Lez is Lenin. This is a metaphor for his metaphor. His opinion is not unique to him. Our industry There is a global opinion leader. During these two days, someone argued with him online and debated in Twitter. He asked him if Libra was starting a currency war. He said who said it was not a currency war. He thought the numbers Money is a nuclear weapon for the competition of technology companies, not only a currency war, but also a currency war nuclear weapon. He said that the previous weapons were equivalent to being placed on the table. No one would dare to use them in a circle. Now Xiaoza uses everyone who wants to use them. Just like the United States, there are nuclear weapons. Everyone wants to use nuclear. The relevant companies are sure. Will not confirm, we know the news that Korea's largest application similar to WeChat, Facebook, the name is not mentioned, the currency has entered a substantive stage. In Japan, there is a tool in Japan, South Korea, Southeast Asia that is very popular with WeChat, called Line, and it has started to move, and related reports have been reported. In addition, I also know that some other companies are also moving, but I can't say at the moment that everyone is trying to get started, and Libra itself is an open system. He will reach it in the first quarter of next year. One hundred nodes, I also know that many companies are ready to actively apply to join. If this matter is not a joint pressure from the national regulatory authorities, there will be a situation in which the competition will be followed. It will be very exciting. You may wish to wait and see. This is also very worth looking forward to to investors.

Fourth, the problem of stigma of digital currency will usher in a turning point. Bitcoin has risen in recent days. Many people say that the bull market seems to be coming back. In fact, if it is not because Libra is not necessarily, because the industry can not embark on a path of prosperity, the key depends on whether the public Being able to participate, and public participation has an important premise, that is, digital currency as a technology must have a good reputation. At this stage, this is obviously not the case. At this stage, our digital currency is more about money laundering, black market, illegal funds. Transfer, pyramid schemes, speculation, fraud, illegal financing are all linked. Regardless of whether these stigma is reasonable or unreasonable, fairness or unfairness, this is a fact at present. When people in our industry deal with the outside world, especially with some ordinary people, they are often seen by others, like us. Not serious, doing something that is not very glorious. We are also embarrassed, but is there any way to make the image change? If there is no change, the public will not enter. This industry is still a group of people. These people are undeniably still have many speculators and geeks. The market is bound to be violently fluctuating. It will continue tomorrow. We are particularly eager to see that Libra can promote many people and promote more people to re-evaluate this technology, especially the governments and mainstream institutions in various countries. We have seen that this trend has already begun. Guosheng Securities has organized this aspect. Two teleconferences, some of which also illustrate this point. If the reputation of digital currency is turned from negative to positive and people are heavily involved, this technology can really change the world.

This is four meanings. I will enter some details below. I will introduce you to some details of Libra in two parts. First, introduce the background. We don't want to come up with white papers. You don't understand the background. Actually, the white paper looks like no taste, can't understand, or it doesn't understand something. Let's talk about the development of the blockchain before Libra, and then we will explain the main points of Libra.

The first part of the overall situation of the development of the digital currency blockchain in the Libra era.

Many people attending the conference today will understand the blockchain digital currency. The blockchain and digital currency are an associated technology. The blockchain is a supporting technology for digital currency or a technology created by Bitcoin. Bitcoin is the world's first free-cryption digital currency, which reached more than $10,000 yesterday. The paper on Bitcoin was published by Nakamoto. Its online time was January 3, 2009, and it has been more than a decade now. Initially, Bitcoin has no value. On May 22, 2010, a programmer used 10,000 bits. I bought two pizzas for the first time, which is the first price. The average price is $0.004. The current price is $10,600. In nine years, it has risen by 2.65 million times. This may be the biggest asset in 2010. There may not be one.

Why can you rise so fast? What does bitcoin and blockchain do? To be honest, the core and financial payment networks are implemented on the Internet, namely payment and core financial networks.

Why is this matter so important? Want to understand this? We need to talk a little bit about history.

First of all, we must understand what is the payment and core financial network. Generally speaking, the payment network is the network of money. We transfer money from one point to another. The core financial network has to run electronic bills and electronic invoices in addition to running money. Data, technically, this data is no different from the data on the website or in your home database. Why can he represent the money? How can it be safe? It is because the data runs in a closed network and is a centralized In the closed network of the bank, outsiders like you and me are not authorized to access, so as to ensure security. Payment networks and financial networks have long existed. The IBM company I used to serve has always been a world-class hegemon in this regard. But it has always been a closed, centralized system that guarantees security in this way.

The most typical example is China's financial network CNFN. There is a system called China Advanced System CNAPS on this financial network. This is the most advanced payment system in the world. It can even be said that there is no one. We are now the second generation. It is already on the third generation. Everyone knows that we have an instant access function with online banking cross-bank remittance. This is the support behind CNAPS. In other countries, the US dollar often remits money for a few days in a week, that is, there is no such advanced system. But the advanced system is also a centralized closed, complex system, and can only be confined to one country. We feel very convenient to use WeChat and Alipay today, in fact, they need to pay for CNAPS behind them.

In this sense, WeChat and Alipay are just a payment gateway, helping us to use CNAPS in the case of authorization. What is the blockchain? This is the payment network or financial network invented by Nakamoto. What is CNAPS established with China? Bitcoin is built directly on the blockchain and is open. It has a core payment network built on the Internet, and it is decentralized. You don't need to be authorized to get a license to use it. He has several benefits: open , any People can develop applications on top of it; globalization , no approval, no need to apply for a license to connect to this network; simple , CNAPS is very advanced, there is a big price behind this, the system is constructed for a very long time, Very complicated, large payment is a system, a small payment system, a system of online banking, a third party is a system, the more complex the system is more vulnerable, the expansion is inconvenient, the blockchain is simple to the extreme It is very easy for him to expand or expand.

The blockchain system has a particularly large advantage as a financial payment network. Payment is settlement. Generally speaking, our traditional payment system payment and settlement are two steps, which are paid to settle every night. Even if we arrive at the account, this is paid in place. In fact, there will be clearing and settlement between the banks at night. If the settlement and settlement are not correct, and sometimes even manual re-inspection is required, this is the payment clearing system. The blockchain is different. He pays for liquidation. Once the payment is settled, it is settled. There is no such trouble at all. This efficiency is particularly high. Everyone knows that Morgan issued a Morgan coin in February this year. He saw this ability. He is not facing the public, nor is it solving the problem of payment between you and me. He is solving the problem of inter-agency liquidation. He values ​​blockchain payment. The ability to liquidate.

Why is a bitcoin such a good thing not a payment tool? For ten years, no one has used it in daily payments for several reasons:

First, technical reasons. Bitcoin is packaged in ten minutes and confirmed in one hour. When it is congested, it may not be confirmed in two or three days.

Second, the cost issue. Bitcoin prices have risen and the transfer fee has increased. Network congestion often costs a sum of two to three hundred yuan. It turns out that bitcoin can make a cheap and fast transfer payment for you. Now it costs two or three hundred dollars. There are big problems in this regard.

Third, deflation. Because Bitcoin is deflated, it cannot be a good exchange intermediary and accounting unit. The key issue of Bitcoin as a payment currency is deflation, and the price has risen and fallen. As mentioned by President Song, this has long been conclusive in our circle. Bitcoin has failed as a payment currency experiment. The Bitcoin core developers themselves admit that we have no intention of making Bitcoin an exchange intermediary and a billing unit. We will do a good job of value storage, but there are some bitcoin gods just getting started. The believers don't know much about it, but they are also more fanatical. They don't quite agree with these views. In fact, this is already recognized by professionals in the circle.

There is an anecdote here to share with you.

Chinese David is a password punk. In January 1998, David published a b-money white paper at the forum, which introduced the idea of ​​how to construct a digital cash. The concept of "digital cryptocurrency" was born.

Ten years later, the b-money white paper became the first source of reference in the Bitcoin white paper. Nakamoto has sighed that his own bitcoin design is just an implementation of b-money.

I don't know who Nakamoto is, but I know David's father, Dai Xiwei. When I was the editor of CSDN many years ago, I wore a book called "Crossing the River", and I became attached. There have been occasional connections over the years. When chatting together, he told me a lot of anecdotes, one of which is this:

Nakamoto sent an email to David before determining the Bitcoin program. In the mail, he asked a question: Should Bitcoin be deflated or inflation?

David did not respond to Nakamoto in time. Nakamoto has designed Bitcoin as the deflation mechanism we see today. Later, David once said that the biggest mistake of Bitcoin was to design a deterministic deflation mechanism. He also regretted that he did not reply to Nakamoto's email.

Everyone has their own opinion about whether David’s point of view is correct. I have been studying the general economy, and found in the research process that the deflation type single currency system has inherent contradictions.

The value of a pass-through economy is determined by the volume of transactions. The greater the volume of transactions, the greater the value of this pass-through economy. The volume of transactions is inversely proportional to the psychological expectations of inflation or deflation in the passport. If the user thinks that a certain pass will have inflation, in order to avoid depreciation, the user must be anxious to spend it. The recipients are also unwilling to accept such a pass in order to prevent the shrinkage of wealth. On the contrary, if the pass is believed to be deflated, others are willing to accept it, but the users holding the pass are not willing to spend it. Therefore, whether it is inflation or deflation, once the expectations are formed, the transaction volume will definitely decrease and the liquidity will weaken.

Because of these problems, the stable currency stands out. Just now, Song Yuanchang introduced it. The stable currency reflects a very strong vitality. Among the top ten encrypted digital currencies in the market capitalization, the bitcoin USBT mentioned by the former director Song is often ranked. The fifth to seventh place, the trading volume is generally ranked first or second, it uses a relatively small market value to prop up a relatively large amount of liquidity. Among the top ten digital cryptocurrencies in the market capitalization, the transaction volume is accounted for. Almost all deflation-type encrypted digital currency ratios are lower than 20%. Litecoin is better, most of the others are between ten and twenty. Some are below ten, and bitcoin is 7:16. However, the ratio of stable currency is between 400% and 1,100, which indicates that the stable currency has strong liquidity, which has been proved in practice. We hope to get rid of the situation that the entire encrypted digital currency is only speculating in the secondary market, and we will consider whether it is to stabilize the currency. At this time, we have seen a project like Libra rushing out to say that I am going to be a stable currency.

Let's take a look at the highlights of the Libra white paper , which is the five points I have summarized in the Libra white paper. Looking at the white paper, you will see a white paper on getting started. This will include an association's governance statement, a statement of reserves, technical articles, and affiliation documents.

First, stability. The white paper mentioned is called low-fluctuation digital currency. A Libra is not always able to be converted into an equal amount of local currency, and does not remain linked to a single currency. On the contrary, as the value of the underlying asset fluctuates, any Libra with local plans will fluctuate. However, the purpose of selecting reserve assets is to minimize volatility and allow Libra holders to trust that the currency can be maintained for a long time. The key is trust. This is what Libra thinks is quite transparent. He thinks that his low volatility or stability is mainly through psychological factors. That is to say, he does not have a mechanical understanding of the so-called stable currency. It is not the USDT we just mentioned. There is a dollar support behind it. The stability is supported by one dollar. I believe that you can exchange one USDT for one dollar at any time. Use this mechanism to ensure stability. . No, he said that there is a pile of asset support behind it. Almost this pile of assets can support my value. Because of the support of these assets, don’t you believe it? You believe that there is this belief in the psychological, there is this trust, I Naturally, it is stable, so he sees it very clearly. Stability is through psychology. He does not promise to achieve very stable, no fluctuations. It is not like this. On the contrary, it is clear that I am with major currencies. There will be exchange rate fluctuations between them. I am only a low-volatility exchange rate. This is the first point.

Second, a basket of money is supported. Not using a certain currency, a certain legal currency is supported. Many domestic stable currency experts, including the well-known MakerDAO expert Pan Chao, think this is a huge mistake. It should be locked in one dollar. I think this has both advantages and disadvantages.

I will talk about shortcomings first.

First, he used a basket instead of the dollar to support it. There is really no way to quickly open the situation with the help of dollar credibility.

Second, management is very complicated. It must be based on a very active foreign exchange market. To manage the reserves, the currency and ingredients included in this basket should be adjusted at any time. Let's take an example. For example, the currency basket includes half of the dollar and half of the yen. At this time, a large amount of yen is bought into the Libra. These yen will enter the basket, and the proportion of the basket will change. The dollar is less than half. The yen is more than half. At this time, Libra’s price has changed. This kind of thing changes every basket of currencies for a second. After a long time, the basket will definitely deviate from our current regulations on the proportion of the basket. The Foundation Association needs to adjust this reserve basket. At this time, it is because one hundred nodes are running a multi-centered mechanism. It is very troublesome to adjust who is not adjusting. This management is very complicated. All of us are concerned about him. tube.

There are also advantages.

First, it avoids the direct impact on the Fed’s monopoly on the US dollar distribution rights.

We are talking about USDT. We are currently being chased by the New York State Attorney General. Apart from some compliance problems, I feel that the impact of the Fed’s dollar monopoly on distribution rights is a serious problem.

I will give you a little detailed explanation of this issue. I will have a deeper understanding of Libra when I understand this issue. I will take a moment to talk about USDT.

Before March 2019, the USDT white paper clearly stated that every time a USDT is issued, one US dollar cash will be deposited in one bank account as a mortgage. This is written in the white paper before March 2019. If the company strictly adheres to its promises and does not mint new currency, he will only take one dollar in the real world and one dollar in circulation to the blockchain world. It does not threaten the Fed’s currency monopoly and currency distribution rights monopoly. This is the case before March 2019.

In March of 2019, USDT revised the white paper to make it clear that I would have a US dollar cash or equivalent asset as a collateral behind every issue of a USDT, or an equivalent asset. In the end, what assets were used to mortgage a USDT, which was opaque, and soon bought some bonds to show you what is equivalent to US dollars.

It was done by the New York General Prosecutor's investigation that it did not change the white paper: it issued 8.5USDT out of thin air at the end of last year, and gave it to the brother company exchange Bitfinex. The reason for this is that all of the $850 million bitcoin in this transaction was frozen by several governments. At that time, many users requested to redeem it on the exchange. He couldn’t get it. He ran to the brother company (the TMT of the USDT issuer). After asking for help, this gave it a 850 million USDT loan. On its balance sheet, everyone who understands financial people or money knows that the balance sheet should be balanced, so on the balance sheet, add 850 million loans to the left and 8.5 USD to the right. This is like a pole. Commercial bank operations.

We see who has the power to choose to buy assets to issue currency. This is the central bank, who has the power to expand credit in the form of loans, commercial banks. Tether's various behaviors have clearly told everyone that I am a central bank and a commercial bank. Such things have not been seen in the past 150 years. It has now clearly threatened the Fed’s dollar distribution rights, except that it issued digital dollars. It’s no wonder that the New York State’s total inspections are chasing it. It is still going on and will issue another 360 million USDT last week. Everyone should pay attention to this matter.

I think Libra may also follow this path. It is not the right one for the dollar. This is the first advantage. It will be easier to enter other countries' markets than a standard digital currency.

Third, in the long run, there is better liquidity. This involves a relatively cutting-edge monetary theory, symmetry and ignorance. I will not say this.

We say that the third point of the white paper that deserves attention is not fulfilled. This is also the biggest difference between Libra and the USDT we already know and all other digital currencies. It clearly states in the white paper that users can't directly access my reserves. He means that users are running Libra to Libra. The foundation comes and asks them to convert into a basket of money behind them. Sorry, the Libra Foundation is not obligated to exchange this money for you. You can exchange it into the secondary market and convert it into the legal currency you need. There are a lot of market makers, there are a lot of The users do all kinds of redemption on it, you go to the secondary market, and my foundation does not give you the exchange. This ability is the privilege of the central bank. I firmly believe that Libra has a strong central bank characteristics.

Third, Libra is a dual currency system. Many people have not noticed this. They are not visible in the white paper. You can see it in the white paper of the reserve and the white paper of the association. He has another name. This is called LIT. The association will be the founder, that is, 100 founders. The node pays Libra and rewards to motivate the user to use the developer. Libra coins distributed as rewards will be placed in private to investors. The basis for this reward is LIT, which I mentioned in the dual currency.

This is a so-called equity pass. This listing is not listed for circulation. This will be another very interesting thing in our circle, because STO has always been the hottest topic among all of our digital currency or blockchain. One, so far has not been done, if LIT finds an exchange listed on the circulation, it may bring live STO.

Governance. Libra has a Libra Foundation Association to govern, and the Association is empowering a Libra Association Council to take control of it. This is equivalent to the relationship between the Politburo and the Politburo Standing Committee. You can understand this.

The Libra Association will consist of 100 nodes. At present, 27 have been identified and there are more than 70 places. I know that a lot of companies and universities want to apply, but the threshold is very high. For enterprises, it is required to have a market value of 1 billion US dollars. The savings are more than 500 million US dollars, users must have more than 20 million, and to be able to provide multinational services, if you are 20 million users in a country, it does not meet his qualifications. The university requires the top 100 in the world, and the computer system ranks in the top 100. The list of candidates left by these two screens is not long. For these encrypted digital money funds, it requires your fund to be more than 1 billion US dollars. and many more.

This requirement is very high. These nodes, if they are selected as the founding members, they must run the verification node, invest $10 million as a reserve, and provide cloud services. Facebook itself said that as a major member, I took the project off. When the project network is officially launched in the first quarter of next year, I will become an ordinary member of this hundred nodes. I was a core member of this matter before.

The association encourages these nodes to enter the secondary market to participate in the market, because the participation in the market itself has a spread, which can make money. Even if you don't make a market, you enter the association to provide you with three main interests.

First, among the foundations, the main governance role played by the association is the voting aspect of the founding members. Second, qualify for new user rewards and transaction rebates. Third, the project generates a large amount of income every year. The dividend of this income is distributed through the LIT investment token. As a founding member, you have the original LIT. Where does this income come from? Mainly from the transaction fee, the higher handling fee for cross-border exchange at the time of cross-border payment, has clearly told us that in Libra's payment network, every transaction, regardless of size, will charge a fee, this ratio may be It's very low, but if you can pay tens of trillions of dollars a year, even if you only charge one-thousandth of a thousand dollars, it will be a very large sum of money, which may exceed Facebook's annual revenue, and this profit margin is very high. High, if you have conditions to meet, you can consider applying for Libra's nodes. We must consider the attitude of the government in China, and the government may not allow it. If there are no obstacles in these areas, this is a very good investment.

The thing that excites me the most in the white paper is not anything specific above, but a statement of it. We didn't think that the people in our circle didn't think that his expression was so bold and open. As soon as he came up, Libra's mission was to establish a simple borderless currency and financial services for billions of people. Infrastructure, to do open financial services, to let hundreds of millions of people have cheap financial services. These expressions are actually very important. Before Libra came out, there was an undercurrent in our industry. This undercurrent is called open finance.

It is to use the simple, flat, open payment network or core financial network of the blockchain I mentioned just to reconstruct the entire existing closed and centralized financial system, all kinds of finance. The services have all moved here. Some people on Wall Street have done this. Silicon Valley has done more. There are also some teams in China who are also trying to work in this direction. In general, this is still a very weak action. Now Libra is straightforward in the white paper. Clearly speaking the big goals and visions and value propositions is a huge boost to the open financial movement. We think that this sport may be more meaningful than Libra itself. It is possible that there will be more organizations, companies, groups, and research in the future. Institutions will enter the field of open finance, which may change some of our financial fields in the next two or three decades, and the impact will be enormous.

I have so many opinions. I will tell you about my main interpretation in about forty minutes. It is not comprehensive. I hope to have some exchanges with my friends.

Guosheng Blockchain : Thank you, Teacher Meng for opening up the Ming Dynasty and talking to you so much. It is also very systematic. There are also many investors who ask me on WeChat and want to read some relatively systematic books. Compared with the single-point technology we have talked about before, the blockchain is really difficult to understand. From 2G to 5G, the pursuit of speed is essentially The higher the rate, the faster the rate. From the perspective of the whole architecture, this is a vertical axis. Now the horizontal axis of the blockchain is meant to make the whole transaction more transparent. To improve the fairness of the transaction, it is necessary to be transparent. Another dimension of the problem.

Many friends have told me that the efficiency of centralization can be high, and it is not efficient to centralize things. Why do you think this thing is good? That is not the same dimension that everyone is discussing. To systematically understand these things, you need to look at the relevant information more. Of course, the best way to get started is to touch the blockchain network and you know the whole transaction. In the process, including the public key, the private key, how to mine a coin, how to book, have a basic concept of these things. We can also continue to do some in-depth communication with the Guosheng blockchain team, and we can pay attention to our public number “Ji Shi Communication”.

When it comes to Libra itself, we have a few questions to ask.

Guosheng Blockchain : Hello everyone, I am Renhe Yi, a researcher in the block chain of Guosheng District. I just listened to Teacher Meng. Some of the questions I mentioned have already been answered by Ms. Meng. Including the Libra itself, the pioneer of the new financial opening, this meaning may be greater than Libra itself. This is particularly good. I also agree with this point of view.

Can you think that many people want to do it, and they are quietly laying out, Morgan or many other banks are all arranging their own coins. Suppose we don't consider the issue of supervision now. For the industry, whether it is an Internet company or other financial giants, he can do it, and other financial giants will do it. From this perspective, how does Facebook respond to the Internet or Competition in the traditional financial industry?

Meng Yan: The two of us have also cooperated very well in the recent debate on Libra. I think Facebook's main advantage in this regard is the huge user base.

You might as well imagine how Facebook will push Libra. There is a very effective way in our circle called airdrop. He doesn't need airdrops, so he can return the rights that the original user had when he saw the advertisement directly to his Facebook users through Libra. If the user gets this, he will find a way to establish an account, and then you can consider using payment or subscription. Or reward, use.

Why is Facebook doing this actively?

First, it is also under certain pressure. I mentioned in the article that his privacy door last year was under certain pressure.

Second, Xiaozha’s knowledge preparation, he is not considering this matter for a year or two, he has long been concerned about encrypting digital currency, and companies have issued their own points. He tried to invent Facebook points three years ago, not very successful, accumulating The experience, now seized the opportunity to move forward.

Third, it is also one of the best companies to do this. It has very good conditions and a first-mover advantage, and it still has a certain competitive advantage. This is not to say that only it can be done, Google, Amazon, Microsoft are likely to do this. Therefore, it has also adopted some so-called open tricks in advance. For example, Libra has become an association, allowing everyone or encouraging everyone to join in, saying that I will take a run, and when I fly, I am an ordinary member of you. In fact, he It can't be an ordinary member. It is such a large user in Facebook and other applications. He is definitely the biggest beneficiary. It poses like this. In the past few days, both in China and abroad, many forums include Some people talked about it, saying that the best way to compete with Facebook's Libra is to join the Libra Association , which has played a role in this aspect. We will not wait and see how it will develop in the future.

Guosheng Blockchain: Hello everyone, I am Sun Shuang, a researcher in the block chain of Guosheng District. I have a question here. You mentioned it just now. I want a clear answer now. Is Libra so challenging the coinage rights originally monopolized by the sovereign government? It directly said that he wanted to make a currency, and this expression was really shocking. I don't know if the Internet giant feels that he has reached such a stage.

Meng Yan: I understand your question. My conclusion is very positive, I think it is challenging monetary sovereignty.

But there are two points worth paying attention to.

First, it challenges monetary sovereignty by adopting a more gradual and roundabout measure, and it is not easy to fight it in a country ruled by law. For example, there is no legal law in South Korea that the founding power of money is monopolized by the central government. In theory, any Korean local government, provinces, cities, and cities have the power to issue their own local currency. They do have some provinces and municipalities to consider such problems. There are even some practical actions. In other Western countries, the regulations are different, so even if it is challenging the currency distribution rights of these countries, these countries cannot say that they are forbidden. It must require a process of legislation and hearing. Some can be banned and can resist. There are some bad resistances. Wang Xing has a very good analogy about this matter. There are more than 200 judicial independent zones in the world. Judicial jurisdictions are not all hard persimmons, and there are many soft ones.

Second, I have already hinted at this in the last part of the article. This tip has also caused a lot of controversy. There are some very idealistic people in our circle, because this matter has a lot of opinions on me, including a lot of criticism of my point of view. I think that it is a conspiracy that Libra might form an alliance with the US dollar. On the ignorance of financial discourse, this statement. I

Although I know that some of their arguments have some truth to them, I still insist on my judgment. I think Libra has a very high probability of forming an alliance with the US dollar. Except for the reasons I analyzed in the article, I will not repeat it. Everyone has Interested in reading the article published on June 16, there is a part of it that says it is easy to form an alliance with the dollar. In addition to my reasons, we feel that we should pay attention to some of the new developments that have taken place in the past two days. The chairman of the Federal Reserve, Powell, said that I can’t control this matter, but in fact, not only said this, but only Even if he did, he also revealed two news.

One is that the Facebook team has previously communicated with them. The two are the sum of his tone and the good information revealed that many people feel very surprised, and even many people are very disappointed. I know that some people have hoped that the US legislature or administrative agency or regulatory agency will shoot this thing directly, but did not expect Powell to say so. At this time, many people said that he said this because he did not have the power to supervise, and there are many other regulatory teams.

I would like to express my personal opinion on this point. I don't think Facebook can communicate with these regulatory authorities beforehand. It is impossible to communicate with only one. It must be that most important regulatory authorities have already passed, and may not be seen. All departments agree, but some of the most deadly problems should be cleaned up.

I have worked in a large company for eight years. I was working in the core machine department. I know that there are two very difficult ones. One is difficult to innovate and difficult to take risks. The second one is difficult to make major mistakes. A bunch of lawyers, a group of senior executives with decades of experience, and accountants, together around the table, it is difficult to have significant risks to be let go of these people, the project is a high probability they have with the US regulatory authorities in advance. I have done communication, what is the content and details of this communication? I don't know. From a technical point of view, the possibility of an alliance with the US dollar is theoretically very large. To be frank, as long as a relatively clear support behavior on the exchange rate, linked behavior, which is equivalent to supporting the dollar, this behavior is like the Chinese yuan in the 12 years of 1994-2005 anchored the dollar, has been That 12 years anchored 8.24-8.27 yuan, which is actually supporting the dollar. This kind of thing is technically easy to operate. I think Libra and the US dollar should have some tacit understanding with the major regulators of the US dollar. There is some agreement and some agreement. These are just my guesses. Everyone thinks that I am a conspiracy theory. I will not refute it. It may be. But when this thing goes on such a scale, we will have different opinions. This is my opinion on this issue, thank you.

Questioner 1: I would like to ask, now that Facebook is equivalent to digital currency, encrypted digital currency, domestic Tencent and Ali, will they set up such a company overseas to do some cryptocurrency similar to Facebook? Otherwise, the impact on them is also great.

Meng Yan: I guess for you that I think it is very likely to happen. I am not a Tencent person or a Ali person. I can’t answer them. I just strategically, I think two Giants, the two Chinese payment giants will not be unconsidered and should be prepared. This matter must be highly valued inside. I also have some friends there. In order to avoid suspicion, I did not ask them about this matter. This is not safe for them. I did not ask them directly. I know no matter what. Tencent is still Ali, the blockchain is their very important strategy, they all give very high attention. A few days ago, Ma Huateng returned a sentence under the circle of friends of a famous technical expert in our circle, saying that it is not difficult to technically. It mainly depends on supervision. In fact, I think they all have preparations. Otherwise, in the long run, This is equivalent to not being too optimistic. I believe that they must be prepared. The key to this is to supervise this matter. How do our national regulatory authorities view this issue?

Question 2: BAT is a forward-looking company in China. What are their advantages and disadvantages relative to foreign countries? Second, for the supervision, if it can see the signal of regulatory openness, where can the regulatory signal appear? Or do we think that there is a change in the positive signals of these regulatory openness?

Meng Yan: Regarding the first question, their strengths and weaknesses. Advantages A and T, I know that their blockchain technology is very advanced, very advanced, absolutely no less than Facebook, and frankly, the Facebook team started to work in this area only in March and April last year. In fact, his accumulation is not even as good as our A and T. We have several companies with very strong blockchain technology accumulation in China. Ping An is also very strong in blockchain technology, and some of our startups are also very strong. The Chinese are really not behind in the blockchain technology.

The question is where is our disadvantage? In terms of payment, this blockchain payment is particularly suitable for global cross-border payment. If it is in another country or a jurisdiction, advanced centralization systems such as China can achieve higher levels. Efficiency, we use WeChat and Alipay efficiency, this payment efficiency will be paid in the blockchain in the future, not to say that the problem is not reached, it is definitely not up to, and its payment efficiency response speed is not up to such a center. Efficiency. But the main advantages are flat, simple, easy to expand, open, permeable, ubiquitous, and cross-border aspects, these aspects are the main advantages. Although our WeChat and Alipay are very strong, mainly in China, can we continue with the Belt and Road or the already good overseas layout, continue with the blockchain, especially the impact of Facebook tools. This piece deserves our attention. We have some fights, but the challenge is not small, because the other party is 2.7 billion users. I have recently gone abroad. I can see them. They are very frequently used for whatsapp. We are using WeChat. Almost, many of them have WeChat to deal with Chinese people, but they rarely open them. Most of them use Facebook tools to communicate. I think it would be very effective to use them. We compete with them overseas. They are mature. Cross-border networks, we have to play a little bit, this is a disadvantage.

Looking at our regulatory agencies, I have no way to answer this question. We don't have any special channels to understand some of the attitudes of the regulators. We only say who the Chinese regulators are, mainly the People's Bank of China. We may pay more attention to the views and attitudes of the PBOC on this matter, especially if the People's Bank of China central bank digital currency will restart because of this matter. I think this matter. It deserves our special attention. It represents the encryption and digitization of the renminbi. We should pay special attention to this matter. As for the direct release to private enterprises, I think that is a relatively big move, I am not particularly optimistic in the short term.

Questioner 3: I just came in. I didn't hear you in the first few minutes. I want to ask you a question here. What impact do you think Libra's circulation will have on Bitcoin and Ethereum?

Meng Yan: Our circle has gradually formed a consensus that short-term and medium-term interest in Bitcoin will make more people flow into this field. We can see that Libra will carry two main duties of currency in this space, one is the exchange intermediary, and the other is the price scale. But Libra is a stable currency, not asset-based. It's relatively poor in terms of appreciation. You can enjoy his dividend every year unless you are a node. You just store Libra, it is not a very good investment. There are also rumors that the dividends will be paid to Libra investors. The association will pay dividends to Libra investors. This is not clearly stated in the white paper. What to do is not clearly written. This is the case, Libra as an investment variety may It is not particularly ideal. In this case, the value of Bitcoin as a pure investment-type digital currency is very prominent. Everyone is particularly optimistic about its development.

For the impact of our well-known Ethereum and EOS, we think it will be relatively large, because Libra is a smart contract platform that can be used on everyone's mobile phone. Facebook represents more than just a social tool, it represents the whole The digital ecology, including a large number of games behind, a variety of tools, including the companies it acquired, and the open system of these 100 alliance nodes, any company can access Libra's payment system in the application, As a result, we have been doing smart contracts, the target of the application development platform, a large wave of the second generation blockchain, including the representative work of Ethereum, EOS will form a competitive role, this thing everyone is so seen, good bit Currency, bearish ether and EOS.

I personally want to add something. I think that everything is not so limited. This reaction may be complicated. For example, the current Ethereum has now gone its own way. He is doing decentralized finance. It is very hot in our circle. One thing, called DeFi. In this matter, everyone does not need higher performance, but needs more assets, more experience, more trust. Ethereum gradually has some weather in this area, and there are more and more on it. People develop a variety of decentralized financial services, including funds, including fund custody, including stable currency, including some currency swap services, to do such things on it. I think that when more funds come in, I personally think that in the short-term and medium-term whole digital cryptocurrency field, these big projects will benefit, until we see later whether Libra will develop into a winner. Something, if that's the case, is of course more competitive with others. It's hard to say now that its performance is not as good as EOS, EOS can reach 5000 TPS, he only has 1000, we might as well wait for him. What the future will look like.

Questioner 4: Teacher Meng is good. Recently, there is a saying that Libra will lead to the use of dollar hegemony to turn to digital dollar hegemony. I want to know your point of view, whether this will happen. Second, Libra is now the first stable currency to be issued. It will definitely continue to be released later. If everyone releases it, how will the market evolve and how will the competition go? What is the focus of the competition or what is it? Domain competition. Third, stable currency or digital currency has been going on, and whether the two things of centralization and decentralization will be combined.

Meng Yan: I have thought about two of your questions. The second question I can only answer according to my current thinking.

First, you said that it will be converted into digital dollar hegemony. I personally based on the reasons I said before. I tend to answer the question. I think Libra will form an alliance with the US dollar. After the alliance, Libra will use the blockchain to be ubiquitous. It can penetrate the ability to penetrate into any corner at will, and directly penetrate into our digital life. In time, each of us will be in digital life, including buying things in e-commerce or buying various digital services in the digital field, watching movies. Or a service that rewards or subscribes to digital products, and other digital services. Other countries will find that, over time, Libra's project is a success, and people will gradually begin to price his goods with a symbol like Libra, so that the currency is inside. There is a particularly famous point of view. In fact, once a commodity is selected as a currency, it has a very strong stability. Because many people, all people will take the initiative to bring their products and services to this. The currency is anchored, and the currency itself is stabilized after anchoring.

In the history, gold and silver in the long run are double-standard. The price of gold and silver has been stable at 16:1 for a long time. Later, the silver standard was cancelled. After the cancellation, everyone anchored the price of gold. After that, the price of gold has remained stable, and the price of silver has fallen rapidly. Falling from 16:1 to 30:1, up to more than 100 to 1, when Libra is the anchoring currency for their products and services, Libra itself will be stable, and Libra is stable if it is mentioned before. Libra is in some way linked to the US dollar or cleverly connected to each other. Libra is supported by the value of the US dollar. This logic comes from this. I am considered by many people to be conspiracy theories. I still think this possibility is quite big. ,This is the first question.

The second question is what is the core competitiveness of this market. The first is traffic, and the second is the government, the government or the power of support. Third, openness. The fourth is the whole technology. Libra is still very young, especially in technology. Frankly speaking, there are a lot of public chains in our existing blockchain circle, which far exceeds its performance. It tried last year. The acquisition of three important technological infrastructures has failed. It still has a long way to go. The goal is to achieve a non-access blockchain five years later, which is what we call the traditional public chain. Comprehensive judgment of things is a key point for future competition in this market.

The third question, now that the blockchain is actually decentralized technology, will there be a combination of centralization and decentralization or how it will develop in the future. Going back to what I just said, this is a more technical issue. Today all of our blockchains are trade-offs between performance and decentralization. Bitcoin is highly decentralized at the expense of performance, EOS Sacrifice decentralization for high performance. We also know that there are now faster blockchains with higher TPS numbers, and this will continue to exist.

Libra's own statement is that it is now a firm multi-center route within five years, that is, one hundred nodes, one hundred centers, pursuing thousands of TPS performances, and at this equilibrium point, it is not considered to be bigger in this respect. The change, five years later will start a new plan, based on the technology at the time to try to complete the decentralization, in the process can maintain performance, or sacrifice performance, I think this is the current block The biggest question in the chain technology circle is that everyone is generally not too optimistic. If a technology is both decentralized and high-performance, this technology has long been discovered. It will not be miraculous in five years. Change, but no one knows what will happen. In the future, it should be a balance in the middle. I don't know if I answered it.

Guosheng Blockchain: Because today it is really an hour and a half, and the time is not too early. We will continue to follow up on this discussion and will pay close attention to some changes in the whole industry. Of course, we will also have Three conference calls continue to communicate with you about this development. Our Guosheng blockchain team is the only professional research team in the brokerage group. We have been watching this industry for five or six years. We have experienced large fluctuations at first, and we have seen the scale of BTC all the way, including Blockchain technology has such a large influence in the world, and it is also a history that witnesses the development of a subdivision. We are also very amazed that we will have more resources to invest in this research. We are very grateful for the sharing of Meng Yan just now, and I look forward to sharing with you in the follow-up exchanges. I also welcome the follow-up of Meng Yan to continue to sit with us and share.

On the whole, we think that the blockchain opportunity is that the whole primary market is larger than the secondary market. This primary market is very broad, because Bitcoin has an independent secondary market and does not need the A-share secondary market. The stock market insinuation is still an extension of the theme of Facebook itself. Especially when we see that new technology is a catalyst with fluctuations and changes, I hope everyone pays attention to this development. We are actually paying more attention to the development of the blockchain industry itself. There may be more technology and bigger changes in this area. Thank you very much for sharing with Meng Yan. We are here today for the conference call, thank you.

Meng Yan: Thank you, Song Dean.