China Business Daily: Blockchain Application Breaks First, Supply Chain Finance Focuses on Alliance Chain

Source of the article: Original title of China Business Daily: "Blockchain application breaks the supply chain, the main chain of supply chain finance is the main alliance chain"

Under the technological dividend and digital wave, blockchain is not only a base strategy for third-party technology companies, but also an industry's and funders' desire to find incremental force.

However, the application and large-scale implementation of blockchain are not easy. From passive to recognized, better integration of technology and applications undoubtedly requires participation. Whether industry, finance or third-party technology companies are trying to revitalize their resources and find more participants, especially on the blockchain For the implementation of supply chain finance.

"To increase the participation of the alliance chain, it is necessary to solve some pain points at the same time without harming the interests of financial institutions and industrial giants. The application of the blockchain can be a 'big' chain or a 'small' chain However, the premise of its application is to solve the problem of interests. "Chen Wen, deputy director of the Inclusive Finance and Intelligent Finance Research Center of Southwestern University of Finance and Economics, told the reporter of China Business Daily that at the initial stage of technology application," pulling people "is inevitable.

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Fighting for resources and added value, how can we attract participants to join?

Wang Yongzong, deputy general manager of Yunyong Network, told reporters that from the perspective of the entire industry development stage, the formation of the "supply chain finance + blockchain" alliance chain is still in a relatively early stage. The company will initially look for cooperation and have certain Scenario-based partner promotion. Faced with blockchain technology, customers' general concerns mainly come from the uncertainty of emerging technologies. As a third-party technology company, it is first necessary to ensure that when providing blockchain services, it will not affect and trouble users' original business. Under this premise, if third-party technology companies can also bring some value-added services to customers, perhaps the relevant parties will be willing to accept and try the blockchain. "This process is very similar to the development of the Internet more than a decade ago. In the early days, trade business interactions were mainly offline, and then an industrial Internet platform appeared. By bringing convenience and added value, various entities were gradually willing to accept and use it. New model. "

"Users need to nurture and guide the process." Wang Huazong said that customers from far away from technology and industry end sometimes think that blockchain is a "tall" product. The intuitive feeling is that using a blockchain platform, is it a business? Will get more complicated. In this process, what the technical service provider has to do is to dispel the customer's anxiety and bring a "feelless" experience to the customer, or in other words, it does not make the customer feel that the blockchain technology has caused a lot of business. Great influence. At the same time, by providing some value-added value, such as credit enhancement, certificate deposit, derivative financial services, etc., it attracts customer interest and recognition and participation.

Zhang Beilong, deputy general manager of Funchain Technology Beijing Branch, said that business revenue is the focus. If more participants are to join the blockchain + supply chain ecosystem, everyone must share the corresponding incremental income.

"Being able to get customers that others can't." Zhang Beilong added that unique resources, local characteristics of the economy, and government support are also the reasons why different alliance chains can survive and grow.

"The use of blockchain depends on whether the brand is willing to try it. We were very passive. The concept of blockchain was too new and the promotion was very difficult. Many brands are not willing to spend extra money to try Uncertain technology. But with the national high-level tuning and the case of landing, the brand's recognition of us has gradually increased, which has eased our passive situation to a certain extent.

From the scene application side, Aiyatong explained the process of attracting participants without hiding its confidence in mastering the scene resources. Aiyatong said, “When we first cooperated with a technology company in 2017, the technology concept was too new, and we were very tired of promoting it. Although Aiyatong covered as many as 2,600 brands, we encountered obstacles in lobbying the brands to participate .Until we met a brand that was willing to discuss blockchain applications with us, we learned that in the milk powder industry, brands are generally concerned about the popularity of their brands. If milk powder has product traceability information, its credibility and brand effect are It is very helpful. So at the current stage, the main direction of the Aiaton blockchain business is to discover blockchain scenarios, combine blockchain applications, and provide more application scenarios for technology companies, such as the recent cooperation between the company and Ant Financial One of the contents is that it provides a supply chain financial scenario. "

When talking about how to cover more in the future, Aiyatong candidly stated that at present, Aiyatong is mainly committed to digging more than 2,000 brand customers in the system.

There is no unicorn in the scene application level

Chen Wen said that the supply chain financial model itself is a closed loop, and the introduction of blockchain technology is more to prevent fraud in this closed loop of participants and reduce internal moral hazard issues. "In the initial public chain, the participation of financial institutions and industrial entities was generally not high, because this decentralized chain went to the center of financial institutions and industrial giants, but after the introduction of the alliance chain, the participation of financial institutions and industrial giants was obvious. Improve, because the application of blockchain can solve some pain points while not harming their interests.

Is it better to grab more "people" after a number of participants compete? Will the decentralized blockchain be controlled by a few financial institutions and industry giants to become a monopoly chain?

"'Small fish' is not necessarily worse than 'Big fish'." Zhang Beilong exemplified: For example, if a single main enterprise produces plastic bags, these small and micro enterprises have seasonal fluctuations or are affected by the big environment. Cannot accept large orders, greatly reduced profitability, it is often very difficult to find financial means. The blockchain can be traced back to the buyer of this company's plastic bags. If the buyers have better credit qualifications, we can grant credit to small and micro enterprises that produce plastic bags. It is hoped that the increase of the alliance chain is only a result. What is more important is that the crossover (intersection) that may occur between the alliance and the alliance in the same business area will have better credit in the case of crossover.

"The small-scale alliance chain has more formed the interest binding between the project party and the funder. This interest binding forms a natural barrier to entry. Giants cannot break through technology." Chen Wen said that the alliance chain is the lead The party can be a large investor, a large core enterprise, or even an independent technology party. The alliance chain established by the investor is to integrate the various cooperating industry parties, and it does not rule out attracting new investors. The alliance chain established by the industrial party is often more connected. Most funders, and third parties with technical capabilities are mostly platform-based models for multiple petty funders and small industrial players. As long as the demand for high-quality projects from the capital has always existed, it will inevitably strive to join multiple alliance chains. But for the industry-led alliance chain, it will be more recognition of core companies. Before joining, a screening mechanism for core companies will already be formed.

At the same time, Chen Wen also mentioned that the permissions of the relevant nodes of the blockchain in the alliance chain are already different, not completely equal in the public chain. In the future cross-chain competition, the permissions of the relevant nodes of the blockchain will be more divided. Diversity, so as to ensure the organic integration between the alliance chains under the premise that the interests of the participants are guaranteed.

ChinaSoft Jinke pointed out that "supply chain finance is closely related to industry characteristics, and in-depth understanding of business scenarios is required to design realistic financial products. Therefore, the possible regional attributes and industry attributes of its development pattern will be very obvious. It is a distributed 'community' (there is no communication between the 'community'), it is unlikely to form a unicorn. This production relationship is very similar to the 'alliance chain' in the blockchain. "

ChinaSoft Jinke believes that in the "blockchain + supply chain finance" business scenario, there are many participants involved and data is scattered; all parties are relatively equal, and none of them is in an absolute dominant position. Therefore, "decentralized" or "weak center" distributed data platforms are very suitable for this scenario, and can ensure that all parties share data equally and trust each other. This is naturally consistent with the characteristics of blockchain technology. In the future, greater integration of industry and finance has become a trend.

However, some financial practitioners have asked reporters about confusion. In the "blockchain + supply chain finance" model, blockchain is used to confirm rights and circulate. Among them, the corresponding debt-debt relationship behind the issues of authenticity and reliability is Irrevocable power of confirmation. So, if it is not that most of the market participants are in the same chain, and the power is only confirmed in a small range of chains, and only a small range of participants can be determined, what is the significance?

Wang Huazong told reporters that during the construction of the blockchain scene segment, it is still in the gradual promotion stage. In the early stage of technology application, I hope to build an all-economy alliance, such as including all participants, which is ideal, but in actual operation, it is still a promotion process from small to large. "In the case of not enough participants, the role of 'blockchain + supply chain finance' can be limited, but in the early stage of the construction of the blockchain ecosystem, it has actually played a role of demonstration. Value mining is gradually attracting business participants. "

Zhang Beilong emphasized that many people compare the blockchain to a credit machine, but taking the example of supply chain finance, the role of the blockchain is not to create credit, but to use the traceability of the blockchain to convert the core company's credit Pass to the superior (multi-level) supplier. Traditional supply chain finance revolves around core companies as a centralized platform and then connects multiple investors. But the "blockchain + supply chain finance" model is not the case. As a pan-centralized and weakly centralized model, the blockchain is different from the traditional supply chain finance initiators who want all participants to converge on the platform. The main purpose of the "chain + supply chain finance" model is to build an ecology, and the ecological participants will jointly operate the ecology and jointly profit. In detail, there are three types of participants: supply chain enterprises (small and micro enterprises that need financing), core enterprises, and funders. The original form of traditional supply chain financial centralization is that the center will become larger and more powerful, and the interests of other participants will be brought to the center, so any participant wants to be the center. In the blockchain model, participants balance each other, bringing together different commercial banks, bringing together different core companies, and different factoring agents. Among them, there will be competition in interest rates, financing, and services, which will make the ecology better and better.

The "Blockchain + Supply Chain Finance Industry Research Report" released by iResearch predicts that by 2023, blockchain can increase the penetration of the supply chain financial market by 28.3%, which will bring about an increase of about 3.6 trillion yuan in market size . The Interlink Pulse Institute report shows that there are 65 listed companies that mention blockchain in the semi-annual report in 2019. Finance has always been the main area for the development of blockchain by listed companies, and supply chain finance has become a number of The direction the company is cultivating.

Technology or giant

Although the above-mentioned industry insiders and companies emphasize that "blockchain + supply chain finance" is a "weak center" model, from a technical point of view, the future pattern of blockchain technology may not be the case.

It is understood that at present, domestic third-party technology companies and large financial institutions are very forward-looking about the deployment of blockchain technology in the financial field.

"China Blockchain Development Report (2019)" points out that the research and application of blockchain technology in China's financial industry is mainly in the form of alliance chains, showing the characteristics of large institutions gradually establishing specialized technical teams and small institutions relying on support. "Small financial institutions and enterprises mainly apply blockchain technology by joining the alliance chain established by large financial institutions or enterprises, directly using the developed blockchain system, and calling the system interface to achieve business access."

"I think that the blockchain is purely technical. The real development space in the future will not be very large compared to the application, because the third-party technology companies in the early stage were mainly doing the construction of the underlying platform, and the application of the upper-layer business at this time. The relevance is actually not great. With the introduction of subsequent industry standards for the underlying platform, I don't think the competition in the field of blockchain technology will form a main battlefield. In the future, several large-scale technology platforms may be sufficient for the output of blockchain technology. In addition, the credibility and influence of the initiator of the alliance chain is an important consideration for participating parties. "Industry sources said.

Lu Shun, director of the Wudaokou Supply Chain Research Institute, emphasized that as a tool to achieve commercial purposes, blockchain technology itself will not be the main battlefield of major financial institutions and industrial enterprises, and more basic technology research and facilities should be developed by the state. Research and development by third-party technology companies.

Practitioners believe that in addition to the big financial institutions, other financial institutions' independent research and development of blockchain technology is not economical nor "scientific." The advancement of the entire blockchain alliance chain technology is still being promoted by multiple parties. For example, the leading commercial banks independently develop the blockchain technology, but there will also be problems at certain points that require tendering. At present, the salaries of traditional banks cannot retain IT technicians, so they need tripartite forces.

Wang Huazong pointed out that if the development of the underlying technology of the blockchain is further mature and large technology companies occupy a larger market share, the technology providers of small blockchain services will lack competitiveness in the underlying technology. However, the combination of low-level technology and upper-level applications has a vast space. After all, the applications and business processes of industrial customers in each industry chain and each segment are very different. Services based on the combination of business scenarios and blockchain technology and business scenarioization are the directions that future technology companies need to consider and break through. Hang Seng Electronics, as merely providing a blockchain technology platform, is far from enough. It is actively building joint ecological services with various partners, combining scenario-based applications, and outputting blockchain technology services and overall application solutions for customers. Therefore, as a third-party technology company for blockchain technology services, in the future, it may be moving in this direction, gradually from the underlying technology research and development to the integrated solution output combined with business applications. "Deep digging at the intersection of application and technology is the key direction of development."

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