The worse the social credit environment, the more we must embrace the blockchain finance

One of the most exciting technologies in the world today is blockchain technology. If the Internet belongs to the information Internet, then the blockchain can be called the value Internet. For example, Bitcoin is the earliest digital currency application, belonging to the value chain based on blockchain, which itself is a distributed, multi-node value Internet.

The industry uses “blockchain 1.0” to refer to blockchain technology that is applied to digital cryptocurrencies such as bitcoin. In the beginning of 2009, Nakamoto created Bitcoin to solve the trust problem that financial institutions have as a third party to promote trade on the Internet. These problems include, for example, the buyer may return the goods, but some products and services cannot be returned; the financial institutions as the third party to the transaction are relatively expensive and take a long time; a few customers will be fraudulent. However, compared with the problems caused by the poor social credit environment in China, the trust problem mentioned by Nakamoto may be small. The problems caused by the poor social credit environment in our country are much greater. Some enterprises in China have clearly failed to pay their debts, and will continue to conceal debts from banks, small loan companies and relatives and friends, and continue to borrow. After the large-scale borrowing, the burden of debt service was heavy. I realized that it was difficult to pay off the debts at the end. I simply chose to “escape the debts” and flee with money, that is, “running the road”.

The more a country has a bad social credit environment, the greater the usefulness of blockchain technology. If blockchain technology is adopted and financial arrangements based on blockchain technology are implemented, there will be no such situation that the above-mentioned business owners will abscond. We all may have heard more about blockchain and blockchain technology. The average person does not need to be too involved in the blockchain and blockchain technology, as long as they know how it works, what is the use and how to use it. Just as we don’t need to know the specific circuit diagram of the TV set, we only need to know the basic operation mode of the TV set, what is the use and how to use it.

The blockchain belongs to a distributed, multi-node electronic accounting network. The accounting network records the transaction between the nodes, that is, the value transfer, into the standard form of the “book”, and the new account record formed by each transaction is Record in a block that is appended to the most recently attached block. Each block is encrypted, thereby forming a blockchain. Therefore, the blockchain is actually an ever-increasing list record, but is stored in a distributed manner across all nodes of the network. It is a chained data structure that combines data blocks in a chronological order in a sequential manner, and is cryptographically guaranteed, non-tamperable and unforgeable distributed ledger. The earliest block in human history was the first block in which Nakamoto created the first bitcoin in early 2009, also known as the “genesis block.”

The so-called blockchain technology is to realize the application of blockchain in technology. It combines computer technology such as distributed data storage, peer-to-peer transmission, consensus mechanism, encryption algorithm and smart contract, thus forming a new type of transaction, ie peer-to-peer value transfer application mode on the Internet. The consensus mechanism here is to use computing technology to realize that multiple nodes or even all nodes participate in the confirmation transaction, that is, the value transfer is true. Only after the consensus is formed, the new transaction is written into the new block. Since all of this is based on trust in technology, not trust in interpersonal relationships, this technology circumvents and transcends the drawbacks of past transactions that rely on interpersonal trust, such as fraud, remorse, money robbing, and high mediation. transaction cost. Therefore, the characteristics of blockchain technology mean that if it is applied to a specific economic or financial scenario, it will be beneficial to the protection of property rights as well as to the expansion of the market, that is, to expand the human cooperation emphasized by the economist Hayek. “Extended order.”

The application scenarios of blockchain technology are widely used in a wide range of fields, and are suitable for scenes with many participants and frequent transactions. Possible scenarios include digital currency, payment clearing, digital notes, bank credit management, equity certification, exchange securities trading, supply chain management, insurance management, financial auditing, referendum, book management, and more.

Bank credit can be used as an example to illustrate how blockchain technology can be applied to the agenda life. Some borrowers borrowed money from the bank and then managed to “escape the debt”. If blockchain technology is applied to bank lending, then “escaped debts” will be difficult to implement. For example, the bank issues a 1:1 ratio of tokens (equivalent to Tencent Q coins) through the blockchain technology, and then lends money to the borrower. The borrower spends the funds and the recipients become the blockchain. A new node, because the bank stipulates the borrower’s borrowing project use through smart contracts, it is easy for the borrower to comply with the loan agreement. Even if the borrower is not correct, the borrower cannot carry the token “running the road”.

Another example of supply chain finance based on blockchain. According to reports, a few years ago, Cornell University in the United States was preparing to build a large number of solar power plants in the Science Park, and finally was built by a successful engineering contractor. The contractor needs a bank loan for this purpose. In order to save on loan costs, the engineering contractor hopes that the bank can provide engineering companies with low-interest loans based on the credit of Cornell University. In the past, banks were generally reluctant to do so because project information was opaque and the risks were too high. However, a blockchain service development company in Silicon Valley designed a blockchain technology application for the loan project, which solved the bank loan demand of the engineering contractor. The specific approach is: First, the parties’ contracts can be managed through the blockchain, and the authorized banks can see all the contracts signed by the upstream and downstream parties. In the past, banks only saw their own contracts. They did not know that the final buyer of solar panels produced by a solar company was Cornell University. Knowing that the ultimate buyer is Cornell University, the bank dared to lend to the parties with low interest rates.

The above application of the blockchain technology to the financial scenario belongs to the application of the blockchain 2.0, and particularly relates to the application of the smart contract. In the future, the blockchain 3.0 will be realized, which reflects the comprehensive application of blockchain technology on the Internet. It can identify, measure and store the property of each Internet’s representative value, so that assets can be tracked on the blockchain. Control and trading.

Original from:VipInvestor » The worse the social credit environment, the more we must embrace the blockchain finance

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