The impact of blockchain on trust industry
On August 6, 2018, Mr. Cai Yi, financial instry consultant of Huawei Company and founder and CEO of Huaxuan technology, was in daga | blockchain & amp; AI (core group) made a special topic sharing, the theme is: the current situation and Prospect of blockchain finance. The following text is arranged according to the speech of the lecture and has been reviewed by the author
Cai Yi: Consultant of financial instry of Huawei, founder and CEO of Huaxuan science and technology, founder of shared reading association, member of China Writers Association, engaged in financial science and technology research for more than ten years, and is a senior expert in digital transformation of banks
good evening, everyone. I'm very glad and honored to share some thoughts with you here
let's make a simple self introction: my name is Cai Yi. I worked as a writer in my youth. I wrote some books, magazines and novels in the 1990s. At that time, there was no Internet. After work, I have been engaged in the information work of financial instry, from financial channels to data centers, from outlets to technology, witnessed the development of financial technology, and also found some problems. After 2014, I worked as an investment partner and in recent years as a financial instry consultant in Huawei. From the cognitive level, I worked as a consultant for the talent development of digital transformation in the financial instry
in 2015, I started Huaxuan technology and sharing reading club. At present, we mainly focus on the cognition of blockchain and the implementation of financial technology solutions. At the cognitive level, interactive sharing and knowledge management are carried out in the way of book club. At the technical level, the process and scene of the financial instry are reshaped by combining blockchain, big data and AI technologies. I am interested in blockchain and often study and discuss with some friends. Of course, some views are still superficial. I hope you can exchange more criticisms and corrections
the elite think tanks in the United States once believed that the core of maintaining global leadership is science and technology, which must rely on economy, and the core of economy is finance. So what is the future of finance
today's topic is: the current situation and Prospect of blockchain finance. I would like to introce it mainly from three aspects:
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briefly introce finance and financial system
the current situation of blockchain finance
prospect of blockchain finance
First of all, let's talk about the concept of finance. The word "finance" originated from Japan after the Meiji Restoration (1868), which is somewhat related to the gold standard established by Japan in 1897. At the beginning of the 20th century, it was introced into China from Japan. It was first proposed by Finance Minister Liang Qichao in 1902. At that time, Zhang Zhidong raised his objection. Therefore, after the Sino Japanese War of 1894, China remained in the silver standard, but it also made China avoid the Great Depression of 1929 The original meaning of finance is "money accommodation", which refers to the circulation of funds in the society. Later, its meaning has been expanded to indicate transactions and economic activities related to money and credit. In fact, there is another reason: gold used to be the only medium in international trade, and its value and wealth were based on gold. Therefore, when making standard gold bars, people need to melt gold into shape, which may be the original meaning of the word "finance", that is, to melt metalFinance is the general name of currency circulation and credit activities and the economic activities associated with them.
let's look at the definition of Finance later: finance is the general name of currency circulation and credit activities and the economic activities associated with them. In a broad sense, finance generally refers to all the economic activities related to the issuance, custody, exchange, settlement and financing of credit currency, Even including the trading of gold and silver, the narrow sense of Finance specifically refers to the credit currency financing
In short, the contents of finance can be summarized as the issuance and withdrawal of money, the absorption and payment of deposits, the issuance and recovery of loans, the trading of gold, silver and foreign exchange, the issuance and transfer of securities, insurance, trust, domestic and international currency settlement, etc. To put it more bluntly, finance has two-way feedback. The institutions engaged in financial activities mainly include banking, insurance, securities, trust, financial leasing, etc. We all know this better and have frequent contact with it. Therefore, to understand the meaning and institutions of finance, we also need to understand China's financial system
2 China's financial system the development of China's financial system can be roughly divided into five stages:
initial formation stage, the first five years (1948-1953): the establishment of the people's Bank of China (1948). At this time, the PBC is far from what we want now. But it marks the beginning of new China's financial institution system
In the second five years (1953-1978), the people's Bank of China (PBC) is the only financial institution in China that deals with all kinds of banking business, integrating the central bank and ordinary banks. In fact, reunification means that we the model of foreign countries. I will not talk about specific countries In the third five years (1979-1983), the Bank of China (established in 1912), the Agricultural Bank of China (established in 1951) and the Construction Bank of China (established in 1954) were restored or established one after another, but the people's Bank of China still integrates currency issuance and credit. We can see that after the reform and opening up, China's financial instry has developed very fastthe diversified financial institution system has begun to take shape. Ten years (from September 1983 to 1993): it has formed a financial institution system with the people's Bank of China as the core, the four major professional banks of instry, agriculture, China and construction as the main body, and other financial institutions coexisting and cooperating. After 1987, there were Bank of communications, China Merchants Bank, Shenzhen Development Bank, CITIC and Hengfeng. In 1988, Ping'an, Guangfa and Xingye appeared. Everbright, Huaxia and Shanghai Pudong Development Co., Ltd. appeared in 1992, and the Securities Regulatory Commission was set up in the same year
the stage of building and improving the social * * market financial institution system (since 1994): it has formed a relatively complete financial institution system with "one bank, three meetings" as the leading role, large, medium and small commercial banks as the main body, and a variety of non bank financial institutions as the auxiliary wing. In 1994, three major policy banks (China Development Bank, Export Import Bank of China and Agricultural Development Bank of China) were established. In 1995, Minsheng Bank, the first private commercial bank, was established (which is of great significance). In 1998, urban commercial banks emerged and CIRC was established. In fact, the CBRC appeared relatively late, and it was only established in 2003. Since then, the pattern of "one party, three meetings" has been formed. However, not long ago, the China Banking Regulatory Commission and the China Insurance Regulatory Commission merged into the China Banking and Insurance Regulatory Commission. You can pay attention to this
from the perspective of evolution, the normative research of finance is often linear
that is, we often take a certain evolution form as the standard (usually developed market economy system, such as the Soviet Union, Germany, the United States and even Japan), describe the progress path of the financial system from non marketization to marketization, from inefficient allocation of financial resources to efficient allocation, and focus on explaining the gap of the standard form and the reasons
In fact, we can find from the development process of China's financial system just now: since 1978, China's financial system has evolved in the direction of marketization, standardization, diversification and internationalization, All kinds of financial institutions show a "network" and "strong connection" business form, that is, the connection degree between banks, banks and other financial institutions, as well as financial sub markets has increased significantly, and the credit connection is increasingly close, mixed and complicatedthe ecological environment of financial instry has also undergone some obvious changes. On the one hand, traditional formal financial institutions seek to speed up transformation and innovation, and strive to seize the opportunity in business strategy, market positioning, management structure, format and proct innovation. On the other hand, a large number of emerging financial institutions have emerged
financial format also presents new characteristics such as real estate financialization, non bank institutions "banking" and asset securitization
The above changes are beyond the imagination of the instry, regulators and policy makers, and will bring a series of impacts:on the positive side, the scale and composition of the financial system have been expanded, the business expansion and financial service capacity of financial institutions have been improved, the financial market has been developed, and innovative payment has developed rapidly. That's what we're going to talk about in financial technology
in a common saying, when the forest is big, there are all kinds of birds. The negative aspects are mainly reflected in the following aspects: the interaction between the
financial system and the real economy tends to be complex, and the role of the financial system in promoting and amplifying asset bubbles is underestimated. p>
the reticulation and strong correlation of the financial system widen the gap between the financial instry and financial supervision, and weaken the effectiveness of traditional supervision. China's current financial supervision system has only been in operation for more than ten years
the transmission path and mechanism of monetary policy through the financial system have changed (the transmission chain of monetary policy has been lengthened or deformed, the conctivity and effectiveness have declined), and the initiative and effectiveness of regulation are facing new constraints. Since its establishment in 1996, the current monetary policy framework has been constantly improved in response to the development of economy and financial market, but the complexity of the financial system in recent years has put it to a new test. Broad money M2 is also impacted by financial deepening, electronic payment and other factors, and further weakened by the shadow banking system
all kinds of cross market, cross business and cross-border behaviors to evade supervision make a variety of risk factors intertwined, such as: capital pool operation with serious mismatch of maturity and procts hides large liquidity risk, proct nesting leads to risk transmission, insufficient shadow banking supervision, local debt, real estate, external shocks, etc., all of which bring great challenges to the stability of the financial system
without comparison, there is no harm, and China's financial system as a whole is relatively backward. This kind of backwardness is mainly reflected in the backwardness of bank innovation: the people's Bank of China announced in October 2015 to abolish the "interest margin protection", while the interest rate of the United States had been completely marketized as early as April 1986, and China was nearly 30 years late
3 the institutional framework and basic problems of China's financial system
Second, the * * third party acts as a credit intermediary to guarantee the realization of asset transfer transactions
the third is the transaction settlement and clearing completed by the centralized clearing organization
Based on this, there are also four problems:1) credit system and trust mechanism. Traditional finance must have strict transaction records to accumulate credit. Without transaction records, it is difficult to achieve financing or loans, because there is no technical means to ensure the safety of transactions between the two sides
(2) transaction settlement takes a long time. The time of traditional financial transactions has been speeding up, but the settlement time is still relatively long, especially for cross-border transactions, which often can not arrive immediately (3) the cost of intermediary service is high. The traditional financial transaction system is very importantBlockchain technology has the advantages of being difficult to tamper with and easy to trace. It can play a role in identity information management, trust mechanism construction, and credit information chain of small and micro enterprises
here is an example of a bank in Nanping:
e to the outbreak of online business, the original offline signing method has been unable to meet the needs of the rapid change of the banking business, and the bank's digital construction is imminent, but the bank's risk control department has strict compliance requirements:
< UL >online business data sensitive privacy, Is the transmission secure
does the electronic signature have legal effect
can electronic evidence be accepted by the court
these concerns have become obstacles for banks to introce e-contracts and carry out business digital transformation
after adopting the unique ENA initiative forensics patent technology of the "real hammer" trusted electronic evidence platform, a bank in Nanping, through the clean server of the notary office, online carries out real-time preservation, storage and certification of the electronic data of the target system, records the whole process of the electronic data from generation, transmission to storage, and finally the notary office issues the forensics preservation report with official seal, The effectiveness of the documents is notarial documents, which can be directly accepted by the court. Because the report is issued by the notary office, it has more credibility than the self certification of the third-party E-contract platform, which solves the concerns of the risk control department of the bank at one stroke. The whole process is online and automated, and the front-end customer operation has no perception
at the same time, combined with the back-end case system of "real hammer" and the outsourcing execution service, the bank realized the rapid dispute resolution of Internet business. It not only ensures the compliance and effectiveness of the electronic contract signing process, but also solves the problem that the bank cases are scattered all over the country and the cost of legal business trip is high; The litigation cycle is long and there is no efficient disposal channel
Application of blockchain technology in banking
2.1 self regulatory platform
we rarely see a platform that can conct self-regulation without intervention. In all areas similar to the financial instry, central banks and regulators (such as the securities and Exchange Commission) come to set uniform rules and manage them. Blockchain technology makes the system no longer need the supervision from enterprises or government entities, so as to regulate the operation of the system. Blockchain provides a mechanism called "workload proof", which allows each computer node in the system to participate in the approval of each transaction. The system has built-in check and balance mechanism to ensure that no computer in the system can deceive the system. All of these reviews and supervisions are completely automated by the computer. At present, there are many other consensus models that can replace the "workload proof" mechanism, but still retain the core idea that each client or node can manage the system point-to-point. What's more, blockchain makes every element in the system completely transparent. Therefore, for such a large-scale community all over the world, blockchain technology can easily review and manage it - "supervision from the public", thus effectively recing fraud. Imagine how much it can save costs and improve efficiency
2.2 compliance with the law and easy tracking
actors (users) and their behaviors (sending money or assets to others) are recorded on the blockchain. Any transaction between the two parties can be tracked and inquired, and can be proved in court. This is because all transactions need a set of public key / private key to encrypt and decrypt processing and transactions. Once they are added to the blockchain, they are permanent and unchangeable. Any record, once written to the blockchain, cannot be tampered with. Anyone holding assets or digital currency on the blockchain will have their own public key on the blockchain. When a transaction occurs, it needs to be signed by the previous holder who controls these assets using the private key. Blockchain also allows a variety of mechanisms for transactions. For example, it can be set to require two people to jointly sign a transaction. In a system without endorsement of enterprises or government, the legally binding mechanism can greatly enhance the trust factor for the system
2.3 built in business continuity
a global platform can not bear the risk of downtime when concting major transactions. Blockchain, a complete point-to-point network, has many distributed nodes and computer servers to support, which has high reliability. Every node in the system keeps a of the complete blockchain data. This makes the whole network highly fault-tolerant, if any part of a few nodes have problems, it will not affect the other parts of the network continue to operate. This makes it possible to achieve 24 / 7 all-weather operation characteristics like disaster recovery center or database rendancy center without using complex technology
2.4 evolution model without burden
in the system, there are a series of rules and key points to help decide who has the right to approve the transaction and what needs to be reviewed before the transaction is written into the blockchain. Blockchain technology can fork out new versions according to different environments and business model requirements. The new version also needs to conform to the overall concept of blockchain. All these changes must be approved by all members of the system, and everyone can get the same benefits. In addition, these changes will not affect the transactions that have occurred and confirmed on the blockchain. For a system, it has enough robustness and flexibility. People often compare the similarities between the Internet and blockchain, including their growth potential and business prospects. These two systems have very similar characteristics. The Internet does not need or does not have a centralized management department (except for a few for the management of agreed URL and domain name registration), but also has enough rendancy and strong fault tolerance. The Internet has been developing for so many years, from basic text to rich graphics, video, animation, and all this has not affected other existing systems and content. Blockchain has fully proved its function and practicability in bitcoin system. Just as the famous Chinese philosopher Lao Tzu said, "the tree that embraces is born at the end of a tree."; The platform of nine layers starts from the base soil; A journey of a thousand miles begins with a single step. " I think this should be the creed of all the pioneers of blockchain technology
as a rookie of Bubi blockchain, I tell you so much!
nowadays, many instries are studying how to use blockchain technology. For example, Ruitai coin is the use of blockchain technology, which is an innovation of asset digital currency.
the instries that benefit from blockchain creation include: e to the high degree of integration, blockchain technology can not only provide technical support or meet the needs of scenarios for enterprises in the financial field, but also proce catalytic effect on some manufacturing enterprises after integration through their own characteristics such as high-end equipment
with the graal maturity of blockchain technology, six fields supported by science and Technology Innovation Board will adopt more and more research reports released by lianxun securities show that with the help of policy dividend and instrial capital, the application of blockchain technology is expected to develop rapidly in the future, and graally radiate to other instries and scenarios starting from the financial instry