Babbitt column | Cai Weide: Blockchain application is not a wolf, but a tiger is coming.

1. We must confirm that the message is correct before we act

In 1970, the United States and Japan co-produced a movie called "Tiger!" tiger! tiger! The first half of the story tells the story of Japan’s attack on Pearl Harbor. Japan attacked Pearl Harbor, the United States barely expected, but the film gave a different story. Although the US military officer in Hawaii did not receive the news from the superiors that the Japanese army would attack Pearl Harbor, there was a lot of intelligence information sent to the commander that the Japanese army was about to strike. Despite this, the Hawaiian commander has repeatedly said that "we wait until the news of the attack is true, we only act." In this way, the commander waited until the actual attack message came before taking action. The result is self-evident. When the commander rushed to the command base, Pearl Harbor had been bombed. As the picture below, most of the planes did not take off and were blown up on the ground. Seeing this situation, the officer’s mouth could not be closed, and he stayed.

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Figure 1: In the "Tiger" movie, when the US commander arrived at the base, many planes were already blown up by the Japanese on the ground.

2. Three tigers, running fast

Since 2015, the author has been talking about the blockchain, which is considered to be a huge financial innovation in the past 500 years [3]. Visiting the UK twice in 2016, and discussing financial innovations in the blockchain with Bank of England and City of London financial experts. The talk here has nothing to do with the digital tokens. Here are the financial innovations that are legal and compliant abroad.

However, when I talked about this topic in China, some people replied that "the blockchain will not be used in China in 2016, will not be used in 2017, will not be used after 10 years, and will not be used after 10 years. It will never be used." Some people say that letting foreign countries go to fool, after a few years, you can see jokes after foreign bullying. When the author talked about this is the biggest financial innovation in 500 years, many listen to it and can't help but laugh.

Now, four years have passed. What kind of foreign jokes do we see? Is it a joke like the US military commander in Hawaii? Not three tigers in the movie, now there are many tigers [4, 5, 6]. And the new tiger will continue to appear and accelerate in the future.

tiger significance
1 IBM's stable currency The world's first stable currency is supported by the US government, challenging the SWIFT cross-border payment market
2 JPMorgan Chase Bank Stabilizing Coin The world's first bank issued stable currency and cooperated with 170 international banks. JPMorgan Chase Bank is the most important commercial bank in the United States, challenging the SWIFT cross-border payment market.
3 Facebook issued stable currency The world's most important social networking company issues stable currency, challenges SWIFT's cross-border payment market, Facebook cannot enter China, but its payment may enter the Chinese market
4 14 banks jointly issued stable coins Large banks in the world (US, Europe, Japan, Canada) have joined forces to become blockchain empire, joint operations in cross-border payment markets
5 VISA blockchain system cross-border payment system The world's most important payment system uses blockchain to challenge SWIFT's cross-border payment market

From 2015 to July 2018, the author's argument is that "the wolf is coming", indicating that this will be the future; but after July 2018, the wolf is no longer coming, but the tiger is coming, because it has arrived.

Beginning in July 2018, IBM launched the Stabilization Coin Program, a stable currency supported by the US government's FDIC, which means that the blockchain financial revolution is officially coming [8]. In the past, there was no state-sponsored stable currency issue, and IBM directly indicated in August 2018 that they were issuing "digital currency" (CBDC) or "digital dollar."

In February 2019, JPMorgan Chase Bank also issued stable currency. Coincidentally, both IBM and JPMorgan Chase have made cross-border payments. Not long after, Facebook also publicly started to make stable coins and also made cross-border payments. Analysts predict that Facebook's market value will increase, and its payment system is ready to enter the Chinese market, although social networking sites have not entered.

On June 5, 2019, 14 banks also launched stable currency for settlement (Utility Settlement Coins USC). The 14 banks, including Switzerland, Canada, the United States, the United Kingdom, Japan, and the Spanish banks, launched digital Canadian dollars, euros, pounds, Japanese yen, and US dollars (smart readers, the world's important currencies did not participate?).

A few days later, VISA also launched VISA Connect, a cross-border payment system based on blockchain. And everyone is doing cross-border payments!

Readers can think about what will happen to the cross-border support market if these projects are successful.

As we all know, these are world famous companies. For example, JPMorgan Chase is the largest bank in the United States, Facebook is the world's most famous social media, and VISA is the world's largest credit card system. Isn't it amazing when they all use blockchain?

In May 2019, the International Monetary Fund (IMF) also reported [12] that these stable currencies are digital legal currency (CBDC), which is equivalent to agreeing that IBM announced in August 2018 that their stable currency project is a digital dollar. The International Monetary Fund also lists the advantages of digital currency. These advantages have also been cited by the Bank of England, and the Bank of England also believes that digital currency is a new tool for national monetary policy and a weapon of control. Therefore, the emergence of these stable currencies can not only be regarded as the emergence of new financial products, but also bring about structural changes in the market. These stable currencies are not digital tokens that the world government is not happy with, but legal and compliant financial products that are supported and encouraged by foreign governments. For example, the stable currency issued by IBM is backed by the US government's FDIC guarantee, while the US regulatory authorities have been restricting the absence of legal digital tokens.

If the International Monetary Fund has a correct view, is it true that 14 banks issue stable currency? Will the world soon have digital Canadian dollars, digital yen, digital euros, digital dollars, and digital pounds?

Are we, like the US military commander in Hawaii, think that we must wait until the foreign country confirms that the blockchain project has started? Now foreign projects have come like floods. In fact, this is not what it is now. This phenomenon started as early as July 2018, but it is now speeding up.

Recently, some insiders revealed that this is a huge commercial competition. The foreign blockchain project is supported by the consortium and is ready to take the lead in the future world financial industry.

3. Blockchain layout

Blockchain layout requires three aspects: technology, resources, and strategy.   · Technology: The story of ZTE tells us that technology must be its own. If China continues to use foreign technology such as super-books, technology is in the hands of others, and the industry is likely to have serious problems in the future. · Resources: This time abroad is a number of heavyweight units, such as 14 banks, JP Morgan Chase and 170 international banks, IBM and 40 banks. · Strategy: The United States is divided into three channels, from money, market, to regulatory regulations.

China does not pay much attention to its own development of blockchain technology. It believes that the use of open source pseudo-chains can voluntarily give up leadership in blockchain technology. Without his own technology, there is no place in the world.

China has abundant financial resources. If resources are available to China's blockchain industry, most of them now give foreign pseudo-chains.

In the mainstream financial market, China still has no mature blockchain strategy.

4.ViSA blockchain system history

VISA originally used Chain's chain and invested $30 million to become a shareholder of Chain. The company is one of the top 3 blockchain startups in 2015 (the other two are R3 CEV and DAH). But the chain of this Chain company has always had problems. In 2016, the author believed that there was a problem with the consensus mechanism. In 2108, he participated in an international blockchain conference in Taiwan, and American professors also publicly believed that there was a problem. Finally VISA abandoned the products of the company it invested in. ViSA's blockchain payment program began in October 2016. ViSA B2B Connect was first launched in the pilot phase in November 2017 to test the bank's connection to the bank. It is now available in 30 markets and is planned to expand to more than 90 regions by the end of 2019. This will challenge the market for SWIFT cross-border payments.

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Figure 2: Architecture of the VISA system

VISA's original attitude towards the blockchain is actually: open approval, actually doubt or objection [2]. People's attitudes toward blockchain can always be divided into three types:

  • Publicly endorsed and supported by facts;
  • Public approval, private opposition, may also be strongly opposed;
  • Openly opposed.

This time, VISA has publicly agreed to private opposition, and publicly agreed to open a business, which means that it has evolved from the second view to the first.

The reader can think about it, in the end, our own unit is holding that attitude?

5.VISA blockchain system characteristics

If we look at the VISA system in Figure 2, we will find that it is not a traditional digital token system. It is more like a blockchain accounting system with the following features:

  • Without the SWIFT, the bank and other banks are directly connected, which challenges SWIFT's historical position.
  • Therefore, the participating banking system must be approved in advance, but the merchant does not pick up the chain, but passes through the bank. For example, the merchant C first obtains the instructions of the bank A, and causes the bank A, VISA, and bank B to trade on the blockchain, so that the transaction of the bank B and the merchant D is completed. So it is mainly a trading system between banks and banks. This architecture is very similar to the SWIFT system.
  • Such a system, SWIFT, was also tested in 2018 [6]. As a result, the super-book could not handle 34 banks because the “channel” technology of the super-book could not support more than this number of banks. The VISA system is very similar to SWIFT. It also uses a super ledger. How many banks can support it?
  • In addition, the business can not be on the chain, the blockchain protection is mainly the bank and VISA, and the inclusion between the merchant and the bank still needs to use the traditional mechanism.
  • This would be a payment system, and one feature of the payment system is that it must have low latency, which is not possible with the public chain.

6. SWIFT's sorrow

SWIFT has always been the center of the world's financial centre, leading the world in cross-border payments for many years. But these tiger projects that appeared today, which put SWIFT in their system? Does IBM have it? Is there VISA? Not only did IBM not, but it did not require SWIFT after publicity. Only in SWIFT's experimental report saw the use of blockchains for cross-border payments required for SWIFT systems. Doesn't this mean that the world's financial structure is going to change?

7. Foreign countries also think that the super-book is a pseudo-chain

According to foreign reports [1], the super-book is not a blockchain at all, and IBM has received many criticisms. The consensus mechanism that IBM publicly acknowledged in 2018 as a super-book is the "Kafka Consensus", a centralized consensus mechanism.

This is the question that the author raised when he gave a speech in Shenzhen in July 2017. The author’s questioning was later cited in foreign countries. In fact, on June 1, 2017, the author has told this question to IBM's global vice president from New York to visit Beijing, and said that we can help solve this technical problem. So this problem IBM knew this problem at least two years ago. Today, it is determined that the super-book is not a blockchain and it is not a Chinese patent. The US media is openly skeptical. Everyone asked why the distributed Byzantine General Agreement of the blockchain system was changed to a centralized Kafka Consensus Agreement? In April 2019, the author participated in the IEEE International Conference in Silicon Valley, USA. Many people are also talking about this issue.

8. Solution

There are still many problems with the VISA system. For example, the VISA system now has 15,000 financial institutions and 2 billion customers. This demand is far from the performance gap that 34 banks cannot support (441 times and 58 million times). Superbooks are not blockchains and have limited scalability. But this VISA system can be solved using China's Panda blockchain Internet model [7, 11]. Each bank can have its own account blockchain. After this blockchain, it can form a blockchain Internet through the blockchain of VISA [9,10], as shown in Figure 3. In this case, increasing the trading chain can support more bank participation.

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Figure 3: Blockchain Internet solves the problem of VISA system, increasing the transaction chain, many banks can join

The original VISA system merchants can not enter, can only protect VISA and banks, but this problem can also be solved. Each merchant can have its own account blockchain, connected through the transaction chain and the bank. This way each participating unit can be chained.

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Figure 4: Both merchants and banks can be chained

In this way, the VISA system can have:

  • VISA's own account chain;
  • Each bank has its own account chain;
  • VISA and banks use interactive chains to allow banks to trade with other banks;
  • Each merchant can have its own account chain;
  • Merchants and banks can use the trading chain to trade.

In this way, the VISA system can have unlimited banking and merchant chains.

The IMF report considers stable currency to be CBDC [12]. Moreover, current cross-border payment is slow, opaque, and requires high fees. To solve these problems, various groups are studying new cross-border payment systems. The Tiande chain has implemented a low-latency payment system, which is settled in the block. This method solves the problem of using the blockchain technology to realize the calculation of the balance of the third-party payment account. It not only utilizes the advantages of the blockchain technology, but also avoids complicated problems such as third-party payment reconciliation and clearing settlement, and simplifies and optimizes the business. The process, improve efficiency, reduce costs, improve productivity, and solve the complex balance calculation problem of the account in the blockchain block, and ensure the correct calculation of the account balance.


[1].Yessi Bello Perez. 3 years later, ViSA's blockchain-powered payment network finallygoes live.2019.06.12. -powered-payment-network-finally-goes-live/


[3]. Cai Weide et al., “Don, don’t tease, blockchain is the biggest financial technology innovation in 500 years?”,

[4]. Cai Weide et al., “The dollar digital currency has been born, are you ready?”,

[5]. Cai Weide et al., “Significant Events in the Digital Economy in 2018: US Government and Mainstream Markets Accept Digital Tokens”,–YJbGMkoLM5l7A

[6]. Cai Weide et al., “Learns from tens of millions of dollars – the difficulties and solutions SWIFT encountered”,

[7]. Cai Weide, “Panda-CBDC Central Bank Digital Currency Model”, .

[8]. Cai Weide, “Authentic and stable currency! Blockchain needs to be supervised | DeepHash column”,

[9]. Cai Weide et al., “One of the Chinese dreams of blockchain: blockchain internet leads China’s scientific and technological progress”,

[10]. Cai Weide et al., “Blockchain Internet”, 2017.6.3,

[11].Wei-Tek Tsai, Zihao Zhao, Chi Zhang, Lian Yu, and Enyan Deng. A Multi-Chain Model for CBDC[C]//2018 5th International Conference on Dependable Systems and Their Applications (DSA). IEEE, 2018 :25-34.

[12]. Tobias Adrian, TommasoMancini-Griffoli. Stablecoins, Central Bank Digital Currencies, andCross-Border Payments: A New Look at the International Monetary System. May2019, at the IMF-Swiss National Bank Conference, Zurich.


Cai Weide: Beihang Digital Society and Blockchain Laboratory, Tiande Technology, National Big Data (Guizhou) Comprehensive Experimental Zone Blockchain Internet Lab, Tianmin (Qingdao) International Sandbox Research Institute, CCID (Qingdao) Blockchain Research institute

He Juan: Master of Science in Beijing University of Aeronautics and Astronautics, research blockchain direction.

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