Challenges and Prospects of Blockchain 2020: DC / EP is expected to be released, Libra may no longer be "the original look"

To this day, everyone who is still on the blockchain front must firmly believe that blockchain is a useful and already valuable technology.

At the moment when 2019 is about to pass, we reviewed the historical nodes that have been critical to the blockchain industry in the past year (see "End of Year Inventory 1: Top Ten Keywords for Blockchain 2019"), and we also see the current The problems and challenges in China's global blockchain competition, and more importantly, from the status quo and challenges, see the future of the blockchain.

Challenges Faced by Blockchain Development

1. Limited social cognition and recognition, insufficient C-side perception

Although it is also called fintech "ABCD", there is still a certain social recognition and recognition gap between blockchain and big data, cloud computing, artificial intelligence, etc. in China. This is mainly due to:

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(1) Compared with big data, cloud computing, and artificial intelligence, blockchain is not only technology, but also science. As a result, a cryptocurrency market with a market value of nearly $ 200 billion has been born. Blockchain has been developed for more than ten years, and Bitcoin is still its most successful and influential application. But the problem is that the cryptocurrency market is booming. In addition, in recent years, various new gameplay methods have been derived from this. Among them, there are many MLM coins and Air coins. Therefore, in the eyes of many ordinary people, blockchain is often equated with cryptocurrencies such as Bitcoin, or it is directly referred to as a MLM scam.

Bitcoin and blockchain used to complement each other. The popularity of Bitcoin has made the blockchain well known, but today, the chaos in the cryptocurrency market has also led to the stigma of blockchain technology.

(2) As a multi-disciplinary fusion technology, there is a certain threshold for understanding the blockchain. People with different learning backgrounds and different professional experiences can understand the blockchain from different perspectives and pass on their understanding to others. Just like there are a thousand Hamlet in a thousand people's hearts, there are at least dozens of "blockchains" in a thousand people's hearts.

(3) As a low-level technology, blockchain technology has more direct effects on business scenarios, and it is difficult to reach C-end users directly. For example, when talking about artificial intelligence, you may think of robots like AlphaGo for the first time, but when it comes to blockchain, what can you think of? Encrypted digital currency may be the most perceived existence by users, but other than that, the blockchain has not seen many technical applications that make C-end users have a sense.

2. The business profit point is not clear, and the applicable scenarios need to be further explored

There are many enterprises and institutions engaged in or developing blockchain business, but few companies can really make money purely through blockchain business. Blockchain applications need to be deeply integrated with the scene to be effective. So far, in addition to encrypted digital currencies, the profitability of the blockchain business has not been particularly clear. Even if it is profitable, the project's payback period is relatively long.

An important reason for this phenomenon is that many blockchain business scenarios are not suitable for blockchain technology. The Economic Observer has previously reported that after contacting 2,000 blockchain projects, it was found that the actual landing rate was less than 5%. It needs to be clear that blockchain is not a panacea, and not all scenarios are suitable for using blockchain. Traditional centralized solutions and blockchain solutions have their own advantages. We must adapt to local conditions and choose a suitable solution based on business needs and scenario characteristics.

In addition to social and public services, commercialization scenarios that apply blockchain technology may require at least three typical conditions: in the efficiency and fairness of trust, more attention is paid to the latter; multi-party collaboration is required, and it is better not to have a clear affiliation relationship ; Participants are reluctant to surrender or trade data sovereignty, nor are they willing to share data unconditionally.

3. The core technology needs to be broken, and the gap between domestic and foreign is still obvious.

In his important 1024 speech, General Secretary Xi Jinping emphasized the need to strengthen basic research, improve original innovation capabilities, and strive to keep China at the forefront of theory in this emerging field of blockchain, occupying the commanding heights of innovation, and gaining new industrial advantages.

But the reality is that although 2018 and 2019 are both called the first year of commercial use of the blockchain, except for encrypted digital currencies, the blockchain has never appeared as a "killer application". This is related to the fact that the core technology performance of the blockchain has not made significant progress.

In addition, whether it is mainstream basic consensus algorithms, cross-chain, side chain, sharding, lightning network and other blockchain expansion technologies, or new financial derivative ecosystems such as DeFi, most of them are currently led by foreign companies or development teams. There is still much room for development in terms of the competitiveness of blockchain infrastructure and underlying technologies. However, China has tried a lot in the alliance chain, and its development has been smoother than the public chain. It is no longer empty talk to create a domestically controlled alliance chain.

4. Imbalance between supply and demand of blockchain talents, shortage of cutting-edge developers

The blockchain industry in 2019 continues to benefit: Facebook released the Libra white paper for its digital currency project, and Germany released the "German Blockchain Strategy." China's 1024 important speech raised the blockchain to the height of national strategy for the first time. Under the many good news, a domestic blockchain boom has set off, and more and more companies have begun to actively deploy the blockchain, which has led to a sharp increase in the demand for blockchain talents.

The demand for blockchain talents is increasing day by day, and many people are willing to join the blockchain wave, but there are very few talents who can truly meet the recruitment needs of blockchain companies. Earlier, when the development of the blockchain was earlier, companies were willing to recruit unskilled personnel for training. However, as more and more companies and institutions, especially many giants, have laid out, the competition on the blockchain track has become increasingly fierce. Enterprises are now more willing to recruit talents with relevant foundation or professional experience, especially compound talents who know both technology and business. The imbalance between supply and demand in the blockchain talent market is also forcing blockchain recruitment to gradually become more rational.

The problem of lack of talent in China's blockchain is becoming more apparent in terms of R & D personnel. China leads the world in blockchain patents, but the overall size of R & D personnel is relatively small. According to Forkest research statistics, there will be 5,290 Chinese blockchain developers in 2019, only 1/9 of the United States, 1/6 of India, and 1/3 of Switzerland. The lack of technical R & D personnel also explains to some extent the reasons for China's underdevelopment of blockchain infrastructure and underlying technology.

Outlook: Blockchain 2020

After brewing in 2019, the 2020 of the blockchain is a promising year. Looking ahead to 2020, we believe that the following eight trends may emerge:

1. The construction of China's blockchain regulatory system has been further strengthened, and industry and technical standards have gradually formed

From central to local, the development of China's blockchain industry in 2019 has attracted much attention. On October 24th, the Political Bureau of the CPC Central Committee conducted the eighteenth collective study on the current status and trends of blockchain technology development. The important speech of General Secretary Xi Jinping at the meeting raised the innovation and development of the blockchain industry to the national strategic height for the first time. After the 1024 important speech, governments at all levels began to intensify the introduction of blockchain policies. While supporting the development of the blockchain industry, they have increased the supervision of the virtual currency industry.

At present, China has basically formed a blockchain regulatory framework: virtual currency, ICO and other activities are mainly supervised by the People's Bank of China, the Office of the Leading Group for Internet Financial Risk Special Rectification and the China Internet Finance Association; the development of blockchain technology standards is led by the Ministry of Industry and Information Technology Responsible; the management of the filing of blockchain information services is the responsibility of the Network Information Office.

Under the guidance of large policies, the construction of China's blockchain supervision system is expected to be further strengthened in 2020: the scope of supervision is more comprehensive, the supervision technology is more scientific, and the supervision system is more standardized.

The lack of a unified industry and technology standard is one of the important factors limiting the large-scale application of blockchain. The Ministry of Industry and Information Technology has been working on the development of blockchain technology standards since 2016, and has achieved certain results. At present, the Ministry of Industry and Information Technology is actively promoting the construction of the National Blockchain and Distributed Accounting Standardization Committee.

Formulating a unified technical standard is not only conducive to the development and application of the blockchain industry, but also helps to strengthen the voice of the international standards of the blockchain. General Secretary Xi Jinping emphasized that it is necessary to strengthen the research on the standardization of blockchain and enhance the right of international discourse and rulemaking. With the leadership of the Ministry of Industry and Information Technology and the joint participation of industry, university and research, the development of the blockchain industry and technical standards will also be further formed.

2. The digital currency of the People's Bank of China is expected to come out and set off a new wave of global stable currency

China began researching digital currencies in 2014, and until August 2019, the central bank ’s digital currency was “coming soon”. China has always maintained its role as a global leader in the development of legal digital currencies.

In terms of technology selection, the central bank's digital currency does not preset a technical route. From the current point of view, the technology of the Chinese central bank's digital currency has matured. Although the central bank may not directly adopt blockchain technology, it will absorb the core of blockchain technology. According to media reports, the central bank's digital currency is expected to be led by the central bank in the near future. The four major state-owned commercial banks built by workers and peasants, China Mobile, China Telecom, and China Unicom, the three major telecommunications operators jointly participate in the Shenzhen, Suzhou and other places.

From the current point of view, the central bank's digital currency is expected to be launched in 2020. The digital currency of the People's Bank of China will accelerate China's cashless process, reduce the dependence of accounts on transactions, promote the circulation and internationalization of RMB, and provide a useful reference for the formulation and implementation of monetary policies. At the same time, with the encouragement of new policies, the launch of the central bank's digital currency is expected to attract many blockchain technology companies to invest in it. However, how to make users change the existing payment habits and choose the central bank digital currency is still a huge challenge that the central bank and all levels of underwriters (including commercial banks and commercial institutions) will face.

On the other hand, the launch of the central bank's digital currency in China may prompt more and more countries to participate in or accelerate the development of legal digital currency, and thus set off a new wave of global stable currency.

3.Blockchain is more closely integrated with big data, cloud computing, artificial intelligence, and the Internet of Things.

In his 1024 speech, General Secretary Xi Jinping emphasized the need to build a blockchain industry ecology, accelerate the deep integration of blockchain with cutting-edge information technologies such as artificial intelligence, big data, and the Internet of Things, and promote integrated innovation and integrated applications. Blockchain, as a multidisciplinary combined technology, has a good foundation for integration with big data, cloud computing, artificial intelligence and the Internet of Things technology. Take blockchain + big data as an example. Blockchain makes big data more real and accurate, while big data makes the data in the blockchain more valuable and promote each other to form the effect of 1 + 1> 2. Therefore, with policy blessings and complementary technologies, blockchain and big data, cloud computing, artificial intelligence and Internet of Things technologies will be more closely integrated in 2020.

As a new generation of mobile communication technology, 5G has the characteristics of high speed, low latency, and massive access. With the advent of the era of 5G commercialization and the intelligent connection of all things, the relationship between blockchain and communication technology will also change from a simple phase “+” to a phase “×”. 5G will improve the data consistency of the blockchain network, enhance the security of the blockchain network, reduce blockages and forks caused by network delays, improve the scalability of the blockchain, and promote the faster implementation of blockchain applications and networks Deeper changes in the system.

4. To G business will remain hot, but the difference between the development path and Europe and the United States will become more obvious.

With the encouragement and support of blockchain technology in China, local governments frequently issue blockchain plans and use blockchain technology to transform public services and other areas. “Blockchain + government affairs” became the hottest in the second half of 2019. Application scenarios. It is foreseeable that domestic blockchains will still remain hot in the To G field in 2020.

Under the premise of no major changes in the macro environment, the differences in the development path of blockchains at home and abroad will become increasingly apparent. China's policy-driven, alliance-dominated landscape will not change, while European and American blockchains will be more market-driven, dominated by the underlying technology of public chains, and more business institutions will participate in digital currencies R & D and business model exploration.

5. The organization layout is more rational, and the actual application scenarios are more abundant

In the first 10 months of 2019, there were 8,895 new blockchain companies in mainland China. Especially after the 1024 speech, many enterprises and institutions have announced the layout of the blockchain, and the boom of the concept of the blockchain has set off again. What followed was strict regulation of the entire virtual currency industry.

Blockchain technology cannot solve all problems and is not suitable for all scenarios. After brewing in 2019, coupled with the dual blessings of policy and supervision, more and more enterprises will take a more rational view of blockchain technology and actively explore more practical application scenarios for blockchain.

6. There will be more interoperability between blockchains, and cross-chain technology is expected to break through

As the development and application of public and alliance chains gradually mature, any single blockchain system cannot solve all problems. Blockchain interoperability can effectively improve the scalability and efficiency of the blockchain. When all blockchains are connected and interoperable, it will bring more capital liquidity, better user experience, and more possible application scenarios.

In 2019, blockchain interoperability has attracted enough attention. By 2020, we are likely to see more integration of blockchain systems, and cross-chain technology is also expected to make further breakthroughs.

7. Libra is expected to come out, but may no longer be "the original look"

Since Libra released the white paper on June 18, 2019, it has aroused attention from all walks of life and global heated discussions. Many people are worried about Libra's prospects. The most critical reasons are two reasons: supervision is difficult to surpass and core members withdraw. Compared with other countries in the world, the United States has always been more tolerant of Libra and has never directly opposed the Libra project. On November 16, the Federal Reserve released the Financial Stability Report, and specifically analyzed Libra in the report. According to the report, like the global stablecoin plan, Libra has the potential to be rapidly and widely adopted. If properly designed and regulated, the stablecoin Libra project led by Facebook can become a "new medium of transaction." Libra's success or failure largely depends on the attitude of the Federal Reserve. As long as Libra uses technical or commercial means to dispel the US government's concerns about Libra's money laundering, smuggling, and terrorist financing, it will hopefully come out in 2020. However, in order to comply with regulatory compliance requirements, Libra will inevitably need to abandon some of the original designs. For example, the Libra white paper recently deleted the content about the dividend mechanism. Therefore, even if Libra is successfully released, it will no longer be the "initial look".

8. The concept of DeFi has received more attention and has developed more rapidly, but it is limited by the underlying technology and application scenarios, and there will be no killer applications in the short term.

DeFi is undoubtedly the biggest bright spot in the crypto digital currency market in 2019. DeFi allows cryptocurrencies to build a valuable application system based on existing blockchain infrastructure in addition to the hype. It does not rely on traditional financial assets and does not require the assistance of many supporting services in traditional finance. Through the organic combination of technology and finance, it can achieve real peer-to-peer financial services. Today, the value of the entire DeFi ecosystem has exceeded 660 million US dollars. More and more people are contacting and paying attention to the development of DeFi, and this mega trend will not change in 2020.

But we also clearly see that the current DeFi is mainly around the decentralized stablecoin project MakerDAO, and the application scenario is mainly lending. In general, due to the overall blockchain technology and application scenarios, DeFi is still in the initial stages of development. Technical support, scenario depth, commercial value, and prospects need to be deepened and verified. Killer applications may be difficult to appear in the short term.

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