The IT industry is very much like the fashion industry. Every once in a while, a new concept comes out and is hotly hyped by IT manufacturers, and the rise of the blockchain is completely a grassroots movement.
Author | Cao Yanming
Larry Ellison, CEO of Oracle Corporation, once lamented that the IT industry is very much like the fashion industry. Every once in a while, a new concept comes out and is hotly hyped by IT manufacturers . The CEOs, CIOs, and CTOs of various companies are brainwashed by the manufacturers. Obediently digging out money, buying software, and launching projects, the results were mediocre. ESB, SOA, BI, e-commerce, cloud computing, big data, AI, etc., etc., are dazzling, exhausted and overwhelmed.
Now there is a new concept - blockchain, which is very popular. Internet companies, traditional IT companies, and even traditional companies have joined the blockchain gold rush. A traditional company that has been silent for many years has long been forgotten. Because of the release of a blockchain project, the stock price doubled in two days. This shows the power of the blockchain concept.
However, what is different from the past is that this time the hype of the new concept does not come from IT manufacturers, but from the self-awakening of various companies. The rise of blockchain is completely a grassroots movement . This article attempts to illustrate some of the larger backgrounds behind the emergence of blockchain.
Two Social Trends: Digitization & Peer-to-Peer Networking
At different historical stages, society has been evolving along a trend. The digitization trend that started 30 years ago continues today and will continue for decades.
With the advancement of ICT technology, a large number of physical objects have been digitized. The best example is letters. Nowadays, no one will send letters to the post office. Letters have been digitized into emails. The physical letters have disappeared, and the physical post offices have not So much is needed, and the physical mailboxes are gradually becoming obsolete.
Not only are physical objects like books, records, photos, movies, and documents digitized, but abstract structures like organizations, institutions, and communication methods are also being digitized. An organization can exist only in the digital world without having a real-world counterpart , a role in an organization can be a digital presence without being a real person.
In the process of digitization, some technical problems have been encountered, such as the digitization of currency and the digitization of assets. It is necessary to solve a classic problem, the "double spending problem", that is, after a sum of money is paid by A to B, A cannot pay any more. to C. This is not a problem in the real world, but it is a very difficult problem in the digital world. After more than 10 years of hard work, this problem was finally solved perfectly by blockchain technology in 2008 .
Another trend is the P2P peer-to-peer network , where the network not only refers to the network in IT technology, but more importantly, various networks in the real world, human-to-human networks, and biological networks. A network between objects, a network between objects with intelligence.
The biggest feature of the peer-to-peer network is that there are no nodes above other nodes in the network, the status of the nodes is equal, and there can be different divisions of labor between nodes, but there is no affiliation between nodes, nodes and nodes are equal. Nodes are organized through consensus to complete a series of tasks collaboratively to achieve a common goal. The society of bees is such a peer-to-peer network, and the primitive human society without hierarchy is also such a peer-to-peer network.
There is a recent book "The Square and the Tower", which is about the game between the two forces in human history, the People's Square and the Tower of Power . The square is a peer-to-peer network composed of ordinary people who are equal to each other, negotiate friendly, divide labor and cooperate, and the entire society is dominated by the square model; Centralized management of the entire society from the tower of power. In the process of human history, sometimes the form of the tower of power is dominant, and sometimes the form of the people's square is dominant. People need centralized power to improve the overall efficiency of society, but the side effects of excessive concentration of power make people prefer peer-to-peer networks.
With the development of the Internet today, resources and information are increasingly controlled by a handful of large Internet companies such as Facebook, Google, and BAT. People have less and less choices, less and less privacy, and people are controlled It feels stronger and stronger, and in this case, has spawned a trend of decentralization.
The earliest attempt was Napster (1999) for music sharing, where everyone could freely share their own music, and the most recent one was Thunderlink (2017), which shared bandwidth and storage, where everyone could freely share their own networks resources and benefit from it. Sharing economy and shared computing can be counted as two examples of peer-to-peer networks.
Trend spawns blockchain
The global financial crisis in 2008 broke people's trust in traditional financial institutions such as banks, and people preferred People's Square to the Tower of Power. In this context, Satoshi Nakamoto (pseudonym) designed an electronic cash system based on a peer-to-peer network, without intermediaries, that can transfer directly peer-to-peer, called Bitcoin.
The underlying technology of Bitcoin is blockchain, which uses ingenious designs such as cryptography, timestamps, and proof-of-work to successfully solve the double-spending problem and enable all nodes to reach pair transactions without the existence of a central authority node. Ledger consensus. Bitcoin was the first successful case of blockchain in practical use.
The Bitcoin network started running in January 2009, and today (February 8, 2018), according to the statistics of the website bitnodes.earn.com, there are a total of 11,701 Bitcoin full nodes in operation around the world, of which the top three are the United States. , Germany and China, accounting for 27%, 17% and 7% of the total, respectively.
Not only Bitcoin assets, but also other digital assets (such as USDT, a blockchain digital asset anchored to the U.S. dollar) are running on the Bitcoin network, with total assets exceeding 800 billion RMB. If you count other blockchain applications and digital assets that depend on the Bitcoin network (such as Factom, a blockchain depository service), the total amount of digital assets carried by the Bitcoin network is even greater.
It can be said that blockchain technology was born under the influence of two major trends, digitalization and peer-to-peer networking.
In addition, the convergence of the two major trends has created a flood, and distributed organizational models and business models have sprung up on the Internet, such as Decentralized Autonomous Organizations (DAOs), distributed free markets , distributed microblog, distributed instant messaging, distributed supercomputer, distributed storage, distributed digital asset exchange, etc.
Generally speaking, every centralized Internet application has its corresponding distributed application. Distributed applications bring not only technical updates, but also the improvement of user experience, privacy protection and business model innovation.
Decentralized Application (Decentralized Application) is generally referred to as Dapp. One of the core technologies of Dapp is blockchain. Other core technologies include: distributed hash table (such as Distributed Hash Table, DHT), distributed file system (such as InterPlanetary File System, IPFS), distributed database (such as Interplanetary Database) , IPDB), etc. These core technologies all run on the P2P network.
Summarize
Blockchain is the product of two major social trends, digitization and peer-to-peer networks. These two social trends will continue to profoundly change the society we live in, the organizational structure of society, business models, and ourselves will be deeply affected by them.
The stable operation and large-scale application of the Bitcoin network in the past 9 years has fully proved the huge potential of blockchain technology, and a large number of blockchain applications will appear to replace or supplement existing centralized applications.
In addition, we believe that blockchain technology is in its infancy, and there are still a lot of problems to be solved, such as identity issues, efficiency issues, governance issues, etc. The maturity and large-scale commercial use of blockchain technology still needs to wait for a few more years. year time.
Recently, the U.S. Congress held a hearing on virtual currencies, ICOs, and blockchain technology. During the hearing, J. Christopher Giancarlo, Chairman of the U.S. Commodity Futures Commission (CFTC), made a good footnote to this article, saying:
"The global financial market is entering a new digital age. Just like we have seen with the development of the Internet, we cannot put the elves of technology back into the magic bottle. Virtual currencies mark a paradigm shift. ), it will affect how we think about payment processes, financial processes, and how we participate in the economy. Ignoring the development of virtual currencies will not make them disappear, nor is it a responsible regulatory attitude. The evolution of these virtual assets , their volatility, and the heightened interest in them by millennials around the world call for a serious look at virtual currencies.”
About the author: Cao Yanming, architect, worked in Microsoft, SAP, HCL and other companies , developed database, content management, e-commerce and other software, and participated in the implementation of many large-scale IT projects. Now working in a financial technology company, focusing on the research and development and application of blockchain technology.
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