Xiong Wei: Compared with public blockchain, licensed blockchain is a more practical and useful design method of licensed data sharing system, and it is the key feature or factor of many financial applications in the future. Although decentralization is an extremely important and useful feature in the discussion of digital economy, it may not be the most promising field in the future. I think the more urgent problem at present is the enjoyment of data. How to design a data sharing system to let different participants, companies and other wider people use data. This work is very important. I think the way of authorizing blockchain or authorizing distributed account books is more promising, and it is more likely to realize a data sharing system that provides authorization to a large number of users.
Moderator: We know that the original purpose of blockchain architecture is to realize Bitcoin. Bitcoin was born about 1 1 years ago and has financial functions. But now, bitcoin is controversial. At present, blockchain financial applications include CBDC, JPM coins, Libra and many other applications. How to treat the application of blockchain in the financial field? What are the potential and challenges in theory and application?
Xiong Wei: Blockchain Financial Application Triggered by Bitcoin. Bitcoin has indeed triggered a wave of innovative design of digital payment systems, digital currency, financing schemes and various digital platform operating modes. Let me talk about my main points first. I think that although industry experts have made a lot of progress in these very important fields and people are enthusiastic about these technologies, I think the most promising model in the near future is not the bitcoin model, and I think other improved models are more likely to develop more applications in finance and other related fields.
Among them, I want to emphasize the authorization of blockchain. Compared with public blockchain, licensing blockchain is a more practical and useful design method of licensing data sharing system, and it is a key feature or factor of many financial applications in the future. You mentioned various emerging financial applications of blockchain, such as Libra on Facebook and JPMorgan Chase currency in JPMorgan Chase, and we also saw new encryption platforms. In fact, thousands of encryption points and tokens have been listed in recent years. These are all related to the bitcoin fever.
In particular, the decentralization and invariance of Bitcoin are very popular. People are excited about these functions, and these functions have also triggered the promotion of many new platforms and digital payment system designs. However, there are also many problems in practical application. Marcus skillfully summed up these problems as "ternary dilemma". The design of Bitcoin has to face this fundamental problem, which is scalability, security and decentralization. These are three questions, and there are some internal conflicts between them. I think, at present, we haven't found a solution to this ternary dilemma. This problem has not been solved, so the design will face many problems when it is widely used.
I saw that Zhou Xiaochuan, the former governor of the People's Bank of China, recently delivered a speech on the work of the People's Bank of China in designing digital currency. The People's Bank of China, known as the most advanced central bank in the world, is considering issuing digital currency in the future. Zhou Xiaochuan believes that it is precisely for these reasons that the digital currency of the People's Bank of China is unlikely to be built on the public blockchain. He also expressed concern about these problems. Decentralization means a lot of calculation, which may lead to a lot of waste, just like Markus said. This also leads to the speed problem. Speed is the key to the wide use of a currency in big countries.
He also mentioned that in practical situations, invariance may not be achieved. Everyone makes mistakes. Think about the "fat finger" problem in the financial market, which has appeared many times in China. When these problems happen, we really need someone who can correct the mistakes in trading information when they happen. However, the current blockchain based on decentralization will make the cost of correcting errors (even simple errors) extremely high. To emphasize a personal research work, Michael Sorkin and I recently co-authored a paper on encrypting monetary model. The paper emphasizes another potential problem brought by decentralization, that is, decentralization means that the ownership of digital platforms has no shareholders or "owners".
No owner means that no one will contribute to the public interest. We know that digital platforms rely on large-scale networks to flourish, so we need to attract a large number of users to use payment systems or digital platforms. To realize a large-scale network, someone needs to contribute to encourage participation. Without owners, no one will contribute to these public interests. This may lead to another potential conflict between digital platform and payment system in practical application, which will hinder its future development. We especially emphasize that the decentralization of "token-based planning" brings this trade-off.
Through decentralization, the token-based platform can promise not to harm users under any circumstances. We know that for the profit-seeking platform based on shareholders' holding of shares, if it is poorly managed and has poor profits, the platform may take drastic measures, such as aggressive advertising strategies, sales strategies, and even selling user data to third parties. These situations have happened many times. We've seen these situations. Decentralization removes shareholders, thus removing the motivation for the platform to exploit users. All users * * * control this authentication platform, and users will not damage their rights. This is the advantage of the universal authentication platform.
The disadvantage is what I call public interest. A platform or payment system needs to build a huge user base in order to grow and develop. Decentralized users are facing this huge problem, that is, no one is willing to contribute to the interests of the public and attract users, so as to maximize the network effect. For platforms with relatively weak profitability, this concern about the abuse of user information is particularly strong. Our analysis will find that generalization is actually more attractive to platforms with weak foundations. Enthusiasts of bitcoin or other encrypted tokens generally don't say that. But I think it may be.
In addition, I want to emphasize the difference between stock price and token price. Symbolic prices are usually very unstable. We have seen that thousands of tokens or cryptocurrencies are traded around the world, many of which are extremely unstable. We often attribute this high volatility to some crazy speculation or some price bubbles, but they are conceptually different. The stock price is driven by the profits obtained by the stock platform from ordinary users. For large-scale networks, some users are heavy users and some users are light users. Profits are driven by ordinary users, which will ultimately determine the stock price.
But for the authentication platform, the price of tokens is determined by marginal users, who don't care whether they use tokens or not. In this sense, token prices are driven by marginal users, not ordinary users. Under the network effect, we know that there is a big difference between ordinary users and marginal users. Edge users are very sensitive. When the situation changes, they can easily quit. Because of this, the token price fluctuates greatly, which is greater than the usual stock price fluctuation. I think this is an important issue worthy of discussion and consideration. These digital tokens or encrypted tokens are traded all over the world.
I talked about the conceptual problems related to generalization and decentralization. Based on the above reasons, I want to emphasize that decentralization is an extremely important and useful feature in the discussion of digital economy, but it may not be the most promising field in the future. I think the more urgent problem at present is the enjoyment of data. How to design a data sharing system to let different participants, companies and other wider people use data. This work is very important. I think the way of authorizing blockchain or authorizing distributed account books is more promising, and it is more likely to realize a data sharing system that provides authorization to a large number of users.
The system can be a data sharing system with specific rights, which establishes rights for licensed objects and acquired content to ensure data distribution and informed transactions in the system. The contract is based on a licensed data sharing system.