On October 21, the Shanghai Stock Exchange Information Network Co., Ltd., a subsidiary of the Shanghai Stock Exchange, officially released the Shanghai Stock Chain, providing the market with "cloud-chain integration" infrastructure technology facilities, and providing support and services for blockchain application innovation in the securities industry. Securities companies have participated in the research and development of the Shanghai Stock Chain and related scenarios.
Super High Information is a blockchain technology support partner of Shanghai Stock Exchange Information Network Co., Ltd., and has deeply participated in the entire design, construction and development and implementation process of the Shanghai Stock Exchange. Recently, the chain catcher interviewed Cui Jianjun, the founder and chairman of Super High Information, and COO Chen Qing, to learn more about the application scenarios and design mechanisms of the Shanghai Securities Chain, and the application direction of blockchain technology in the securities industry.
Author | Gong Quanyu
Chain Catcher: When did Super High Information participate in the preparation and development of the SSE Chain?
Cui Jianjun: Tego Information is a technology company focusing on the underlying technology and application solutions of the blockchain. The main body of the team comes from the School of Information of Fudan University. In 2016, it began to cut into the research direction of blockchain technology from the traceability of commodity applications. At the beginning of 2019, Fudan University and the Shanghai Stock Exchange carried out research on the application of blockchain technology. We were fortunate to participate in the blockchain performance testing of specific business scenarios such as securities log deposits. We also carried out design testing of application scenarios in the securities industry with the SSE information technology team.
In the past two years or so, the trend of blockchain development at home and abroad has been constantly changing, but the entire team has settled down on securities industry research. Before the listing of the Shanghai Stock Chain, there were already three sub-chains, including the certificate deposit chain, the copyright chain, and the appropriateness management chain, in operation. The longest sub-chain has been in trial operation for several months.
Chain Catcher: You just mentioned that the Shanghai Stock Exchange has been applied in many business scenarios. Can you talk about the specific application logic?
Cui Jianjun: Blockchain is a new type of digital value registration and exchange technology, which is indeed very suitable for the securities industry. Although there have been many beneficial practices in the industry since 2017, in general, this field has just begun. Whether it is underlying technology, business applications, or regulatory technology, there are still many unsolved issues that deserve in-depth research and exploration. At the beginning, we were not very confident, but after communicating with brokers and peers, we found that there are many rigid application scenarios that require the use of blockchain technology to solve problems.
The first scenario of the Shanghai Securities Chain is that brokerages entrust log deposits. Brokers need to keep a large number of logs every day. Regulators require that these logs must be stored in different places in addition to centralized storage, and they must not be tampered with. It is a headache.
In the early days, the method of directly burning CD-ROM was adopted. At that time, the log file may be several hundred megabytes, and the pressure of remote storage and response to supervision was not great. However, in the past decade or so, the amount of log data for brokerage firms has increased dramatically, and it can only be stored on hard drives or cloud services. Everyone has the ability to change the hard disk data, and the password on the cloud can also be changed. There is no way to prevent it from being tampered with. In this way, the effectiveness of the data to the regulatory authorities will be weakened.
Using a combination of blockchain and shard storage technology, the log file is first indexed and sliced, and then tens of thousands of records are "compressed" into a file index for on-chain storage, while ensuring that the file is tamper-proof, Solve the pressure of backing up large files in different places. When files need to be "restored", similar to the current blockchain judicial deposit application scenario, electronic evidence is extracted on demand, providing a convenient and effective way for regulatory verification.
Chain catcher: In the past, there was no way for brokerages to record these logs as valid evidence?
Cui Jianjun: It is impossible to find an intermediary to "endorse" data with an average of hundreds of gigabytes per day. The cost of storing and verifying it in different places is beyond the acceptable range. In addition, user data stored by third parties is also at risk in terms of commercial privacy protection. Another problem is that if the information is retrieved from the complex brokerage backstage and then stored in isolation, the judicial effect is also limited.
Therefore, in addition to the traditional blockchain deposit technology, we also try to expand the application of some deposit certificates. For example, cooperating with securities companies to develop blockchain technology for depositing certificates in the middle stage, fixing the subject, time, and sequence of all evidence deposits, and pattern depositing the certificates, and then unified chaining, which can sell and sell online products in the securities industry. The causal relationship before and after the event in routine business such as process and risk notification is connected in series to form an interlocking evidence chain with inherent logical relationships.
Chain catcher: The NASDAQ exchange blockchain product manager once said that the exchange is testing blockchain technology, certifying its platform, and using blockchain technology to issue stocks. What do you know about the future of the Shanghai blockchain? Will there be a similar plan?
Cui Jianjun: Digital securities is an imaginable application direction of blockchain. After years of hard work, my country's securities financial industry has completed paperless and electronic securities. But in the digital age, securities are in the form of "programmable" digital certificates, that is, digital securities. Digital securities are registered on the blockchain and represent a variety of credible digital certificates such as stocks, bonds, derivatives and even physical alternative assets. After the introduction of a central counterparty and liquidity saving mechanism, it can even be directly traded point-to-point. Digital currency and smart contract technology can also bring new imagination to digital securities, such as automatic cash flow collection and payment.
Nasdaq has been experimenting with an equity issuance platform based on blockchain technology since 2015 to promote the blockchain registration and issuance of small equity financing projects. This is of exploratory significance. It was also very difficult to implement at that time. It was unavoidable to have a major impact and adjustment on the original system in terms of technology, management system, and design structure. At present, at least in terms of technical implementation and my country’s securities market The features do not match yet.
The China Securities Regulatory Commission also issued a notice in July this year, agreeing to pilot blockchain equity registration in regional equity trading markets such as Beijing, Shanghai, and Zhejiang. We have noticed that some local equity trading centers have adopted a pilot program for the native realization of equity registration transactions on the blockchain, which is more malleable and technically tense than the programs in the foreign securities industry. This shows that the application of digital securities technology by my country's industry regulatory authorities is sufficiently innovative and inclusive and forward-looking.
Chain Catcher: What is the native implementation?
Cui Jianjun: If only the blockchain technology is regarded as a distributed ledger, the data is still generated, transferred and stored on the original system, but the results are written to the chain, which is equivalent to that the blockchain is a carrier of external records. Blockchain technology can only stay at the level of traceability applications. Digital assets rely heavily on "originality". All native data related to assets is directly registered, transferred and used on the blockchain, which means that the data is on the chain when it is created, rather than anchoring off-chain information . In this way, both on-chain and off-chain data can be penetrated and traced, and can be self-certified and certified by others.
Only after the original realization of digital assets is possible, data sharing and transactions will become possible. Nowadays, many big data transaction centers are being built and used, and the data right confirmation method is a very troublesome problem, because the originality of the data is not solved.
Chain catcher: You mentioned the distinction between the main chain and the sub-chain many times earlier. So what is the difference between the functions and positioning of the two? Why is it designed like this?
Cui Jianjun: Due to the performance limitations of the blockchain, there must be no single chain that can carry all the services in the future. It must be a scenario where ten thousand chains coexist, so we recommend designing the main chain and the sub-chain. The sub-chain is responsible for running specific business. Each time a new application scenario is opened, a new sub-chain can be opened. Each is relatively independent, but it is necessary to open an account on the main chain.
The main chain is more of an on-chain resource management platform, which assumes the responsibility of overall security and resource planning. It does not run specific business, asynchronously locks the sub-chain information, and monitors the healthy operation of the sub-chain at all times. At the same time, the main chain of the SSE chain has a governance committee, which determines members according to the number of nodes, and can discuss the governance rules of the chain, smart contract review, etc. together.
An important reason for adopting this design is security. It is necessary to avoid the interruption of trust in the entire chain due to a business problem or poor coordination.
Another reason lies in the protection of commercial privacy. There are a small number of initiators and participants in the business scenarios of each sub-chain. They spend a lot of resources and costs to try. They are equivalent to pathfinders. From the perspective of protecting innovation and ecological incentives, they are the first to move. It is bound to have some advantages in the resources of the business sub-chain. However, we are still exploring other governance methods to coordinate as much as possible the balance between business privacy protection and resource ecological sharing.
Chain catcher: Businesses like blockchain deposit certificates. In fact, many alliance chains such as AntChain have already launched such businesses for the financial market. What are the advantages of the SSE chain?
Chen Qing: At present, the barriers to using blockchain technology are relatively high. Enterprises independently carry out blockchain application pilots, which often require millions of dollars of investment. From the perspective of providing a credible environment, lowering the barriers to innovation of brokers' blockchain and the consumption of human, financial and material resources, whether it is BaaS services provided by Internet companies or professional chains provided by industry core institutions or technical service providers, this is the same goal.
As a unique technology suitable for distributed governance architecture, the value of blockchain lies in breaking through the information barriers between enterprises and activating the potential for industry cooperation. However, it is essentially a technical tool and cannot be separated from industry rules, participants and application scenarios.
The special position of the Shanghai Stock Exchange as a core institution in the industry lies in the unified docking of securities industry regulatory agencies, judicial institutions, and impartial institutions to form a "securities industry credible alliance". Securities companies and participating entities can freely and independently carry out innovative collaborations and give birth to new Innovative business. Carrying out various financial innovation businesses based on the Shanghai Stock Chain, forming standards in terms of products, technology, and supervision, and can better provide the industry with solutions for credible deposits, smart contracts, identity authentication, data security, technical training, etc., close to the securities Industry ecology.
Chain catcher: Like all kinds of cloud computing and artificial intelligence in the past, is it possible for the blockchain to have a more radical and transformative impact on the securities industry?
Chen Qing: From the perspective of development potential and future influence, blockchain technology is at least as good as the previous technologies. These technologies are also a symbiotic development and mutual promotion relationship. The Internet of Things technology has been developing for 12 years from 2008 to the present. The price of sensors has indeed been reduced by more than 100 times. However, the birth and integration of cloud computing, big data, and artificial intelligence are the things. The decisive factor for the rapid development of networking technology applications.
Blockchain technology is also the same. Although the current development may not have seen obvious results, the application prospects in the securities industry are promising. It is recommended to start with improving the regulatory framework of the securities market, improving the efficiency of industry operation and management, and combining with the application of other emerging technologies. Enter the core innovation fields such as asset securitization and digital securities. Tego Information also has a team in professional fields such as the Internet of Things, big data, FPGA, etc., and has always focused on the integration of multiple technologies to solve the problems of the securities industry application scenarios, and explore experience for the future digital infrastructure of the financial industry.
Chain Catcher: The application of blockchain has always been a pain in the industry. From your many years of exploration experience, what is the biggest difficulty in landing?
Cui Jianjun: Over the years, the blockchain has carried too many ideals and has won the enthusiasm of capital and industry. All kinds of beautiful words still cannot conceal the embarrassment that the blockchain has few major applications outside of Bitcoin and Ethereum. When blockchain enters the physical industry and business scenarios, the most difficult part is precisely the need to break away from the "utopian" fantasy and find a core institution that can carry industry credit and master industry data as the initiator of the "alliance". To the cold start phase of 1.
The securities industry may be the first industry in which large-scale applications of blockchain are born. The Shanghai Securities Chain has excellent and unique industry resources and attributes. We hope that our efforts can contribute to the development of the blockchain industry.
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