Di Gang, deputy director of the Central Bank Digital Currency Research Institute, talks about blockchain concept, innovation and 3.0 new ecology (with full text of speech)

Source: Shallot

On November 8, the “2019 Trusted Blockchain Summit” co-sponsored by China Information and Communication Research Institute, China Communications Standards Association and Trusted Blockchain Promotion Program was held in Beijing.

At the summit, including the leaders of relevant domestic authorities, as well as leading experts, scholars and project parties in the blockchain industry at home and abroad, more than 1,000 participants attended the event, following the "10.24" carnival event (the Central Political Bureau collective After learning the blockchain), an important event in the blockchain industry.

Di Gang, deputy director of the Institute of Digital and Monetary Research of the People's Bank of China, attended the summit and spoke as a special guest. During the period, he expressed his unique insights into the basic concepts of blockchain and digital currency, the nature, innovation and application of blockchain technology. Scallions participated in this meeting and sorted out the main points of his speech (see below).

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First of all, Ding Gang stressed the need to raise awareness of the concept of blockchain and its essence. He pointed out that the blockchain is essentially the integration and innovation of many traditional technologies such as cryptography, peer-to-peer network and consensus mechanism. It is impossible to exaggerate and deify its concept and role. It is necessary to distinguish the "right and wrong" and "can" of the blockchain. And can't", take the essence of the blockchain and avoid the short board.

Secondly, Di Gang once again stressed that "coin" and "chain" cannot be confused. “While the blockchain originates in Bitcoin, the digital currency is not necessarily based on blockchain technology.” Don't misunderstand or misinterpret the blockchain, especially the role of any advanced technology to believe but not superstitious.

In the technological innovation of the blockchain, Di Gang believes that it is necessary to "work together to innovate." In terms of performance improvement, he believes that the blockchain should explore improvements from both network and computing; in terms of scalability, the blockchain mainly explores improvements from both architectural design and cross-chain interoperability; security controllable In terms of the current privacy protection algorithm, the future anti-quantum password is the key to the application.

Finally, Di Gang pointed out that the blockchain should serve the entity and continue to iteratively integrate and play a role of improvement in pragmatic innovation. "The blockchain is not a one-sided face project. It requires the community to work together to construct the integration of government, industry, research and research. Ecology.

According to Di Gang, the Central Bank Digital Money Research Institute is now working with the state to unite relevant parties to create a “2+2+1=1” ecosystem, that is, to study a theoretical system and develop a set of business standards. Break through the key technologies of the blockchain, solve the problem of data controllable sharing, and build a symbiotic application platform to form an ecological system with the model of co-construction, co-management and co-governance. Realize the three capabilities of “inclusive docking”, “controllable sharing” and “equivalence interconnection” to create a credible financial infrastructure that integrates open trade finance ecology and transparent supervision.

Di Gang also revealed that the Central Bank Digital Currency Research Institute has signed a memorandum of cooperation with the Hong Kong Trade Linkage Platform of the Hong Kong Monetary Authority to open a cross-chain of the central bank's trade finance blockchain platform and Hong Kong's first cross-bank trade linkage blockchain platform. Docking work. The central bank's trade finance blockchain platform was successfully launched in Shenzhen on September 4, 2018. As of the end of October 2019, there were 29 banks participating in the promotion and application, with 485 outlets and a business volume of approximately 75 billion yuan.

Di Gang, deputy director of the Institute of Digital Money, People's Bank of China

The shallots sorted out the speech of Di Gang at the meeting. The following is the full text of the speech:

Dear Mr. Wang, economist, director of the board of directors, leaders, distinguished guests, good morning!

Thanks to President Liu’s invitation, I am very honored to have an exchange with you at the 2019 Trusted Blockchain Summit. Here, on behalf of the Digital Money Institute of the People's Bank of China, I would like to express my warm congratulations on the convening of this summit!

All of you are experts in the blockchain, especially the speeches of several leaders, which have been deeply inspired and rewarded. The Central Bank Digital Money Institute has accumulated many years of experience in the fields of financial technology and blockchain. Some application practices. Yesterday we just participated in the Hong Kong Financial Technology Week. Blockchain technology is a hot topic in Technology Week. We have exchanged ideas with some experts in the same field and signed cooperation with the Hong Kong Trade Linkage Platform of the Hong Kong Monetary Authority. The memorandum opened the cross-linking work between the central bank's trade finance blockchain platform and Hong Kong's first cross-bank trade linkage blockchain platform.

The central bank's trade finance blockchain platform was successfully launched on September 4, 2018 in Shenzhen. As of the end of October 2019, there were 29 banks and 485 outlets participating in the promotion and application, with a business volume of approximately 75 billion yuan. Taking this opportunity, I also report to you a few points of understanding and understanding of the blockchain through practice:

The first is to raise awareness and clarify concepts.

First of all, we must raise awareness, thoroughly understand the essence of the speech of General Secretary Xi, and attach great importance to the development of blockchain technology.

Blockchain technology has now evolved into an independent technology that has become a strategic frontier for countries to compete for layout. After the UK, Germany and other countries raised the blockchain into a development strategy, on October 24, 2019, General Secretary Xi Jinping emphasized in the 18th collective study of the Political Bureau of the Central Committee that “it is important to make blockchain a core technology for independent innovation. Breakthrough." In recent years, with its unique trust-building mechanism, the blockchain has gradually become a hot technology in the field of financial technology, which helps to improve the efficiency of collaboration among multiple entities in society, reduce the cost of commercial friction, and optimize the allocation of social resource elements. It has great potential to accelerate China's digital transformation and stimulate the development of the digital economy.

Second, we must clarify the concept. The "coin" and "chain" cannot be confused.

Now the blockchain is extremely hot, and the flowers bloom all night, which is highly concerned by the whole country, but it needs rational and objective understanding. The blockchain is not the same as Bitcoin. Although blockchain originates in bitcoin, digital currency is not necessarily based on blockchain technology. In essence, the blockchain is an integrated innovation of many traditional technologies such as cryptography, peer-to-peer networks, and consensus mechanisms. It cannot exaggerate and deify its concepts and functions. People with different professional backgrounds often have different understandings of blockchains. The blockchain you are talking about is often not the blockchain I am talking about. Therefore, do not misunderstand or misinterpret the blockchain, especially for any advanced technology. Believe but not superstitious.

Once again, we must develop our strengths and avoid weaknesses. We must take the best of the blockchain and avoid shortcomings.

The blockchain sacrifices system processing performance and partial privacy at the expense of synchronous storage and co-computation of a large amount of redundant data. It is not suitable for high-concurrency payment scenarios such as retail payment, and also requires privacy protection for business information and personal data. However, with the technical advantages of collective maintenance, multi-party cooperation, provable traceability and credible sharing, it is expected to explore multi-party co-construction systems, break information sub-islands and accelerate data in public service areas such as depositing, securing, and trade finance. Letter sharing, reshaping multi-party collaboration mechanisms. Therefore, we need to find the application scenario, we can't catch up with the technology block for the blockchain and the blockchain. We must correctly understand the applicable scenario of blockchain technology. Not all projects need blockchain, nor all data. All need to go on the chain. Blockchain technology itself has neutral characteristics. What technology is used, the first consideration is what problem to solve. Before using blockchain technology, think about how it will be without blockchain, and whether there is better cost and better effect. technology. The use of blockchain technology will bring new benefits. Many cases nowadays do not use a single technology. Blockchains are often used in combination with other technologies or used in local scenarios for different problems. Practice has proved that mixing different technologies can achieve the best comprehensive effect.

Finally, we must pragmatically advance, blockchain is not a one-sided face project.

It is undeniable that from the birth to the present, the blockchain technology developed for ten years is still in the early stage of development, facing challenges in many aspects such as efficiency, safety, standards and compliance. Therefore, we do not overestimate its current role, but do not underestimate the potential of the future, but should calmly think and practice hard, how to let the blockchain resolve the pain points of the industry, and let the blockchain serve the real economy deeply. From the implementation path, the blockchain is a complex system engineering with systemic, long-term and complex features. We often encounter "how does the engineering implementation have system vulnerabilities?" "How do the data in the chain chain match?" Therefore, we should objectively understand that there is no technology that can be used to protect the world. For blockchains, we should consider the requirements of multiple dimensions such as market development, risk management and legal compliance, chain linkage and technical business integration. Pay equal attention to innovation and management, and give full play to the digital empowerment potential of blockchain+.

The second is to focus on technology and work together to innovate.

In 2019, blockchain technology is continuously promoting the iterative update of technology in the three aspects of “performance improvement”, “scalability” and “safety controllable” under the cohesive force, joint innovation and joint efforts of all sectors of society.

Regarding performance improvement, the blockchain explores improvements in both network and computing.

First talk about network optimization.

As we all know, blockchain uses end-to-end network communication mechanism, network delay jitter will significantly affect message delivery and data update, which is a key indicator affecting blockchain performance. Therefore, the industry has realized the “cost reduction and efficiency increase” of network communication from the aspects of message compression and reducing the scope of message broadcasting, and improved the performance level of the blockchain.

Second, talk about calculation improvements.

On the one hand, the performance of the blockchain is mainly limited by the execution efficiency of the transaction, the transaction execution efficiency is low, and it is closely related to the intelligent serial execution of the smart contract in sequence and the calculation of energy efficiency limitation. At the same time, the current CPU is a multi-core CPU, and the smart contract does not give full play to the computing advantages of multi-core CPUs. Therefore, the industry is studying the parallel execution framework of smart contracts, giving full play to the computing power advantages of multi-core CPUs and cluster architectures, and improving the efficiency of transaction execution. On the other hand, the industry has further improved the transaction processing performance and universality of the blockchain platform by selecting a streamlined instruction set, designing a new smart contract language, and adopting a compatible and efficient bytecode format.

In terms of improving scalability, the blockchain mainly explores improvements from both architectural design and cross-chain interoperability.

At the architecture design level, on the one hand, by micro-serving the node functions, in addition to flexible combination and replacement of function modules such as cryptographic modules, consensus algorithms, virtual machines, etc., it is also possible to horizontally expand performance bottlenecks for nodes. Features and performance provide the benefits of scalability. On the other hand, the centralized and distributed hybrid architecture has attracted more attention from the industry, and the characteristics of hierarchical network and mixed consensus have been gradually derived from the characteristics of random verification functions.

At the cross-chain interoperability level, the interconnection between multiple chains is the focus of attention in 2019. At present, most of the mainstream cross-chain platforms adopt the relay mode, which mainly faces the access and intercommunication of the isomorphic chain. Cross-chain interoperability between heterogeneous alliance chains is slow, after all, programming languages, system interfaces, and smart contract execution logic are inconsistent. Compared with the cross-chain interoperability of the homogeneous alliance chain, the cross-chain of the heterogeneous alliance chain is still full of challenges, and more breakthroughs are expected in the future.

With regard to security and control, the current privacy protection algorithm and future anti-quantum passwords have become the key factors for the application.

The blockchain avoids the problem of single point of failure by highly redundant data. Any node is equal. If there is a failure, you can re-access the system for data synchronization without worrying about data loss. However, a high degree of information redundancy poses a major challenge to the protection of personal privacy and trade secrets. On the one hand, the zero-knowledge proof and multi-party secure computing solve the cross-matching and aggregation utilization of data, so that commercial applications can be truly used; on the other hand, with the advent of Google Quantum Computer, how to develop commercial anti-compatibility The quantum cryptosystem is also the focus of our attention.

The third is the service entity and iterative fusion.

Take the central bank trade blockchain platform as an example. Trade finance is a medium-low frequency transaction involving multiple entities and multiple links, and mutual trust and sharing, especially for cross-border business, its demand and blockchain. The properties are naturally matched. Trade finance is also constantly innovating.

The 1.0 phase is a systematic and digital phase, and the business process is online. It is a process of “manually moving”, and the risk is mainly controlled by offline;

The 2.0 phase is the platformization phase. It is based on a single application scenario and is based on the blockchain. At the same time, the risk prevention and control is implemented online. At present, many companies are in the 2.0 stage. However, the 2.0 stage encountered new problems. Each scene has a blockchain and lacks standardization. The internals of each chain solve the information islands, but a new information island is formed between the chains.

Therefore, we need to jointly build a 3.0 ecosystem. The Central Bank Digital Currency Research Institute is working with the support of the state to unite relevant parties to create a “2+2+1=1” ecosystem. What is "2+2+1=1"?

The first "2" represents two sets of soft systems, constructing a set of digital economic theory system and a set of standard norms. The theoretical system mainly studies the causal and related models of technology supply and business output. Through the standard system, the business can be carried out. Abstraction and form the greatest common denominator, realizing the true optimization of business and process reengineering, fully enjoying the digital dividend.

The second "2" represents two hard breakthroughs.

• A hard breakthrough is to thoroughly implement the internship General Secretary’s instructions, and use the blockchain as a breakthrough in core technology independent innovation, focusing on key technologies such as high-throughput, cross-chain interoperability, digital identity, and privacy security protection. Innovation breakthrough
• Another hard power breakthrough is to build a public data service bus around the secure integration and cross-validation of multi-source heterogeneous public data, and comprehensively apply multi-party secure computing, zero-knowledge proof, and homomorphic encryption to improve the efficient use of public data.

Based on two "2"s, a "1" is superimposed, that is, an open platform is built to support different application developments, and finally a "1" is formed together to create a complete ecology. Focusing on the three goals of “information can be penetrated”, “trust can be passed” and “credit shareable”, technical support for regulatory implantation and risk warning, and core documents and key processes of trade finance business, so that both sides of the trade And any intermediate participant can quickly obtain real information, with cross-validation of trade data, data not tampering, and full lifecycle management of the business. Realize the three capabilities of “inclusive docking”, “controllable sharing” and “equivalence interconnection” to create a credible financial infrastructure that integrates open trade finance ecology and transparent supervision.

To sum up, it is to study a set of theoretical systems, formulate a set of business standards, break through the key technologies of blockchain, solve the problem of data controllable sharing, and build a symbiotic application platform to form an ecological model with co-construction, co-management, and co-governance. system. The day before yesterday, we signed a memorandum of cooperation with the Hong Kong Monetary Authority's trade linkage platform, officially opening the international docking work of the central bank's trade gold platform, and jointly moving towards 3.0 ecologicalization.

Comrades, friends:

This era is not only a challenging period in which there has been a big change in a hundred years, but also a period of opportunity that is rare in a hundred years. It has been a basic requirement for governments at all levels to have certain technical developments. The forward-looking nature of the technology and the layout of the technology has been approved by the Central People’s Bank of China. The bank's overall work arrangements, undertake the national legal digital currency research and development, and focus on the innovative development of financial technology. Since its inception, the Digital Money Institute has continued to strengthen its theoretical and business research capabilities in digital currency and financial technology, becoming the world's first official institution to develop digital currency.

Ladies and gentlemen:

Accelerating the innovation and development of blockchain technology and industry requires the concerted efforts of all sectors of society to construct an ecosystem of integration of government, industry, academia and research, as well as the "right and wrong", "can and cannot", and practical development zones of the blockchain. The core technology of the blockchain plays a role of improvement and inheritance development. Only in order to be innovative and stable can we achieve long-term improvement. It is the origin of the blockchain to improve understanding, rational treatment, serious study, and understanding and service entities.

Today's Trusted Blockchain Summit, well-known experts from the industry gathered together, I hope that everyone will thoroughly implement the spirit of the speech of General Secretary Xi in the 18th session of the Central Political Bureau, gather consensus, seek common vision, and jointly create blockchain. A bright future for development.

Finally, I wish this summit a complete success!

thank you all!

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