Editor's Note: This article comes fromWanxiang Blockchain (ID: gh_1b8639a25429), published with permission.
Editor's Note: This article comes from
Wanxiang Blockchain (ID: gh_1b8639a25429)
, published with permission.
Wanxiang Blockchain announced at the summit that it has reached a strategic cooperation with Karma Auto to jointly promote the exploration, innovation and implementation of the combination of emerging technologies and physical industries. Dr. Zou Chuanwei, Chief Economist of Wanxiang Blockchain & PlatON, also presented the "White Paper on Distributed Economy" at the meeting, and published suggestions on the design of blockchain economic mechanisms.
At the meeting, Dr. Xiao Feng, Vice Chairman and Executive Director of China Wanxiang Holdings, Chairman and General Manager of Wanxiang Blockchain, delivered a closing speech "Thinking Caused by Libra".
The following is the full text of the speech, compiled from the shorthand on the spot, with some deletions that do not affect the original intention.
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Dr. Xiao Feng at the 5th Blockchain Global Summit
Taking advantage of the privilege of the organizer, I want to say thank you to all the guests who have persisted until now in my last speech. Thank you everyone, you have worked hard these two days!
There are more guests staying this year than last year, and I know it's not because of me. Because last year I was also the last one, mainly because of Vitalik (laughs).
This year, I want to share with you some of my personal thoughts caused by Libra, not to comment on Libra.
(1) Currency perspective
First, the way of credit endorsement.
Most people evaluate Libra from the perspective of currency. Some people say it is currency, and some people say it is not. Is it right?
In my opinion, it is not only the sovereign government that can issue currency. From the perspective of credit endorsement, in the past thousands of years, there have been three types of issuers who have endorsed currency credit, or issued currency in the form of credit endorsement.
(1) Sovereign currency. The sovereign government endorses with its own sovereign credit. The U.S. dollar, the renminbi, and the digital currency of the central bank in the future are all endorsements of sovereign credit.
(2) Cross-sovereign currency. This is a currency issued under the endorsement of multiple sovereign credits, such as Libra, which may be issued next year. Libra has stated that it will be issued as a reserve currency with the national currencies of four sovereign countries (organizations) or short-term investment tools of sovereign governments (organizations).
(3) Non-sovereign credit-endorsed currency, which is also the oldest. Such as gold, Bitcoin, etc., as well as the stablecoin DAI (editor's note: Maker DAO's stablecoin) that Vitalik mentioned is issued with digital assets as collateral.
Whether it is Libra, Bitcoin or DAI, from the perspective of credit endorsement, there is actually no innovation. This is of course not to belittle Libra or Bitcoin, but there is nothing new under the sun. Don't worry, the shape and function of money is changing all the time.
Second, the issuance of digital currency.
In fact, there are usually three types of entities that issue digital currencies:
(1) TECHNOLOGY GEEK. Bitcoin was created by tech geeks, Vitalik also created ETH. Any innovation, especially disruptive innovation, is mostly created from scratch by technical geeks. It may then continue to be optimized and improved by other agencies to make it more suitable for real-world and regulatory requirements, so as to be gradually promoted.
(2) Commercial organizations, private organizations. Libra, as well as JP Morgan, which announced earlier that it will issue B-side settlement coins, are all private institutions.
(3) Central Bank. The People's Bank of China already has a clear roadmap, and the European government has also stated that it will reject Libra and issue a digital currency based on the EU.
To sum up, perhaps the most appropriate way to issue digital currency is to be created by technical geeks, explored by private institutions, and finally issued by the central bank.
Third, the use of digital currency.
Dr. Zou Chuanwei also mentioned earlier that digital currency is a very special currency, not a universal currency, and cannot be used to solve all the general functions of currency. Rather, it must be a currency combined with scenarios, specific needs, and specific uses.
Why is there Internet payment instead of banks providing services? It's very simple. If two people buy or sell on the Internet, if they use bank transactions, it may take 3 to 4 steps to complete the payment. However, the customer conversion rate on the Internet will drop from 80% to 2% if it exceeds three steps. If there are really so many purchases that cannot be achieved due to cumbersome payment, transaction, and payment processes, then the commercial feasibility of e-commerce will be gone. Payment must be combined with the scene, and it must be completed anytime, anywhere and on demand, so that Internet e-commerce can be made.
Similarly, if you do not work with commercial organizations that can combine scenarios, traffic, and customer needs, the promotion of the central bank's digital currency may also encounter trouble.
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The Fifth Blockchain Global Summit Site
(2) Financial perspective.
Libra claims to build a new generation of financial infrastructure. Why can you say that? Because it is based on blockchain. The three things at the bottom of the blockchain are used to build a new generation of financial infrastructure: a new accounting method, a new account system based on encrypted digital wallets, and a new accounting unit based on encrypted digital currency.
Libra is To C, claiming to establish a personal payment system for 2.7 billion people. JPM is To B, and it is necessary to build an inter-bank clearing system. They are all based on new accounting methods, new accounts, and new accounting units. In order to facilitate understanding that Libra is a new generation of personal payment system, I divided the evolution of the personal payment system.
Paper money was the first great overhaul and innovation in the personal payment system. Before paper currency appeared, personal payment was very inconvenient, especially cross-regional payment. If you want to transport silver dollars from Shanghai to Beijing, you need to go through an escort agency, push a cart and lead a horse. It will be much more convenient after you have banknotes.
The emergence of paper currency as a more convenient form of currency is actually related to the development of science and technology: the papermaking and printing techniques of the Song Dynasty were mature enough. It is the continuous development of technology that meets the payment needs of lower cost and higher efficiency.
The second-generation personal payment system is an electronic payment system based on bank cards. Paper currency is difficult to cross borders, but bank cards are more convenient to pay all over the world. Similarly, the bank card electronic payment system first benefited from the development of communication networks.
The third-generation personal payment system is Alipay and WeChat Pay. This is a mobile payment system based on an internet wallet. In the Internet scenario, the payment service of bank accounts can no longer meet and solve the real-time point-to-point payment needs, so Internet payment was born. Bank cards do not complete transactions directly with customers, but through Internet wallets.
The fourth-generation personal payment system is a digital currency payment system based on blockchain and cryptographic addresses created by Libra.
It can be seen that in these four generations of payment systems, except for the second generation that directly uses bank accounts and payment networks, banks are hidden at the back end. The concept of open banking has been around for a long time.
Driven by new technologies, banks are not without a role, but will hide behind them, output account capabilities, payment capabilities, etc. through APIs, or use a complete set of banking systems to support other customers.
From a financial perspective, Mr. Yao already talked about the relationship between digital finance and digital assets yesterday, so I won’t go into details. The new generation of digital financial system needs blockchain and digital currency, or the digital financial system is built on the financial infrastructure of blockchain digital currency.
How to understand the digital economy from the perspective of enterprises? The driving factor of the industrial economy is fuel, and the driving factor of the digital economy is data. How does data drive a business? My conclusion is to computerize the data, use algorithms to organize the data, and at the same time computerize the business process of the enterprise, or turn it into a smart contract. This digital economy is not the digital economy from the perspective of economists. A series of digital technologies such as the Internet, the Internet of Things, cloud computing, artificial intelligence, and blockchain help companies complete the organization of digital economy and digital business.
These digital technologies have three characteristics:
across time and space. Data naturally has a penetrating instinct. Data flow has no borders, across time and space, and across organizations. At the same time, the data is penetrating, and can penetrate the market level vertically, turning transactions into point-to-point, no intermediary between buyers and sellers, and shortening the industrial chain horizontally.
Because of peer-to-peer, transaction settlement must be real-time. Using a bank card to buy things in a mall is not a peer-to-peer transaction, because it takes time for the merchant to receive the money. But no problem, because the bank made a credit guarantee. But what if there is no intermediary guarantee like a bank? Then clearing and settlement must be carried out. The blockchain is a network that completes transactions, clearing, and settlements simultaneously.
The characteristics of digital technology enable digital finance to remove intermediate links, with point-to-point payment settlement and non-guaranteed transaction settlement as its core features. Blockchain and digital currency are the best technical solutions to meet these needs.
(3) Business perspective.
The feature of blockchain technology is that it is sufficiently digital, cross-border, cross-time and space, and cross-organizational, and it is also distributed, self-organizing, and decentralized. Decentralization does not refer to the decentralization of social governance, but the decentralization of commercial activities. To a certain extent, real blockchain-based applications must reflect the above two characteristics.
There have historically been two routes for any new application based on a disruptive technology.
Route 1: Treat new technology as a tool to improve traditional business models and improve marginal benefits.
Route 2: Treat the new technology as a system to reconstruct the underlying logic of business.
There are many cases. For example, a few years ago, when Internet companies talked about "financial technology", many people in the traditional financial industry liked to talk about "financial technology". Technology is a tool to improve the existing business model. And "financial technology" is to use the Internet and digital technology to reconstruct the underlying logic of finance.
Why does Libra adopt the "association" structure? Why doesn't Facebook control it? It is also based on the technical characteristics of blockchain. If Facebook builds Libra around itself, chances are no one will use it because it's hard to fully trust.
What I talked about earlier was that the characteristics of digital technology make the decentralization of business activities an inevitable trend. Now let’s talk about the development of business. There are two points:
1. Economic globalization 2.0. Because of the Internet, it is no longer the era of globalization of companies. It is not a company that turns itself into a multinational company, but any individual can conduct peer-to-peer transactions. Economic globalization has developed into personal globalization, and solving point-to-point transactions and realizing point-to-point services have become prominent issues. The characteristics of real-time clearing and settlement and point-to-point transaction settlement of blockchain technology can be used to help the globalization of personal business activities.
2. Economic digitization. When the data is collected to a certain extent, the circulation is basically across time and space. This makes the financial payment needs of many commercial activities available anytime, anywhere. Those who cannot provide payment and settlement services that meet the needs in a scene-based and virtualized manner will be eliminated by the market. The best case is the comparison between NFC's near-field payment and the code-scanning payment supported by Internet companies.
Therefore, the new life needs, business needs, and financial needs brought about by new technologies must be met in a distributed and decentralized way.
Whether the block reward of the blockchain is rewarded once every 10 minutes or once every second, it is actually paying for those who have done work for the blockchain during these 10 minutes or 1 second.
I have read a document that about 34% of people in the United States do odd jobs. They are not affiliated with any company or employed by anyone, but provide services for everyone through the Internet. The best way to calculate compensation in the gig economy is to pay by the hour. If you can make good use of the blockchain labor compensation mechanism, then the gig economy can be realized globally. For example, hiring Brazilians to work for you in China does not require an intermediary and the friction coefficient is zero. What a great thing this is matter.
The sharing economy is the same. How do you get paid for renting something for others to use for 10 minutes? By bank transfer, or by smart contracts on the blockchain? Using smart contracts, you can get paid instantly. Obviously, the future sharing economy and gig economy are based on blockchain and digital currency. At present, there is no better solution than it, which is close to zero cost, and can efficiently complete the incentive problems of the gig economy and the sharing economy in real time, as well as the payment of remuneration.
This reminds me of Mr. Ma Yun, the founder of Alibaba, who said "customers first, employees second, and shareholders third". This is the concept of distributed economy in a simple sense. Not long ago, nearly 200 well-known American entrepreneurs of the American Business Roundtable released a new mission for corporate managers - "Companies cannot maximize the interests of shareholders." Instead, social welfare should be maximized, which means that the welfare of all parties involved in the enterprise should be incentivized and cared for, not just highlighting one of them, especially not highlighting the maximization of shareholders' interests. The blockchain is incentive-compatible for stakeholders, not just one of them. Both Bitcoin and Ethereum have no shareholders, and all parties can be incentivized.
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