The blockchain is coming: the future is destined to subvert our lives, you deserve to look first

As of the beginning of 2016, a total of 42 financial institutions in R3 became founding partners. At present, the R3 Alliance has completed two rounds of testing of large-scale participation of financial institutions.

Five years after the birth of Bitcoin, its underlying blockchain technology began to become a new hot spot for investment in high-tech companies, multinational financial institutions and venture capital funds, from the experiments of niche liberal cryptographers and computer hackers.

The latest news is that Microsoft announced that it has teamed up with the R3 Blockchain Alliance to develop and test a new set of technologies for major banks and enterprises, replacing existing systems and improving the efficiency of their systems. It is reported that Microsoft hopes that its partners can expand the use of Blocakchain-as-a-Service and make this transition process faster through Azure Cloud Service.

In September 2015, R3 CEV was formally established. Its core function is to develop industry standards for the development of blockchain technology in the banking industry, as well as to explore practical use cases and establish a blockchain organization for the banking industry. Its CEO is David Rutter, who served as CEO of the electronic brokerage business at the famous electronic settlement giant ICAP, and is an expert in cross-border clearing and settlement.

Distributed ledger system testing provided by five blockchain vendors and three cloud computing providers. The five vendors that provide blockchain technology are Chain, Ethereum, Eris Industries, IBM and Intel. The cloud infrastructure is provided by Amazon, IBM, and Microsoft Corporation.

As of the beginning of 2016, R3 has a total of 42 financial institutions as founding partners, the specific list is as follows: Citibank, Credit Suisse, Danish Bank, Deutsche Bank, JP Morgan Chase, Goldman Sachs, HSBC, Dutch ING Bank, Santander Bank, Bank of America, Barclays Bank, Spain BBVA Bank, BMO Financial Group, BNP Paribas, Bank of New York Mellon, Canadian Imperial Bank of Commerce, Commonwealth Bank of Australia, Union Bank of São Paulo, Macquarie Bank, Mitsubishi UFJ Financial Group, Mizuho Financial Group, Morgan Stanley, National Australia Bank, Nomura Securities, North American Trust, Scotiabank, Sumitomo Mitsui Banking, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, SEB, Toronto Dominion Bank, UBS, UBS , United Bank of America, Wells Fargo and Westpac.

At present, the R3 Alliance has completed two rounds of large-scale participation in financial institutions. It is important to understand that these banks basically include the top 50 banks in the world (except China). According to analysts, the blockchain technology advocated by R3 may soon be used in the field of international financial payment and clearing, first subverting existing payment systems.

It is worth pointing out that the application to the financial sector is only blockchain 1.0.

According to Melanie Swan, founder of the Blockchain Science Institute, blockchain technology is developed in three phases or areas: blockchains 1.0, 2.0, and 3.0. The so-called blockchain 1.0 is an innovation in the field of digital currency, such as currency transfer, redemption and payment systems. 2.0 is more about contract innovation, that is, commercial contracts involve transactions, such as stocks, securities registration, futures, loans, clearing and settlement, so-called smart contracts. 3.0 is more in response to changes in human organizational form, including health, science, culture, and blockchain-based justice, voting.

Let's take a look at science:

1. What is blockchain technology?

On October 31, 2008, a cryptographic enthusiast (or team) who claimed to be Satoshi Nakamoto created a project he called Bitcoin - "a new electronic cash system that is completely P2P, not involving Trusted third parties". Since the bank exists as a trusted third party for a long time, the bitcoin currency framework proposed by Nakamoto is a mechanism that does not require any government support and banking operations.

A blockchain is essentially a distributed network of computers (nodes) for maintaining the source of information sharing. Each node participates in maintaining the security and accuracy of the information by maintaining a copy of a complete historical database.

At present, most systems have a place for storing electronic files - Database, which allows users to add, intercept, update, and delete data in the file. The current common mode is who is responsible for this system, who will manage this database, such as Taobao's database is maintained by the Alibaba team, WeChat database is maintained by Tencent, people outside these teams have no chance to maintain them The database. But blockchain technology gives every node in the entire system a chance to read and write to this database.

According to Gong Ming, founder of blockchain pencil and consultant of Wanxiang Blockchain Lab, if we assume the database as a book, reading and writing the database can be regarded as a kind of bookkeeping behavior. The principle of blockchain technology is Find the fastest and best person in the book for a period of time. This person will book the account and send the page information of the book to everyone else in the system. This is equivalent to changing all the records of the database and sending them to every other node in the whole network, so the blockchain technology is also called distributed ledger.

Taking the application scenario of blockchain technology in Bitcoin as an example, this book keeps track of who owns how many bitcoins. The coins themselves are not real objects, nor digital documents, but entries on the blockchain ledger, so having Bitcoin actually has a piece of information on the blockchain.

The blockchain is different from the centralized and private ledger of the bank, and its "book" is public and widely distributed, that is, anyone can download a copy. This system is completely transparent except that the user identity is encrypted.

The blockchain is used as a string of data blocks generated by cryptographic methods. Each block contains information about a bitcoin network transaction for verifying the validity of its information and generating the next block.

Forming a blockchain into a chain in order prevents anyone from using the same bitcoin twice. Since the blockchain is a shareable public account that everyone can examine, it is not subject to any single user control and the system will not be tampered with by either party. Unlike bank ledgers, which can be changed by owners or governments, blockchain changes must change all the thousands of copies used by miners at that time. Since Bitcoin does not have a central bank to control, controlling the entire system will require someone to control 51% of the total computing power of about 10,000 “miners”. This is extremely unlikely, making the entire system more secure. Guaranteed.

Second, why is the blockchain taking the lead in the financial sector?

Since the blockchain technology was originally from Bitcoin, the earliest contacts and applications were financial institutions. Nowadays, the most involved in the traditional financial industry is the banking, securities trading and registration. At present, the applications in the fields of medical care, supply chain, Internet of Things, games, government affairs, justice, socialization, artificial intelligence, etc. are mostly in the stage of primary or concept establishment.

According to Magister Advisors, a technology industry mergers and acquisitions consulting firm, the bank's development in blockchain will exceed $1 billion by 2017, making it the fastest growing software sector for all companies.

R3 CEV, a startup founded in September 2015, launched the R3 Blockchain Alliance, which has so far attracted to include Wells Fargo, Citibank, Deutsche Bank, HSBC, Morgan Stanley, Royal Bank of Canada, National Australia Bank and Societe Generale After the participation of 43 giant banks, they set out to develop industry standards and agreements for the use of blockchain technology in the banking industry.

On December 30, 2015, NASDAQ also completed its first securities trading based on the blockchain platform, which is a milestone for the decentralization of global financial markets.

In addition to helping to bring high transparency, high security, and reduced fraud risks to financial transactions, blockchain technology advocates also suggest that blockchain technology can also help improve efficiency and reduce expenses. A research report released by Santander in Spain last June suggested that by 2022, blockchain technology could save the banking industry $15 billion to $20 billion annually by reducing costs in cross-border payments, securities trading and compliance. .

Da Hongfei, founder of the first blockchain project in China, said: "The impact of the blockchain technology on the banking industry is transformative, and the underlying infrastructure of finance will change. Some of the original roles. It may not be needed in the future, and there may be some new roles, so it will make a big difference to the bottom layer." For example, there are some registration and settlement institutions in the financial sector, such as China Securities Depository and Clearing Co., Ltd. in the A-share market, and China Bonds in the bond market. Such institutions can be completely replaced by blockchain technology. The Australian Stock Exchange is working with a blockchain startup called Digital Asset Holdings (DAH) to provide a clearing and settlement system based on blockchain technology.

Third, many governments and central banks are increasing their research efforts but have not landed. The Chinese central bank also proposed a digital currency

When the blockchain began to attract high-tech companies, multinational financial institutions and well-known venture capital funds, the central banks of various countries and regions also studied the potential impact of virtual currency and blockchain technology on financial systems and regulatory thinking. And express his views.

In recent months, more and more central bankers around the world have begun to suggest that blockchain technology can be used to create more centralized digital currencies.

Zhou Xiaochuan, governor of the People's Bank of China, said in an exclusive interview with Caixin Weekly in February this year that "blockchain technology is an optional technology" and the People's Bank of China has deployed important forces to study and apply blockchain application technology, but " So far, the blockchain still occupies too much resources. Whether it is computing resources or storage resources, it can't cope with the current transaction scale. If it can be solved in the future, it depends on it."

Ben Broadbent, vice president of monetary policy at the Bank of England, said in a speech at the London School of Economics and Political Science in March that if blockchain technology continues to evolve, it is indeed possible to achieve value transfer and registration without going through a certain A third party with a credible authority (such as a central bank) handles it. Strictly speaking, the central bank is a very simple bank. Its main function is to manage the central bank’s reserve assets, namely “Central Bank Money”, which is the central bank’s bond or central bank bill. . The most common form of currency for the central bank is the cash flow in the market. If the private operators use the blockchain technology platform to promote digital currency on a large scale, then the most effective counter-measure of the central bank is to increase the circulation of central bank currency as much as possible, expand the scope of financial and non-financial institutions directly borrowed from the central bank, and even let all Individuals open accounts directly at the central bank and legislate to ban the use of cash and coins. Such extreme situations can theoretically be achieved without blockchain technology, but blockchain technology may make things simpler.

That is to say, the public central bank digital currency and the private bank digital currency may all be based on the same technology, but the purpose and use situation may be very different. The closer a central bank account is to a general commercial bank account, the more the central bank's digital currency can serve the people, the more competitive it will be in the market, and even the reverse cyclical characteristics: when a financial crisis occurs, deposits may come from commercial bank accounts. Flow to the central bank account. This phenomenon, Broadbent believes, may make the financial system safer.

According to Gong Ming, at present, governments and central banks have not said that they have officially started using this technology, but they are all examining its feasibility plan, including the British government’s report of more than 80 pages, which is devoted to various fields. Feasibility.

The UK's current Real-Time Full Settlement System (RTGS) is unstable and collapsed for nine hours on October 12, 2014, so the UK government has been hoping to find a stable solution, so the blockchain system is currently being investigated. . The current state is that it has not yet been put into practical use, but is studying the release of the digital currency RSCoin, but it is still under investigation and testing.

According to a report from the latest annual report issued by ABN Amro on March 16, the Dutch central bank is working on the development of an internal blockchain prototype called "DNBCoin". The Dutch central bank said blockchain technology could have an impact on the bank's existing revenue model and bank monitoring system. Through the new digital currency exchange method, it will be possible to create new revenues for banks, and also reduce costs, and have an impact on the financial supervision ability of the Dutch central bank. But this is still in the research and development stage.

Fourth, commercial operation is in its infancy, and major global consortia are already in action.

The blockchain, which collectively maintains a growing database through decentralization, provides an alternative direction for the future of the financial industry and is therefore attracting the attention of global financial giants and investors.

According to Melanie Swan, founder of the Blockchain Science Institute, blockchain technology is developed in three phases or areas: blockchains 1.0, 2.0, and 3.0. The so-called blockchain 1.0 is an innovation in the field of digital currency, such as currency transfer, redemption and payment systems. 2.0 is more about contract innovation, that is, commercial contracts involve transactions, such as stocks, securities registration, futures, loans, clearing and settlement, so-called smart contracts. 3.0 is more relevant to the transformation of human organizational form, including health, science, culture and blockchain-based justice, voting.

At present, the development and application of blockchain technology is mainly in the exploration stage of 1.0 and 2.0. At the same time, the world's major financial institutions are investing heavily in blockchain technology research and blockchain projects, including NASDAQ, Goldman Sachs, Citibank, JPMorgan Chase, UBS, and State Street Bank. , Santander, Barclays, etc.

Of course, the most important one is the R3 blockchain alliance mentioned above.

In the first half of 2015, in the first half of 2015, bitcoin companies coinbase, 21 Inc and Circle successively obtained US venture capital firm Andreessen Horowitz, chip maker Qualcomm, NYSE, and financial behemoth Goldman Sachs ( Goldman Sachs) and other giant companies' capital injections, the three startups received a total of 241 million US dollars in huge financing.

After entering the second half of 2015, the concept of blockchain began to emerge, and traditional financial giants also began to try to lay out blockchain or distributed ledger projects. According to statistics, in 2015, there were 13 investment events in the non-bitcoin blockchain sector, accounting for 19%; the investment amount was 129.3 million US dollars, accounting for 23% of the total investment.