Editor's Note: The original "Public Chain 101" column was renamed "Chain and Producer".
After the public chain bubble, the alliance chain, which had been dormant for a year, took advantage of the supervision of the "coinless blockchain" to stand on the high ground of public opinion.
The term blockchain in China was first coined in 2016, in the financial circles. After the popularity of Bitcoin, some scholars found that the underlying technology of Bitcoin—that is, the “block chain”—had greater application prospects. However, at that time, the alliance chain was an area that received more attention.
In 2017, EOS came with $5 billion in the air, setting an astonishing ICO fundraising record; its super node election was unprecedented. Various public chains are emerging, hoping to win the right to interpret "Blockchain 3.0". The public chain means ecology and the future; there are also huge fundraising and currency issuance. The consortium chain is considered by the supporters of the public chain to be not a real blockchain, and it cannot build a huge ecology.
Feng Shui turns. In the second half of 2018, the public chain has entered a bear market, has not yet been implemented, and the supervision has been tightened. Instead, the alliance chain is even better in terms of implementation and compliance.
FunChain is an early domestic company that explored blockchain technology. It was established in 2016 and mainly focuses on alliance chains. At the tail end of the public chain boom, in early June this year, QuChain announced a financing of RMB 1.5 billion. This may be the largest funding round to date in the blockchain equity funding space.
Market followers all want to ask, why is Qulian able to raise so much money? At the WISE New Area Conference, Li Wei, the founder and CEO of QuChain, accepted an exclusive interview with Odaily, answered this question, and shared his views on what the blockchain can do, what is the true model of the blockchain, and other issues.
In addition to industries such as finance and games, Li Wei believes that blockchain plays a great role in the field of public governance. For example, to buy a house now, residents need to go through housing construction, civil affairs, land, and taxation, which is very troublesome. The process of "stamping with materials" is like doing an offline Byzantium. In the future, residents only need to use the private key to authorize, and the materials will go to each department node once, and they will not be able to call back. "The government can see exactly how many working days have been used and where the card is stuck."
As mentioned earlier, there was a "dispute between the alliance chain and the public chain" in the venture capital circle. When the public chain is hot, some investors think that only the public chain can be an ecology. "It's not that you can do whatever you want." Li Wei believes that this is just a different "play" or "direction" in the early stages of blockchain development. In the end, there will be no big difference between the alliance chain and the public chain. "The alliance chain can also build an ecology, we just don't talk about it."
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Here's a rundown of the conversation:
1. With technology and implementation, blockchain can create value
Odaily: Qulian received a huge financing of 1.5 billion yuan in June this year. I believe many people want to know why Qulian received such a large amount of financing?
Li Wei: I think there are two main points.
One is the imaginary space of blockchain.
Blockchain is a very large industry. It is not a specific application point, but an upgrade of infrastructure. I would like to compare blockchain to the mobile Internet, and the mobile Internet is still the Internet, but it does bring people's lives bring lift.
The blockchain is also the Internet, but based on the new organizational model of the blockchain, it may be able to change the existing model of the Internet. For example, the current sharing economy cannot last long, the cultivated users are not loyal enough, and customer acquisition often relies on promotional activities. Under the organizational model of the blockchain, users are not only participants in the ecology, but also beneficiaries. Will this model be more efficient and sustainable?
What I want to say is not subversion, just like WeChat and SMS, WeChat is also based on rather than subverting SMS.
The other is the precipitation of the company itself.
FunChain started very early and was established in 2016. We are one of the few companies in China that has its own underlying technology. Many domestic projects are based on foreign open source technologies. The blockchain industry is in its early stages, and only by mastering the underlying technology can it support the development of enterprises in the long run. I believe that core technology is the primary productive force.
Possessing technology is only one step, what is more important is landing. At present, there are relatively few cases of blockchain implementation, and we have already had a lot of implementation cases with financial institutions. There are 20-30 cooperative institutions, and 64 systems have been delivered, mainly in the financial field. The Shanghai Stock Exchange and the Industrial and Agricultural Construction Bank are all cooperating with us. Half of the 12 commercial banks and State Street Bank are all our customers. Cooperative systems involving bills, bonds, etc. are in operation. For example, the system we cooperate with Zheshang Bank has tens of billions of funds running.
There is technology, and there are practical cases at the same time. I believe we are creating value.
Odaily: Compared with mature public chain teams such as Ethereum, what is the technical strength of QuChain?
Li Wei: QuChain and Ethereum are two technical routes. QuChain does not involve public chain business at all, but only does alliance chain business. We are the BFT series, and we have two technical directions with Ethereum. It is actually unfair to compare the performance of the alliance chain with the public chain. This is a different scope of use and two markets.
Odaily: How does it compare with big companies such as IBM? Will it have an advantage in terms of policy?
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2. The essence of decentralization is the division of labor, which is originally a social development trend
Odaily: You just compared blockchain to mobile internet. It is true that the mobile Internet is less technologically breakthrough than the Internet, but it can make the C-side feel the change. For example, Ele.me, even if it is a business that focuses on operations and promotion, consumers can clearly feel the convenience of ordering food on mobile phones. The application of the blockchain seems to be concentrated on the B side; apart from the changes in life, consumers seem to feel little about the changes in life now?
Li Wei: Now the application of blockchain is indeed mainly on the B side, but the industry is still in its early stages. In the future, it is possible to explore applications that can be perceived by the C-end. For example, how should the value of an article be evaluated? Now, I'll give you a like because we're friends. If so, your entire evaluation system is not objective enough.
If the incentive mechanism of the blockchain is introduced, maybe I need to invest in tokens to like, which greatly increases the evaluation cost, and then why should I evaluate you, because I can get benefits later. There is no communication method similar to WeChat, and it may be another organizational model. Under the new model, the profits of the platform will become thinner.
Odaily: In this example, social forwarding on WeChat actually consumes personal reputation or taste, which is also a cost. Would it be better if money was used purely as an incentive?
Li Wei: Yes, this is the goal of the blockchain in the future. How do you calculate the cost of each person. What I just said is just a very preliminary idea, and the specific mechanism needs to be well designed. Tokenize cannot solve all problems, but it can solve more refined incentive calculation problems. For example, a public account is doing an event, requiring users to post to Moments, and if they collect 100 likes, they can get prizes, etc. This kind of operation is very troublesome, and it is much more convenient to use the blockchain. Social marketing, recommendation and promotion, distribution system, etc., may be an application direction of blockchain.
Tokenize cannot solve all problems, and not everything can be tokenized. For example, water cannot be tokenized, so the more digital things are more suitable, such as content copyright.
Odaily: But the current problem is, once the content on the chain such as copyright leaves a certain blockchain network, it is impossible to track and prevent infringement?
Li Wei: So the blockchain still needs a consensus, and the consensus is that everyone should use it, otherwise it will be difficult to play a role.
Odaily: Yes, blockchain can solve trust, but it cannot solve the problem of interest. There is a view that blockchains are only used when people conceptually want to decentralize, rather than blockchains that make relationships decentralized.
Li Wei: I don't think so. First of all, the blockchain can indeed realize the decentralization of the technical framework, which is a characteristic of any distributed system, and the change in the social organization model is actually a multi-centralization process with increasingly finer division of labor. If you watch costume dramas, you will know that there was only one yamen in ancient times, and now there are more and more different departments. This is the process of social development-in fact, the division of labor in society is becoming more and more detailed. The whole society has been developing in this way, and the blockchain just appeared along with the trend, and it is also a part of history. This is a complicated society. It doesn't mean that blockchain is decentralized, or that blockchain is centralized.
3. The public chain and the alliance chain are just different styles of play, and there is little difference in the end
Odaily: Can you briefly sort out the business lines of QuChain?
Li Wei: Qulian mainly has two business lines, one is enterprise and market, which mainly cooperates with major banks, which is a bit like Oracle's enterprise-level market. After we complete the system, we deliver it to customers. At the same time, we are also operating a BaaS platform FILO, which is mainly for small and medium-sized enterprises. It is similar to an application platform that supports the operation of supply chain finance and small games. It is a bit like a traditional public chain, but we are based on the alliance chain, and there is no Issue coins.
Odaily: Who are the nodes in this consortium chain?
Li Wei: It is a business related party, deployed on their respective clouds. It is not necessary for nodes to store everything, and the nodes of a chain should be stakeholders. Therefore, in the future, the structure of this system may be multi-chain. Playing games is not necessarily related to doing finance, and there is no need to store the data of the other party.
Odaily: So what do you think of the public chain model? Some investors once believed that public chains can only build ecology, and alliance chains can only be system providers?
Li Wei: It’s not that you can do whatever you want. Our SaaS platform Feiluo also wants to build an ecology, but it won’t call it out from the beginning. In the future, we will establish a joint venture company to invest and incubate fields such as medical care, certificate storage, and games.
I think that from the perspective of application, there will not be much difference between the alliance and the public chain in the end. Therefore, I call Feiluo a consortium chain that can be operated publicly. At this stage, the two are mainly different in style of play. The style of play of the alliance chain is Top down, which cuts in from the B-side users; the public chain is bottom up. The latter style of play is very dangerous, and the moves are sold too much, which can easily end up as a scam. I am not opposed to the Token model, but I am very opposed to ICO and the use of tokens to collect money, including STO. The Token incentive mechanism is valuable, but how to use and balance it needs to be constantly discussed.
Blockchain does not matter whether it is positive or negative, it is just a technology, it depends on how you use it. If you do supply chain finance, the country will definitely allow it, but if you issue coins to collect money, it's another matter.
Odaily: Then what kind of data do you think should be available to everyone?
Li Wei: Maybe games and public governance are needed. The current mode of the game is to issue equipment in one direction to make money. After not considering the R&D cost, the profit is higher but the life cycle is short. Super-release makes the props in the hands of players worthless in an instant. Is it possible to make the game last longer, and players can also enjoy more profits, not just the game manufacturers. In the future, whether manufacturers can issue game rules and props on the chain, manufacturers cannot over-issue, props can be kept in value for a longer time, and players who hold props can make money through transactions. Game manufacturers become exchanges.
Blockchain can play a greater value in public governance. The Zhejiang provincial government is promoting a concept called "at most one visit". Now to buy a house, housing construction, civil affairs, land, and taxation have to be visited again, which is very troublesome. The government has launched an office hall, allowing these departments to set up windows in the office hall. Residents only need to go to one hall to get stamps and provide materials at different windows.
In this way, they are together in a physical sense, the same hall, many windows; but the system is still separated, but once the systems are together, who shall prevail? These departments are all parallel, so before we need to stamp each department. The future is to use my private key to authorize, and the materials will be run once to each department node, and if it fails, it will be called back. The government can see how many working days have been used and where the card is stuck. This kind of security is actually higher than before, after all, chapters can be faked.
Odaily: I used to stamp the materials with the materials, just like doing offline Byzantium.
Li Wei: Exactly. In addition, we have just established the first Zhejiang Blockchain Technology Research Institute in the country, mainly for content supervision and cooperation with the Cyberspace Administration of China.
Odaily: What do you think is the current bottleneck facing the blockchain industry?
I am Lu Xiaoming, editor of Odaily. I am exploring the real blockchain. Please add WeChat lohiuming for breaking news and communication. Please note your name, unit, position and reason.
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I am Lu Xiaoming, editor of Odaily. I am exploring the real blockchain. Please add WeChat lohiuming for breaking news and communication. Please note your name, unit, position and reason.
