The fourth of ＂Four Questions about Bitcoin＂： How does the blockchain develop healthily？
Editor’s note: In May, the "currency circle" attracted countless attention. On May 18th, China Internet Finance Association and other three major associations issued an announcement pointing out that carrying out the exchange business between legal tender and virtual currency and between virtual currencies violated relevant laws and regulations and was suspected of committing a crime. On May 21st, the the State Council Financial Committee made a heavy voice, and once again clarified the strict supervision attitude of the financial regulatory authorities on Bitcoin: "Cracking down on bitcoin mining and trading, and resolutely preventing individual risks from being transmitted to the social field".
Where does the "fever" of speculative money come from? What is the chaos of "currency circle"? How does "mining" consume energy? How does the blockchain develop healthily? With these questions, People’s Daily’s "Strong Observation" column specially launched a series of reports on "Four Questions about Bitcoin", so please pay attention.
Recently, bitcoin has attracted the attention of the general public because of its sharp rise and fall and the strong supervision of the government. How to understand the relationship between virtual currency such as Bitcoin and blockchain? What role does blockchain play in helping the development of the real economy? What will China do to promote the healthy and orderly development of blockchain? In this regard, People’s Daily’s "Strong Observation" column invited many experts to interpret it.
Is bitcoin equivalent to blockchain?
"Actually, Bitcoin is a virtual currency." Zhao Xijun, a professor at the School of Finance and Finance of Renmin University of China, said that virtual currency is just like the points launched by some platforms to encourage players to use their own systems more. These points are just numbers rather than real money, but they can be traded in kind or transferred. "This number generated by the platform according to the rules has no fixed face value, and it is not the currency issued by the platform in advance. It can be understood as virtual currency."
When it comes to bitcoin, many people will mention blockchain, and some even think that bitcoin is a blockchain. Is bitcoin equivalent to blockchain?
"Bitcoin is by no means the same as a blockchain. The essence of blockchain is a decentralized distributed database. It is an innovative application mode of Internet with distributed data storage, multi-center point-to-point transmission and encryption algorithms, not virtual currency. " Long Fan, dean of the Blockchain Research Institute in Shutu District, said, "In short, the blockchain is actually a decentralized distributed database or account book that is difficult to tamper with, including public chain, private chain and alliance chain."
Regarding the relationship between Bitcoin and blockchain, Zhao Xijun believes that blockchain is the underlying technology of Bitcoin, and Bitcoin can exist and operate only by relying on the technical support provided by blockchain. The relationship between the two is more like attachment and being attached. However, the application of blockchain is not limited to the financial field, and its application is very extensive.
How does the blockchain help the real economy?
On October 24, 2019, during the 18th collective study in the Political Bureau of the Communist Party of China (CPC) Central Committee, General Secretary of the Supreme Leader stressed that it is necessary to promote the deep integration of blockchain and real economy, and solve the problems of financing loans for small and medium-sized enterprises, bank risk control and departmental supervision.
"Blockchain technology is related to value circulation, trust construction, contract observance and execution. It can play a key role in technical support for the construction of China’s real economy ecological environment, such as reducing transaction costs, improving product quality and credit, eliminating capital friction, building a benign supply chain relationship, and creating an innovative and ecological environment." Taking the manufacturing industry as an example, Zhu Wei, a member of the expert database of Beijing Science and Technology Commission, explained that both the market and policies and regulations are regulating the development environment of the manufacturing industry, but there is still room for the construction of industry order between them. "Blockchain plays a supporting role in building the industrial order of the manufacturing industry from a technical point of view, and can help the manufacturing industry to build a benign order of the industry quickly, spontaneously and purposefully."
Based on the technical characteristics of anti-counterfeiting, anti-tampering and traceability, Zhu Wei believes that this is conducive to solving the problems of equipment management, data sharing, multi-party trust and cooperation, and security in manufacturing, and plays an important role in improving industrial production efficiency, reducing costs, and improving the level and efficiency of supply chain coordination.
In addition, blockchain technology can promote the integration of industry and finance, so that finance can better promote the development of the real economy. Zhao Xijun said that the combination of blockchain technology and supply chain can greatly alleviate the problem of financing difficulties for SMEs in the supply chain; The tamper-proof blockchain and the security mechanism of private keys make identity management easier, and it is no longer necessary to rely on the supervision and credit of third parties, which greatly enhances the credibility of data networks; Distributed ledger technology makes non-commercial confidential data stored and backed up at all participating nodes, which solves the problem of information island in supply chain financial business.
In order to promote the deep integration of blockchain and real economy, Tian Shengdi, an associate professor at the School of Finance of Southwestern University of Finance and Economics, suggested: First, establish a provincial or even national supply chain tracking system, and establish a traceability and data integrity for the material flow related to national security, national economy and people’s livelihood. Reliable logistics system; Secondly, relevant departments should encourage industry cooperation, develop collaborative procurement and share supply chain management platforms, and create a highly visible upstream and downstream supply relationship through blockchain technology; Thirdly, enterprises should explore the application scenarios of blockchain and improve the application efficiency of technology, such as integrating information flow, replacing paper contracts and bills with blockchain, and integrating capital flow and using blockchain for account management.
How does the blockchain develop healthily and orderly?
In the chapter of "Accelerating Digital Development and Building Digital China" in the Outline of the Tenth Five-Year Plan, blockchain is listed as one of the seven key industries of digital economy in the Tenth Five-Year Plan.
Blockchain has been included in the five-year national development plan for the first time, and has become an important carrier for developing digital economy and building digital China, which indicates that the integrated application of blockchain technology will play an increasingly key role in the process of digital industrialization and industrial digitalization.
In this regard, Pan Helin, Executive Dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, said that although virtual currency has ushered in strong supervision in China, with the support of a series of policies, blockchain is likely to become an important new infrastructure in the digital economy era. It is of great significance to the development of the real economy, modern finance, and scientific and technological innovation. Nowadays, all countries are vigorously developing.
In addition to the benefits, the blockchain also poses new challenges in terms of supervision. A blockchain research expert from the central bank explained that financial behaviors such as virtual currency exchange, ICO (initial token issuance) fund-raising and pyramid selling in the form of tokens are frequent, and the current regulatory technology needs to monitor and analyze the public chain address and transaction data of the above behaviors to judge whether it is illegal or not. However, the public chain based on blockchain technology is anonymous, and the intelligent contract has the characteristics of unmanned automatic execution, which makes it impossible for the current regulatory technology to carry out detection and analysis, and naturally it is impossible to complete the judgment of illegal and criminal acts.
Some illegal blockchain applications use the names of points, stored value, equity, bills of lading, sales incentives, coupons, etc. to implement illegal financial behaviors such as fund-raising and pyramid schemes. "In addition to technical supervision, there should also be laws and regulations, but laws and regulations in this area are still missing." The expert added that it is not clear how to adapt and be compatible with the existing regulatory processes even for the legitimate blockchain applications such as supply chain finance, compliant asset registration and trading, and deposit certificates, and it is necessary for the regulatory authorities to formulate refined and operational standards and norms.
In order to solve the above problems, the expert suggested to build a unified data supervision and analysis platform for virtual currency finance based on blockchain technology, which can not only analyze, predict and judge financial risks by combining bank transaction data, but also improve the analysis ability by applying big data, joint risk control based on privacy computing, knowledge map, artificial intelligence and other technologies. At the same time, for violations in the name of blockchain instead of blockchain technology, supervision should be strengthened to increase illegal costs.
One of the "Four Questions about Bitcoin": Why does supervision follow one after another? How big is the risk of speculation?
The second question of "Four Questions about Bitcoin": "Mining", how much energy does it consume?
The third of "Four Questions about Bitcoin": How much do you know about the chaos of "currency circle"?
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