In 2015, Alibaba Research Institute and Institute of Finance, Chinese Academy of Social Sciences held a seminar, and I was invited to attend. The theme of the conference is very grand, and it is proposed to establish a theoretical system for Internet finance! Around this topic, many leading Chinese scholars have put forward their own views. I am also very inspired,
especially with the rise of blockchain technology in recent years, which seems to have an answer to this goal. Before discussing what blockchain can bring to Internet finance, let's take a look at what the Internet will bring to finance.
The core of finance is undoubtedly the establishment of "credit". The most primitive commodity economy is barter. But it soon became apparent that such transactions were costly. If you pull a few carts of leather goods, but the transaction is not completed, you may be robbed by bandits, which not only costs high transaction costs, but also faces high risks.
Therefore , everyone considers that in order to make the market economy develop better, we must first reduce transaction costs. So it quickly transitioned to using credit to establish transactions. The establishment of credit is the core of finance. Of course, our traditional credit establishment undoubtedly relies on many "centers", such as the central bank, commercial banks, courts, and
economic police. But the problem with traditional finance is that the cost is too high. I personally like to cycle around Beijing. As long as I cycle more than 100 kilometers, even if I only reach the suburbs of Beijing, the financial ecology has undergone tremendous changes! I often can't find an ATM (automatic teller machine) machine,
or . I'm not very fond of carrying cash myself, and once or twice in the suburbs of Beijing, I couldn't live in a restaurant, eat food, or even buy water.
For example, this is like the human body. The aorta alone cannot reach the whole body. There must be capillaries so that many parts of the body can be nourished. If there is a problem with the capillaries of a person, then you will suffer from various diseases, which are very serious. Therefore, the first step of Internet finance to become popular is
actually "Alipay", and its first step forward is to rely on big data to establish credit, which is unprecedented. When I started my business, I also went to the bank to get a loan. The process is very cumbersome. You need to investigate your assets, and you can't wait to find out all your family assets before deciding whether to give you a loan
. It is said that the so-called small loan in the bank at that time was five million yuan. Why such a large amount? Because the cost can't come down. Therefore, it is not enough to rely on the bank alone. Not to mention that there is no ATM in the valley, many small and medium-sized enterprises cannot even obtain loan services. As a result, Alipay and Yu’e Bao suddenly appeared. “Credit”
is based on the big data of Internet transactions. This is a major breakthrough! Big data finance is basically the first step in establishing internet finance. It makes the cost of credit establishment much lower than the cost of traditional bank lending. Later, P2P (peer-to-peer), crowdfunding, etc. appeared, which all contributed to the trend of
decreasing .
So why do you still need blockchain? Because it is far from enough to generate "credit" based on the big data of Internet companies, let us look at several problems in traditional finance.
First, the big data of Internet companies actually forms data silos. Every Internet company will advocate the spirit of sharing, openness and transparency of the Internet. But in fact, will they share the big data they have with others? Currently, the answer is no. Under the current situation, big data must be the
absolute , and it is impossible to share without borders, which leads to the problem of "big data concentration".
In this way, the development of the Internet has now appeared a paradox, moving towards the opposite of its original intention. The concentration of big data will lead to the Matthew effect of the rich getting richer. If a data island is formed, big data resources are concentrated in the hands of a few people, and the whole society cannot form a circulation. These precious data resources can only be used by a small number
of controllers. Individual users, as big data producers, have no initiative to obtain credit resources at all. Right, which is very unfavorable to the further reduction of the cost of credit in the global market.
Second, data ownership is now mismatched. Massive amounts of data are generated by every participant, especially on software like Tencent WeChat. But does the ownership of big data belong to every participant? Can participants manage their own big data? The answer is also no. Especially in early 2016
, a bad thing happened - the "Baidu sell it" incident. The ownership of the data and resources generated by forming a "ba" on Baidu should belong to the users, including the "ba master", which is also elected by participating users. However, Baidu can openly sell the big data benefits generated!
Likewise, how much data do we generate every day on WeChat? The social and transactional data we generate every day should belong to everyone who produces it. According to the spirit of Internet sharing, equality and transparency, what this big data produces is a "global credit resource".
Therefore, the new innovation must solve the problem: big data must be able to be shared, and the ownership must be clear. On the surface, these two points are somewhat contradictory. As we all know, the first generation of Internet solved the problem of free transfer of information. There is
no . But "assets" can't. In reality, the ownership of "assets" is unique during the transfer process, and the ownership of assets cannot be copied casually. Therefore, if it is done according to the first-generation Internet TCP/IP protocol, it seems that everyone cannot establish an ownership and credit system on the Internet. Because asset attributes
must be unique, it cannot be said that copying is just copying. If any ownership can be replicated indefinitely, no one wants to believe it, and there is no credit at all.
The birth of Bitcoin in 2008 solved the above two problems. Satoshi Nakamoto believes that no one center can establish trust. Because any excessive centralization results in information asymmetry, there will be situations in which the central power is used to damage the interests of participants and the interests of other parties in the market. Therefore, the Bitcoin white
paper clearly stated: We want to create a payment system that does not require a third party and does not require an intermediary, that is, a payment system for electronic money. But this must first solve the problem of the uniqueness of asset ownership, that is, it cannot be paid repeatedly. Otherwise, this so-called electronic currency is nothing more than a stored number, and if
it can be copied countless times, it has no credit value. Before that, many people also tried to build an electronic money system. Similar "Q coins" are obviously issued by Tencent. Once Tencent collapses, Q coins are worthless. But the P2P electronic money payment system that Satoshi Nakamoto claimed to create does not trust
any center and does not require any third party!
Bitcoin's solution is the blockchain technology we are talking about now. The first and most central concept is "timestamp". The "time stamp" itself was not invented by Satoshi Nakamoto, and there has long been a national "time stamp" center. For example, a contract can be covered with a "network timestamp", which is equivalent to a proof.
That is, at this point in time, the text of the contract has been formed, and when a dispute arises, this proof can be used to file a lawsuit. Every transaction in the Bitcoin system is stamped with a "time stamp" in order to prevent double payments. Because after the "time stamp" is stamped, the same asset cannot be paid to a second person.
If someone pays repeatedly, the time will not match, and the system will automatically identify it as an illegal transaction. The only legal transaction can only be the one stamped with the "timestamp", which successfully solves the problem of double payment. This method sounds like it can solve the problem of repeated payment and proves the uniqueness
of , but the question is: who will stamp this "time stamp"? Satoshi Nakamoto is obviously a believer in the market. He believes that the market proposed by Adam Smith is composed of self-interested people, and there must be certain rules of interest. Covering the "timestamp" are so-called "miners". Every 10 minutes, miners stamp each transaction on the entire network with a "time stamp
" - accounting. They are also profit-driven. The interests of miners are the rewards of new coins generated by the coin base, which are obtained by competing for the only legal bookkeeping right for a period of time (about 10 minutes). , other miners in the entire network must synchronize and
unify its bookkeeping, and then compete for the next block bookkeeping right. Initially, this reward was 50 bitcoins. According to the rules, it is halved every four years. Halved to 25 bitcoins in 2013. The so-called block chain is such a one-way accounting chain formed by connecting one block book after another.
Bitcoin's blockchain relies on consuming computing resources to testify to the entire network and re-establish the credit system. We often see discussions on the Internet, for example, what the next generation of WeChat might be, what the next generation of Taobao might be, etc. In our opinion, the next generation is most likely a truly decentralized system. The big data generated by everyone on
WeChat is of great value to everyone. If these data are encrypted with a system like Factom (notary public) to form a new digital watermark (hash) and then stored on the Bitcoin blockchain, the big data generated by each individual cannot be tampered with, and the private key is in control In the hands of each
individual , they also have the ownership of their own big data. When anyone of us needs to lend to a bank, we only need to provide our own public and private keys to any bank in the world, and we can get the credit situation of the lender according to big data analysis, which allows everyone to pass the big data + area
Blockchain credit.
Gao Hongbing, vice president of Alibaba, said to me: "Traditional financial credit is built on reinforced concrete buildings. Do you think banks have to build buildings? But future credit is built on blockchain data." The chain relies on the entire network to distribute accounting, free notarization, and establish a consensus database, which
is the data building of future credit.
Think about the future. For example, it turns out that your birth certificate, real estate certificate, marriage certificate, etc., need to be prepared by the government, as if the government can recognize it. But once you cross borders, you get into a lot of trouble, including contracts. Contracts may not be recognized or enforced after transnationality.
The entire traditional credit enforcement system is very costly. These costs are borne on each of us. However, if the whole network notarization helps you prove it, it is almost impossible to cheat. Otherwise, like I just said to change the time, unless I have the ability to change everyone's watches. In the future, everyone will notarize one thing, such as notarizing your relationship, and
it will become a fact of the entire network at once. It is almost impossible to modify it, unless you go to every miner in the entire network to modify it, and the cost is unacceptably high. . Now, if you want to modify it, I have asked Bitcoin miners if their world wants to tamper with the data on the blockchain in this way, the cost is billions of RMB (and increasing rapidly
with time). Once the cost is high, everyone does not want to cheat, because the price paid is disproportionate to the gain.
In a new era, the future credit and authenticity will be realized by notarizing a certain agreement on the entire network, and relying on every computer in the entire network becoming a bookkeeper. This opens up vast spaces in human history. What problem does it solve? In the future, credit will be generated by each consumer on the blockchain by relying on big data. Just as Secretary Huo Xuewen of the Beijing Municipal
Bureau Finance said, "The blockchain will become the infrastructure of global finance", which is the future credit building.