Babbitt Column | The Biggest Obstacle to Blockchain Application is the Guiding Idea

In the past few years, whenever the new year begins, the believers of the blockchain are looking forward to the blockchain application in the next year, and they expect that the new year will be the year when the blockchain application explodes. But in the past three years, blockchain applications have not produced explosive applications. The reality is very ironic. On the one hand, there is a general consensus on the huge application value of the blockchain, on the other hand, there is no blockchain application that can produce great benefits in reality. Will this situation change in 2020?

The author believes that the application of blockchain has not produced obvious results so far, not because there is no suitable application scenario, nor because the application promotion will encounter various obstacles, not to mention the problems of the blockchain technology itself. I think the biggest obstacle is the guiding ideology of blockchain users. It is precisely because of the wrong guiding ideology that there has been no blockchain application welcomed by the market so far. In the new year, if the guiding ideology of blockchain applications is incorrect, then there will still not be explosive applications.

In my opinion, the wrong guiding ideology of blockchain application mainly comes from two aspects. The first aspect is the fundamentalists from blockchainism. The second aspect is the existing business ideas.

Blockchain was created to support the operation of Bitcoin. The successful development of Bitcoin has allowed some supporters to adhere to everything in Bitcoin design, including resistance to government censorship, random joining and leaving of nodes, anonymous joining of users, transactions can be recorded through node consensus, and the entire Bitcoin system runs automatically and many more. These fundamentalists insist on these in practical applications. For different systems in system design, they consider it to be a non-blockchain application, and they believe that such applications have no real value. In a previous article ( Gu Yanxi: Opposing Dogmatism in the Application of Blockchain ), I raised a critical view of such fundamentalists. If all the content in the Bitcoin system is fully inherited, and only some details are copied, modified and optimized, such a system will certainly not be truly practical. Because the system that can be applied to the society must require the user to join by his real name, it must support the circulation of currency, and even include on-chain circulation transactions of actual assets. And all this is impossible to leave the existing regulatory system. Human society continues to evolve to this day, proving that the existing social governance system is the most reasonable of all attempts. The model of completely anonymous joining supported by the Bitcoin system and reaching consensus through technical means to achieve community governance is only feasible to a limited extent. It is impossible to expand and spread to a larger scope. It's like in today's society, there are still a few tribes like Amish. But their governance can only be limited to a very small range. Its governance and operation cannot be expanded at all. In the same way, applications developed under the guidance of Bitcoin fundamentalism will certainly not be widely promoted.

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The second biggest ideological obstacle that affects the promotion of blockchain applications comes from existing business ideas. Such a business model is a family-owned business that bears risks and benefits alone. This business model is a zero-sum game. The success of one family in the same industry comes at the expense of others. Under the guidance of this business model, there is a competitive relationship between participants of the same type. So it is impossible for a family to do anything to help other participants succeed. For example, it is impossible for competitors to share any users and information. Under the guidance of such a thinking, the application development of blockchain follows the same idea, and the result is that each company establishes its own blockchain system, and this blockchain application is dominated by itself. This idea actually treats blockchain as another technical system, such as relational databases and mobile terminals. The application and promotion of the blockchain has not been accompanied by corresponding changes in business thinking, and such applications naturally will not produce the expected results.

If you analyze most of the blockchain applications in the market so far, you will see that these applications have been developed based on the above two ideas. Under the guidance of such ideas, the development of blockchain applications will naturally not be widely promoted. In the new year, if the guiding ideology of the development and application of the blockchain is not changed, the application of the blockchain will certainly not achieve an essential breakthrough.

In the above two wrong guiding ideas, the influence of the fundamentalists of the blockchain is getting smaller and smaller. This is also reflected in the fact that there is less and less application development on the public chain. Because society has generally realized that blockchain applications developed based on such thought guidance will not produce great value. But the second idea is still deeply ingrained. The vast majority of current blockchain applications are still developed under this guidance. So it certainly won't produce obvious benefits. If this thinking does not change in 2020, then in the new year, there will still be no essential breakthroughs in the application of blockchain, that is, no killer applications will be produced.

In the new year, the development of blockchain applications must be based on the nature of the blockchain, that is, to encourage evenly matched parties to cooperate on a fair basis and then jointly obtain the collective maximum benefit. Only in such application scenarios can blockchain applications generate the greatest value. If we use this standard to analyze various scenarios in real society, we will find that such scenarios are actually universal. In fact, the functions currently being performed by many industry associations can be based on blockchain technology to expand the scope of management and achieve better results. Industry associations are formed on the basis of equal membership. The members of the association have common interests, and the association is required to maintain the rules to ensure the interests of all members. Such a social organization is a very good scenario for blockchain applications ( Gu Yanxi: From People's Commune to Smart Contract Organization ). In addition, cooperation between members in the same industry or business process is also the best scenario for blockchain applications. For example, trade finance is such a very suitable application field. Trade finance must be completed by the cooperation of multiple institutions in different countries. In the business process of trade finance, all parties are equal, and all parties can only get benefits after completing this process. Such an application scenario requires an effective cooperation and constraint mechanism to ensure the completion of this business process. Such a business scenario is the best scenario for blockchain applications. At present, in the global scope, solutions based on blockchain technology in the field of trade finance will definitely generate great long-term value.

In short, the huge value of blockchain technology is beyond doubt. However, in the application process, it needs to be applied to the appropriate scenarios under the correct guiding ideology, so that the great value of the blockchain technology can be truly exerted.

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