The Importance Of Blockchain And How To Grasp The Trend And Opportunities

moac.io
moac.io
Nov 8 · 10 min read
Jingdiwangtian, Founder of Jingtum Technology and MOAC

Recently, the Political Bureau of the CPC Central Committee explicitly stated that blockchain technology should be considered as one of the core technologies for independent innovation and development, and that breakthroughs should be made. And in terms of application, it is necessary to promote the integration and development of blockchain technology with relation to governmental, economic and social scenarios. China’s recognition of the blockchain and its positioning and development has led to the rise of blockchain concept stocks and extensive discussions among industry insiders. Guo Xinghua, an analyst of Xinhua Finance in Beijing, interviewed Jingdiwangtian, founder of Jingtum Technology and MOAC, who analyzed in depth the background of China’s high level attention to and the future market opportunities of the blockchain industry on Oct 31 in San Francisco.

Analyst: The government’s statement this time is in stark contrast to the previous cautious and strict supervision approach. Why did the policy adjustment happen now? Why is blockchain technology?

Jingdiwangtian: First of all, the connotation of the Internet is evolving, and the connection mode, connection subject, and behavior of subject in the Internet concept have also changed. The Information Internet is gradually evolving to the Value Internet, and in the Value Internet, blockchain will become the underlying core technology. We have entered a new era of digital information, which can encrypt and authenticate information on the Internet, making data easy to trade.

Second, user data will become an important strategic resource. China has a large, well-educated and thoughtful mass of people. If wealth is mainly represented by information rather than oil in the future digital economy era, China will be equivalent to Saudi Arabia in the Middle East. Creativity with regard to information and data may be China’s biggest advantage.

Third, the world economy has moved from an industrial capital stage to a financial capital stage, and there has gradually been a situation in which capital controls everything. From the comparison of the profit level of various industries in China in 2017 and 2018, it can be found that the banks have the highest profit level. In the era of industrial capital, capital investment can translate into expansion of the real economy, and the marginal utility of the real economy is diminishing, especially in the United States where large amounts of capital are idle as financial derivatives. If the industry token model is used to promote the economic and industrial restructuring, the leverage of the required funds is actually very low, and the delivery is more precise. For example, tokens designated for the agriculture sector will be unable to be used in the real estate sector.

Analyst: From an international point of view, is the competition in the blockchain technology intensifying, and if so, has it reached the stage of final sprinting? Is it true that the intention of People’s Bank of China was frequently cited for support at Libra hearings?

Jingdiwangtian: From the perspective of international competition, globalization will fade and regionalization will emerge. In the future, there will be three regions that include East Asia, Northeast Asia, Southeast Asia and parts of South Asia, North America and the European Union. The three regions will have a relatively complete trading system within themselves, but the links and trade between the three regions are much less than the links under the current globalization. The emergence of this pattern of regionalization will set new requirements for the internationalization of the Renminbi. Whether to adopt a new dimension to meet the needs of such internationalization requires China to have a new emphasis on the blockchain industry.

This sense of urgency for the emphasis on and development of the core and underlying technology is not to say that China’s technology is to lead the world, but rather to instill a high-level awareness of hidden danger in times of peace, and to make up for its own shortcomings. China’s strength lies in the strong innovation of its business model, from Alipay to Tencent to Pinduoduo. The R&D and innovation of basic sciences in the United States is particularly strong. This US comparative advantage has led China’s good products and applications to rely entirely on core technologies from the US. In particular, for the blockchain industry, China’s penchant for applications and the heavy reliance on US core technology would be unacceptable for China. At present, many industries and large enterprises in China are willing to try and use blockchain. China’s enthusiasm for blockchain is actually higher than other countries, but China’s technological infrastructure is actually falling behind.

Libra and the People’s Bank of China’s digital currency program do exhibit a certain degree of competition, but the current analysis is actually a little overstated. Libra states that if regulation continues to drag their feet, China’s red flags are to fill the world. On the other hand, China alarms that Libra is coming and if no action is taken soon, China will be curtailed. As a matter of fact, Libra faces many organizational, legal and technical problems and it is not as powerful as it was alluded to in China. Likewise, China faces the problem of how to implement the technical details of the central bank’s digital currency program, and there are also many other headaches that need to be resolved. Both sides have tended to overstate the threat from the other side to justify its own response which is normal.

Analyst: The Chinese government’s policy and regulatory attitude toward the blockchain industry has undergone some big adjustments. What changes can be expected in the future development trend of the industry? And will the growth of the government application market support the investment in research and development of the underlying technology?

Jingdiwangtian: At the beginning, many businesses and projects will be rubbing hot spots. The next step could be for the state to send a clearer message to the entire market such as issuing a list of key enterprises that will enable more resources to be concentrated on these regular forces which are expected to be able to harness some of the core technologies. It is now likely to follow this development path over the next three to five years, with state policy funding that supports compliant projects, followed by various industrial and venture capital funds invested in implementation of the infrastructure.

We can imagine a growing number of blockchain projects across industries. If these projects are up and running and become profitable in their own right, the state finances will not need to invest a large amount of money to promote them when the market becomes active. The government will be more inclined to let the market evolve into a better state. The Politburo meeting is a clarion call for a charge that could be tested after a period of time, and some policy adjustments could be made as well.

Analyst: Let’s talk about the future. The Politburo meeting referred to the integration of blockchain and other information technologies. Jingtum Technology has a wealth of experience in the integration of technologies such as the Internet of Things. What will information technology integration look like in the future?

Jingdiwangtian, Co-writer of the book “Blockchain and Industrial Innovation”

Jingdiwangtian: Digital assets like Bitcoins that are divorced from any real entity may be larger in scale than real assets. These digital assets do not need to relate to the physical world. In the future, AI will replace a lot of white-collar jobs and robots will take over a lot of blue-collar jobs. What then do most people rely on to survive? Personal data that is now taken away for free by internet giants such as Ali, Tencent, Google and Facebook will be returned to private hands. The value generated by the innate data and information assets after a person’s birth could provide the income that sustains the individual’s basic livelihood. Human beings will be liberated from working for living to working for your hobbies, interests and ideals, enhancing the value of your personal data. The future social form will be improved and the fundamental operation of a society will depend on AI. Social development will not depend on capital, but rather is driven by contribution, information and creativity. Different countries will have different social forms and economic models and today’s economic theories will not be applicable.

Big data will be replaced by micro data, and cloud computing will be replaced by edge computing, rain computing, and fog computing. Big Data is still an industrial way of thinking, aimed to extract gold from the chaotic data. In the age of blockchain, it is possible that any information is already encrypted when it is generated. The current chaotic data mines will become neat and orderly data warehouses. The data are processed high quality data and the price would have been marked.

Analyst: There are many inconveniences in grafting the blockchain on the current Internet. Will there be a network structure specially created for the blockchain in the future? Could it be that digital assets, core data and proprietary data are all on the chain such that the blockchain Value Internet will become the core and the Information Internet will become the peripheral network structure?

Jingdiwangtian: This situation has actually been realized as many network connections are using TOR and point-to-point transmission. It is possible that blockchain will not need the TCP/IP layer in the future, although this may be a gradual process. The Value Internet will definitely come to pass in the future. It may be too early to see it yet as there are still many technological breakthroughs that need to emerge.

The current network structure is complex, and user habits have already been formed. When the Internet of Things is connected, it is necessary to consider whether or not to adopt the TCP/IP protocol. If it is not adopted and a new standard is used instead, then the value network of the Internet of Things will develop first. Whether or not the Internet of Things will transition to the Value Internet will depend on user experience. At the very least, there should be no negative user experience or the experience is to be more optimized.

Analyst: Now let’s talk about the current opportunities for industrial positioning. At present, there are more applications of the alliance chain in China, and its development is relatively fast. Will the alliance chain and the public chain technology systems develop independently of each other?

Jingdiwangtian: The alliance chain and the public chain are analogous to the difference between the Internet and Local Area Network (LAN). The biggest advantage of blockchain is multi-party collaboration. There are many sub-branches and sub-systems within an enterprise. Through the blockchain technology, the collaborative division of labor within the enterprise can be realized. This kind of demand will definitely exist. As with the development of the Internet at its beginning, many applications were set up on the LANs. After the emergence of cloud computing, the LANs basically disappeared. Users can use the VPN method on the Internet to implement functions at a lower cost.

At present, the Jingtum public chain uses sharding technology to split the data into smaller pieces which the users can then use as their own alliance chains. The costs of security management and defense against attacks are relatively small compared to their own operations and maintenance. From this perspective, I don’t think there is any significant conflict between the two technologies.

Analyst: Can the currently very popular BaaS platform become a public chain, and what are the advantages and disadvantages compared with a public chain?

Jingdiwangtian: BaaS service is mainly developed from the transition of the Fabric system, and is more akin to the Cloud platform. Its service is more suitable for extension from the existing Cloud platform and its degree of centralization is more than the public chain decentralized system. Many Cloud platforms operate in a cloud. The Cloud platform blockchain service resembles a kind of customer service provided by the Cloud platform. It is limited to satisfying the internal needs of the enterprise and lacks the interconnection between different enterprises. However, the public chain system is similar to the Internet, and access to the public chain will be easier and cheaper for future applications.

Analyst: For those who focus on the development of blockchain technology such as investors and entrepreneurs, what other opportunities and innovations are worth investing in?

Jingdiwangtian: I don’t think there is much chance for a new entrance to compete on the underlying blockchain technology. Jingtum MOAC has operated from 2014 to the present with 1.6 million users. There were many problems that we had to resolve over the last four years. The experience that we have accumulated over the period will be impossible for a new team to assimilate right away. Currently there are no more than three teams in the world that can develop and run the underlying blockchain technology. The entrance to the race track of the underlying public chain technology is basically closed. For investors, after the national policy was announced, investing in some of the underlying blockchain technology companies that are favored by the national government would likely be a successful option.

For entrepreneurs, the focus can be on the commercial applications of the technology, combined with their own advantages and in-depth understanding of the pain points of an industry, and choose a niche that can use the blockchain to empower the existing business.

Analyst: At present, enterprises have their own strengths such as high performance, password security, scalability, and high stability. Will these capabilities be integrated under one framework? Which technology is the Key to the keys?

Jingdiwangtian: Yes, these technologies can be integrated. When designing the underlying layer, we have considered that this bottom layer should be like a highway where the functions provided for everyone should be very succinct, the capacity is relatively large and the stability is good. After that we continue to increase the features of the top application layer such that, for a certain fee, the unique featured services can be integrated. For example, secure password technology and high-performance services can actually be deployed as a plug-in to the entire system.

I think all of the capabilities you just mentioned should be made available to the users, such as the computation of private data, powerful random number generation that is attack resistant, and cross-chain technology. I believe that all these module technologies need to be considered. We may be able to see this kind of framework design in a year or two if people are to share their good modules that can be used to construct a stronger system.

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