3 Minutes to Understand “Blockchain”, From Concept to Application

DREP Foundation
Nov 8 · 10 min read

Abstract: President Xi states “We must take the blockchain as an important breakthrough for independent innovation of core technologies”, blockchain becomes a hot issue once again. What is the essence of blockchain? Does digital currency have original sin? What is the most suitable application for blockchain? After reading this article, you will find the answer.

On 24th, October, Political Bureau of the Central Committee of the Communist Party of China conducted the 18th collective study on the status quo and trends of blockchain technology development. President of the People’s Republic of China Jinping Xi emphasized that the integrated application of blockchain technology plays an important role in new technological innovations and industrial revolution. We must take blockchain as an important breakthrough for independent innovation of core technologies and accelerate the development of blockchain technology and industrial innovation.

Subsequently, in the Bund financial summit held on 27th, vice chairman of the China International Economic Exchange Center Qifan Huang indicates: People’s Bank of China is likely to be the first central bank to launch digital currency in the world.

Also, on 23rd, in the hearings before US congress, Libra said that if no innovation, it is necessary to take Chinese Central Bank’s digital currency into consideration. Obviously, blockchain technology has become a financial revolution tool and is highly likely to overturn the global financial ecosystem.

The launch of DCEP further confirms that our personal payment methods are already being changed. Therefore, understanding digital currency and the technology behind — blockchain is necessary and urgent.


1. What’s the Essence of Blockchain?

Bitcoin white paper was released in 2008 and then people know blockchain at the first time. People call this peer-to-peer transmission, multi-party consensus accounting, encryption algorithm, distributed storage data structure as blockchain.

The essence of blockchain is a distributed public ledger. Different from traditional distributed ledger’s dependence on central nodes to verity information, blockchain use algorithms and techniques to build trust and realize consensus accounting. Also, the consensus mechanism in blcokchain can ensure that the date in this ledger is not falsified. Therefore, relying on blockchain, people can establish a multi-party, no-intermediary asset transaction and value transmission network.

DREP believes that if the reason for the commercialization of Internet is to achieve “connection”; then the reason for blockchain to surpass Internet and IOT is to “connect everything”. Therefore, the vision of DREP is to build a blockchain “connector” and “toolkit”, connect data silos, and erase the using threshold.


2. Does Digital Asset, the Biggest Application of Blockchain, Have Original Sin?

As the underlying technology of bitcoin is the first application of blockchain, digital asset is still the largest application of blockchain so far. But for a long time, this application is as much censured as praised. On the one hand, bitcoin is regarded as new currency and digital gold, on the other hand, it is considered as a scam.

The release of Chinese Central Bank’s digital currency DCEP sets a path for the development of digital currency in China. It can’t be denied that digital asset does have innovation in technology. Whether in issuance method or payment, transaction, clearing and settlement process, it can be an efficient financial lubricants and curb monetary high effectively.

Whether it is the issuance method, payment, transaction, clearing and settlement, it can effectively play the role of financial lubricants, and can effectively curb currency overshoot.

However, the value of digital currency not only lies in technology, but also lies in the trust behind. The digital currency issued by individual or institutions doesn’t have the force of law. And its price fluctuates greatly, so it cannot be used to measure value like legal currency, therefore not be able to meet user’s payment demand.

Whereas, the sovereign currency issued by the country cannot be rejected by anyone like legal currency, also it has the advantage of digital currency like low cost, anonymity and so on.

To put it simple, the value of digital currency issued by institution and individual bases on the using value of this blockchain network. While the value of digital currency issued by country relies on the national credit related to national sovereignty, GDP, and fiscal revenue.


3. Blockchain+ Which Industry, Make the Application Practical and Useful?

To realize the application of blockchain technology, it is necessary to take full use of the blockchain advantages in data sharing, trust building, and business processes optimization, etc. You may have heard of many “blockchain+” scenarios, such as finance, energy, copyright, food safety, supply chain, Internet of Things, the Internet, online games, education, and government affairs, etc. It seems like blockchain is omnipotent. However, after communications and technology docking with nearly 100 domestic and overseas enterprises, DREP found that it requires a long time to realize “blockchain+” in many fields and needs the cooperation between government and enterprises, as well as upstream and downstream industries

There are some “blockchain+” tracks that more likely to succeed:

a. Application in DeFI (decentralized finance)

b. Application in supply chain

c. Internet platform related applications: account system / digital ID / data and privacy / points / game

d. Application in government affairs

e. Application in education and talent

DeFi (Decentralized Finance) is decentralized financial derivatives and related services, which is backed up by distributed ledger and blockchain technology. Now the common DeFI applications including DCEP (Chinese Central Bank’s digital currency), USDT (a stable coin based on legal currency), Bakkt (bitcoin contract trading platform), Maker DAO (allows people to issue stable coins by collateralizing their digital assets on smart contracts.

Compared with traditional financial service, DeFI software system is open source and transparent. It builds trust through codes so as to reduce financial expense. Users can get low-cost financial services without trust platform. Let’s take real estate finance as an example.

With the slowdown of economic growth, the real estate industry faces problems like incomplete information, opaque transactions, and difficult financing. Blockchain technology has great potential and can be applied to real estate credit big data, real estate precise marketing, property management, etc. It is able to improve the transparency and efficiency of commercial real estate, as well as save cost by eliminating many deficiencies in key processes.

As a leading blockchain technology solution provider,DREP carried out a model derivation and prepared technical solution for the pain points encountered by the real estate industry.

For example, DREP cooperated with an Australian leading real estate enterprise, whose partners including some well-known real estate enterprises like Macrolink Group. Based on its demand, DREP provides a complete blockchain solution.

Based on DREP, this real estate enterprise (will be disclosed by DREP official soon) achieved transparent and intelligent real estate transaction settlement data solutions:

a. Establish a real-time transaction settlement network in real estate industry based on algorithm trust;

b. A more flexible real estate investment and financing platform with lower threshold;

c. Privacy, reliable digital ID based on DREP DID

d. Create transparent on chain property management by embedding DREP reputation protocol

The above solution can help enterprise achieve a series of functions such as project financing, transaction settlement, discount, credit confirmation with low cost and high efficiency.

Blockchain has technical features including anti-counterfeiting, tamper-proof and traceability, it can be used to solve problems in manufacturing industry like equipment management, data sharing, multi-party trust cooperation and security protection. It plays an important role in improving industrial production efficiency, reducing costs, improving supply chain coordination efficiency, and promoting management and business innovation.

The significance of blockchain to supply chain:

a. The tamper-proof feature of blockchain information is beneficial for anti-counterfeiting traceability of the supply chain;

b. Completely consistent information in all nodes in blockchain, weaken the information error caused by excessive supply chain processes;

c. Automatically updated data in blockchain node is beneficial for information precision;

d. The operation in blockchain smart contract, reduce the related human resources investment;

e. No need of intermediary in blockchain operation, reduce trust expense.

The above characteristics can be applied to many scenarios such as supply chain tracing, supply chain finance and supply chain anti-counterfeiting. Take supply chain finance as an example.

Supply chain finance offers comprehensive financial products and services for upstream and downstream companies in supply chain industry. It is backed up by core enterprise, relies on real trade background, use self-compensated trade financing, close capital flow or control property rights by means of pledge of accounts receivable and goods.

As a distributed ledger, blockchain provides an equal platform to reduce credit collaboration risk and cost among institutions. The information on chain is traceable and not falsified, real-time synchronous data among multiple institutions, real-time reconciliation. Moreover, after breaking the isolation among different layers, some enterprises, which were exclude from service realm because of its lack of direct trading with core enterprises, can also obtain low-cost financial services by means of blockchain trust transmission function.

Meanwhile, in the process of supply chain circulation, blockchain enables the transparent sharing of logistics information and item data, which can increase the controllability of circulation process, improve the efficiency of the industry, and ensure the authenticity and uniqueness of the items. Take a food safety chain as an example. The traceability and confirmation process of supply chain data is as follows.

Traffic is the most important index in internet industry and all internet platform want to acquire more users. In this process, user’s account and data will be preserved in the platform. Thus, the security and privacy of user data becomes especially important. At the same time, with the increased cost of competition and customer acquirement in internet platforms, user growth and traffic monetization are becoming two issues need to be addressed.

The technology feature and incentive mechanism of blockchain can solve the above problems effectively. DREP believes that the combination of blockchain and Internet can be reflected in account system, digital ID, data and privacy, points, game applications and so on. Take DREP’s cooperative enterprise Harkhark as an example. Harkhark is Ant Financial’s official partner in Australia.

It is like Chinese Meituan and its main business covers O2O services throughout Australia.

Through the docking with DREP SDK (mainly point system and bidding system) which is especially designed for O2O industry, Harkhark can improve user conversion rate and payment rate. Based on DREP ID system, Harkhark optimizes the platform account system, fosters user rights and asset awareness, enhances loyalty and stickiness, and provides data privacy protection settings.

Moreover, two more DREP cooperative partners: Yeeyi, the largest integrated O2O platform in Australia, and Comebey, another Meituan in the Middle East, are based on the above DREP SDK. It provides more customer acquirement channels for Internet platform, meanwhile, it increases user stickiness by providing better customer service to achieve win-win results.

Blockchain data sharing mode can be well applied to the collaboration among government departments, which is promising in the mutual maintenance and utilization across departments and regions, as well as e-government and government information systems.

For example, in Georgia, US, it applies blockchain in property registration to secure land ownership transactions; Dubai is committed to transforming government transactions into a blockchain model to reduce paperwork and travel miles; The UK government believes that blockchain can improve the transparency of transactions between government and citizens and make the business execution more efficient; In Qingdao, China, an urban waste separation and recycling project based on the blockchain underlying algorithm and integrated automatic compounded networking system is launched; In social welfare, a Major disease relief system based on blockchain technology “public welfare treasure” has been put into trial.

This June, relies on Zhejiang Government Affairs Service Network, Zhejiang Province launched first blockchain electronic bill platform to improve the efficiency of Reimbursement for medical treatment. After seeing the doctor, people can directly view the medical bills in “Zhe Li Office” APP, and complete reimbursement online, realizing a totally online procedure.

Blockchain technology can solve problems like difficult storage of paper bills and inconvenient extraction of data, make sure the processes of generation, transmission, storage and use is recoded and cannot be falsified, ensuring the authenticity and uniqueness of bills.

The new credit method brought by blockchain technology helps to achieve a good cooperation order between citizens and the government, and it also plays the role of participation and supervision.

In education, personal privacy and data security are very important. Effective collection and record of students’ learning behaviors and various growth trajectory data to form a comprehensive evaluation of each student is also a reform direction of education and talent training mode. Through the decentralization and consensus mechanism of big data technology and blockchain technology, the Education Data Monitoring Platform of Langfang Education Bureau realizes the analysis and reuse of the value of educational data, meets the supervision, evaluation and decision support of education management departments, therefore enhancing public service capacity of education.

Meanwhile, blockchain technology needs the cooperation with schools and enterprises, provide talents for enterprises through education, provide academic support through practical cases of enterprises. For now, DREP has cooperated with Nanyang Technology University, University of Sydney, SungKyunnkwan University and KYunghee University to improve the awareness of universities and build a DREP blockchain test and promotion base integrating production, learning and research.


DREP is committed to building “connectors” and “toolkits” based on blockchain technology, providing solutions that combine ease of use, flexibility and frictionless integration. Based on DREP Chain, DREP ID and DREP SDK, DApp R&D teams are able to release multi-public-chain asset versions, built-in wallets and asset trading platforms with one-click.


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DREP family

DREP is a decentralized reputation ecosystem based on blockchain technology which empowers various Internet platforms to quantify and monetize reputation value.

DREP Foundation

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DREP is a decentralized reputation ecosystem based on blockchain technology which empowers various Internet platforms to quantify and monetize reputation value.

DREP family

DREP is a decentralized reputation ecosystem based on blockchain technology which empowers various Internet platforms to quantify and monetize reputation value.

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