Restore real blockchain: 3 dimensions and 3 misunderstandings

"Blockchain +" is relative to "Internet +", which is "blockchain + various traditional industries", but this is not a simple addition of the two, but the use of blockchain technology or features, let Blockchain is deeply integrated with traditional industries.

Blockchain originates from technological innovation, but more importantly, model innovation and thinking innovation brought about by technological innovation. Looking back at the history of Internet+, the initial development of Internet and mobileization of traditional enterprises has evolved to the present, and many traditional enterprises have used Internet thinking to create new business models. In general, the hug blockchain can be divided into three dimensions: blockchain technology, blockchain model, and blockchain thinking.

• Blockchain technology : The previous chapters on blockchain technology have been introduced in great detail. In summary, it includes distributed data storage, point-to-point transmission, consensus mechanisms, and encryption algorithms. The combination of traditional companies and blockchain technology is to apply the whole or part of the business to the "chain". This "chain" includes the public chain, the alliance chain, the private chain and the side chain.
• Blockchain model : The blockchain model can be defined as a change in the production relationship of the Token ecosystem. The core of the blockchain model is the pass-through ecosystem, and the core of the pass-through ecosystem is the incentive mechanism. The traditional company combined with the blockchain model is essentially to study and use the pass to build a perfect incentive mechanism. At present, the “coin reform”, “chain reform” and “ticket reform” proposed in the industry are all innovations within this scope.
• Blockchain thinking: Blockchain thinking is difficult to define, and the "Internet thinking" that is high above has included all good business thinking. But like Internet thinking, blockchain thinking is also extended from the traditional business community. The Internet focuses on information (data) and the blockchain focuses on value (pass). It is precisely because of the value attribute of the blockchain that it realizes the demand that the original Internet and commerce are not paid enough attention, is unwilling or unable to land, and thus forms a set of business logic, which can be called blockchain thinking.

According to blockchain technology and blockchain model analysis, blockchain thinking includes the following three elements :

a) Decentralization

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The struggle between centralization and decentralization has existed since the birth of human social life. Human nature is like living in groups and eager for freedom. In the age of slash and burn, people are afraid of the power of nature and the pressure of survival, and are more willing to give up freedom and depend on ethnic groups, villages and countries. After meeting the basic material needs, humans began to challenge the centralized organization that once belonged to in pursuit of freedom. Blockchain is driven by technology, in accordance with the idea of ​​decentralization, the pursuit of "freedom" that technology can touch.

Today's social structure is not strictly central, and there are more game factors in the birth and improvement of many systems. But not all areas have free competition, especially in the fields of energy, real estate, finance, etc. Because of the strong dependence, most of the free competition goes to monopoly or oligopoly. Bitcoin is the decentralization challenge for financial oligopoly.

Therefore, the decentralization through blockchain technology is not opposed to the existing social structure, but a balance and optimization. Decentralization is not a elimination center. It is a distributed distribution optimized for normal distribution and power law distribution structure. It is a distributed transformation of power, responsibility and profit.

b) Code is the law

Human society invented contracts when establishing credit relations. Now the spirit of the contract has become the soul of a civilized society, but the phenomenon of default is still not uncommon. It is so small that people are “putting pigeons”, and that a company’s credit bankruptcy and debt defaults seem to be another normal . In order to reduce the default rate and strengthen credit risk management, the development of the contract has gone through three stages: verbal agreement, written contract and electronic contract. The contract on the blockchain is an upgraded version of the electronic contract.

In Bitcoin, transactional accounting is carried out in a transparent public account on the blockchain to ensure the authenticity and irreparability of the transaction, thereby establishing a basis for trust and reducing the cost of trust. But from decentralized thinking, it can be inferred that any human behavior can be decentralized by referring to transaction accounting records in distributed ledgers.

Ethereum believes that human behavior is extremely complicated and cannot be handled simply by transaction accounting. Instead, it should be implemented by using a protocol . The protocol is executed by code on the blockchain , thus creating a smart contract: A set of commitments defined in digital form, including agreements on which contract participants can execute these commitments."

Therefore, the code is the law, which can be understood as the protocol code, that is, the contract can not be tampered with by code (or need to reach a certain consensus to be tampered with), and the contract is naturally performed on the open and transparent chain . Protocol code is very practical in real economic activities, especially in the financial field and supply chain. Through protocol coding, it can increase cooperation transparency, improve cooperation efficiency, reduce credit risk and improve compliance rate.

3) Consensus awareness

The blockchain acts as a decentralized network, and each participant is equal, free, and fair. If there is no consensus, the entire blockchain will no longer exist. But the consensus here is not only a consensus algorithm in a distributed system, but also a sense of cooperation and mutual benefit.

In the blockchain world, the founding team and the participants are bound to a ship through the pass, and only the cooperation and win-win will make the party gain greater benefits. This kind of incentive mechanism enables participants to exert their subjective initiative and actively participate in the operation and supervision activities of blockchain projects. We can see that many blockchain projects have a large number of self-organizing communities and communities, and they will actively help the project to promote marketing activities. This is a manifestation of consensus.

Some paradoxes and misunderstandings about "blockchain+"

Nowadays, many fields have begun to try blockchain projects. Many people feel the convenience brought by this technology, but at the same time many people try to use the blockchain as a life-saving straw, excessive mythical blockchain, thinking that The application of blockchain technology can cure all the "illness" of the enterprise. Here we need to explain some of the misunderstandings about the enterprise application blockchain.

a) Many people think that the blockchain is the money for the money?

Many people are concerned that the blockchain is not because of its core value, nor because of its distributed storage, but because it feels that the blockchain can be issued with money and can be financed! Therefore, many companies on the edge of survival want to rely on the financing of the currency to solve the survival problem of the enterprise. But is this really effective?

of course not! Many people say that it is very easy to raise money in the blockchain industry, which is not the case. The popularity of the currency financing is not brought by the blockchain itself, but by the enthusiasm of this industry, which is brought about by the popularity of this industry.

But the heat of this industry will not last forever, and financing or project progress will not always be so easy. As can be seen from a data in October 2017, once the blockchain heat has declined, more than half of the blockchain projects in the month did not meet the financing expectations. Therefore, like all other industry business models and business models, the blockchain is also serving the real economy, and the virtual blockchain will eventually perish.

b) Is “blockchain+” equal to early listing?

To answer this question, we first need to understand two concepts, namely pass and equity.

• Equity is the product of the economic behavior of the centralized organization. The size of the shares is different, and there are differences in discourse power, control rights and interest distribution . The pass is the product of the blockchain economy, and the decentralization is relatively realized. Chemical . In addition, the number of passes, does not mean the size of the right to speak, and how much control over the project.
• The main body of equity is a company, a limited company, a profit-making institution; and the main body of the blockchain may be the above-mentioned institution, or it may be a community, a community, or even a foundation, and not necessarily a joint-stock company.

Since the certificate is not equity, why do you need a price? In fact, this is the same price as radish greens and oil coal. Because the value of the certificate is used in a certain field, it requires a fair price. In the market economy system, prices are determined by market mechanisms. In the field of blockchains, prices are determined by the relationship between supply and demand between people . For example, in Ethereum, building a smart contract requires consumption of Gas, so you need to have a price to measure the consumption.

Therefore, we cannot think that “blockchain+” is a shortcut for enterprise development. Being the builder of long-term value of enterprises and industries is the only way out for enterprise development.

c) Is it possible that the blockchain will increase when it is issued?

From the perspective of microeconomics, the price of anything is determined by the balance of its power supply and demand : when the supply exceeds demand, the price of the currency falls; when the demand exceeds supply, the price of the currency rise. For example, blockchain project financing often uses Ethereum, so the price of Ethereum will rise when the blockchain financing is particularly hot, and it will fall when the blockchain financing is particularly deserted. This is a A typical example of a price determined by a supply and demand relationship.

The price of the currency will not rise out of thin air. In essence, the objective law of business in the blockchain world is the same as that of the traditional capital market. Only when it truly provides value to the society can it be recognized by the society. Accepted by the majority of users, the certificate value of such projects will become higher , and only the projects that contribute positive value will be reflected in the certificate price.

Due to the rapid development of the blockchain industry, and when people have no time to understand it, many people have been doing various things under the banner of the blockchain. Many projects, or some people, have done some bad things in the blockchain field, both in the long run and in the short term, they will overdraw the public's trust in the blockchain.

The current development of blockchain technology is still at a very early stage. If society loses trust in this technology, it will undoubtedly slow down a revolutionary technological process, and the process of civilized innovation will be delayed.

Exploration and Attempt of "Block Chain+"

The main application areas of blockchain technology involve finance, information security, supply chain, Internet of Things and public services . It can be implemented in dozens of application scenarios, as shown below.

The five main application areas of “blockchain+”

1. Financial field

The blockchain can provide a trust mechanism and have the potential to change the financial infrastructure. Various financial assets such as equity, bonds, notes, warehouse receipts, and fund shares can be integrated into the blockchain technology system and become the numbers on the chain. Assets are stored, transferred and traded on the blockchain.

The decentralization of blockchain technology can reduce transaction costs and make financial transactions more convenient, intuitive and secure. The combination of blockchain technology and the financial industry will inevitably create more and more business models, service scenarios, business processes and financial products, which will have more impact on the development of financial markets, financial institutions, financial services and financial formats. .

With the improvement of blockchain technology and the combination of blockchain technology and other financial technologies, blockchain technology will gradually adapt to the application of large-scale financial scenarios. The following table is an application case in the financial sector.

2. Public service area

Traditional public services rely on a limited data dimension, and the information obtained may not be comprehensive enough and has some lag. The non-tamperable nature of the blockchain makes the digitalization of the chain highly credible. In the fields of property rights, notarization and public welfare, new certification mechanisms can be established to improve the management level of the public service sector.

Relevant information in the public welfare process, such as donation projects, fundraising details, fund flow, and feedback from recipients, can be stored in the blockchain, and meet the requirements of the project participants' privacy protection and other relevant laws and regulations. Public announcements are made to facilitate public and social supervision. The following table is a summary of the application of typical public service area scenarios.

3. Information security field

The use of traceable and non-tamperable features of the blockchain can ensure the authenticity of the data source and ensure the unforgeability of the data. The blockchain technology will fundamentally change the security of the information propagation path. The following table is a summary of the application of the information security field scenario.

4. Internet of Things

The blockchain + Internet of Things allows each device on the IoT to operate independently, and the information generated by the entire network can be secured by intelligent contracts in the blockchain.

a) Security

Traditional IoT devices are extremely vulnerable, data is vulnerable to loss and maintenance costs are high. Typical information security risk issues for IoT devices include low firmware versions, lack of security patches, privilege vulnerabilities, excessive device network ports, and unencrypted information transfers. The consensus mechanism of the entire network node verification of the blockchain, asymmetric encryption technology and distributed data storage will greatly reduce the risk of hacker attacks.

b) credibility

The traditional Internet of Things is controlled by a centralized cloud server. Due to the security of the device and the opacity of the centralized server, the user's private data is difficult to be effectively guaranteed. The blockchain is a distributed account book. Each block is connected to each other and has its own independent working ability, ensuring that the information on the chain will not be arbitrarily falsified. Distributed accounts can therefore provide trust, ownership records, transparency, and communication support for the Internet of Things .

c) Benefit

Limited to cloud services and maintenance costs, the Internet of Things is difficult to achieve large-scale commercial use. The traditional Internet of Things realizes that the object communication is via a centralized cloud server. The drawback of this model is that with the increase of access devices, the server is facing more load, and enterprises need to invest a lot of money to maintain the normal operation of the Internet of Things system.

The blockchain technology can directly realize peer-to-peer transactions, omitting the labor expenses of other intermediary agencies or personnel in the middle, which can effectively reduce the expenses incurred by third-party services and maximize the benefits.

5, the supply chain field

The supply chain consists of a large number of participants, there is a lot of interaction and cooperation, information is discretely stored in their respective systems, lack of transparency. The lack of information makes it difficult for the participating entities to accurately understand the real-time status and existing problems of related matters and affect the synergy efficiency of the supply chain. When there is a dispute between the various subjects, it is time-consuming and laborious to prove and blame.

Blockchains allow data to be transparently transparent across entities, resulting in a complete, fluid, and non-tamperable flow of information throughout the supply chain. This can ensure that each subject finds problems in the operation of the supply chain system in a timely manner, and finds solutions in a targeted manner, thereby improving the overall efficiency of supply chain management. The following table is a scenario application in the supply chain area.

In the above, we analyzed the actual landing scenarios of “blockchain+” from five areas of finance, public services, information security, Internet of Things and supply chain . Laoties, what other areas do you think can continue to explore? Leave a message to tell the battalion commander!

Source | "From 0 to 1 comprehensive learning blockchain"

Author | Zhu Jiawei, Tan Guobin

Edit | George

Produced | Blockchain Base Camp (blockchain_camp)

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