Wanxiang Blockchain Xiao Feng: Digital cities may eventually be built on blockchain

Is it possible to use blockchain and other digital technologies to build a platform for cities like Internet companies build network platforms?

On June 22, “2021 Suzhou High-tech Zone Blockchain Industry Development Summit and Launching Ceremony of Wanxiang Blockchain Suzhou Research Institute” was held in Suzhou High-tech Zone Shishan International Conference Center. Xiao Feng, Chairman and General Manager of Wanxiang Blockchain, delivered a speech entitled “From Network Platform to City Platform – Alternative Thinking of City Digitization” at the event.

The following is the full text of the speech compiled from the on-site stenography, with slight deletions.

Wanxiang Blockchain Xiao Feng: Digital cities may eventually be built on blockchain

Xiao Feng, Chairman and General Manager of Wanxiang Blockchain

Dear guests, I am glad to have the opportunity to share my new thinking with you here. We have seen that many Internet companies have built a boundless network platform with a series of digital technologies, so much so that the world is now starting to discuss whether we should divide these platforms by anti-monopoly means because they have too much power.

Sometimes we wonder if a city can also use a range of digital technologies to build a city’s platform in the same way that Internet companies build their network platforms. That’s the question I want to explore today.

One of the themes of today’s conference is digital transformation. First, I would like to review the formation of digital technology and the changes in business models brought about by digital technology. Over the past 100 years, digital technology has gone through three stages of development.

The first is the end of the 19th century, the invention of telegraph and telephone brought great changes to the business model, we call this period the explosion of communication technology. The second is the explosion of information technology and computers, the Internet and other information processing technologies in the middle of the last century. The third is the beginning of the 21st century, cloud computing, big data, AI, blockchain and other digital technologies have entered a period of concentrated explosion. This is the process of technology iteration and renewal in the past 100 years.

The iteration of technology has brought about the iteration of business. In the electrification era, there were many representative enterprises based on communication technology, such as GM, Ford, AT&T, and with the explosion and maturity of information technology in the middle and end of the last century, a number of new enterprises emerged, such as Microsoft, Intel, and IBM, which had done well in the electrification era. A book called “Who Says Elephants Can’t Dance” details the process of IBM’s transformation from a leading company in the electrification era to a leading company in the information era. At the beginning of this century, with the maturity and explosion of digital technologies such as cloud computing, AI, blockchain, and big data, companies based on digital technologies such as Google and Facebook have emerged.

If we summarize the characteristics of these digital technologies, we will find that this series of digital technology is extremely disruptive.

First, digital technology has completely broken the limits of physical space, in digital space, it is difficult to identify its country, region or time and other attributes.

Second, once the restriction of physical space is broken, cross-border circulation can be carried out without any obstacles, such as an email can be sent freely to any place abroad or even on the earth.

Third, the higher the degree of digitization, the lower the marginal cost of economic activities will be, even down to zero. In the past, if one person listened to a song on CD, a CD was made, and if 10,000 people listened to it, 10,000 CDs were made, but in the digital era, everyone listens to music through digital software like QQ or NetEase Music, so the marginal cost of 10,000 people listening to a song is almost zero for the platform side.

Fourth, digital technology has not only overturned the concept of space and time, but also reconstructed the laws of the economy, pushing business organizations towards open source, openness, sharing and commonality. Blockchain will enable communities to become more diverse in the way they operate, and the organization and operation of future economic or commercial activities do not necessarily need to be organized in such a way as a company.

Fifth, data has never before become the new driving force of business and economic development. It is said that data is the oil of the new era, and the whole economy and business is driven by data.

Sixth, the company’s employment relationship has changed dramatically. The relationship between employees and companies, the relationship between company management and employees, and the way the economy is organized have all changed dramatically, and a sharing economy has emerged. The most important feature of the sharing economy is that it is a usage-based economy rather than an ownership-based one. New economic models such as the outsourcing economy and the odd-labor economy are becoming more and more popular around the world, especially since last year, when it became more common to contribute the value of one’s labor and receive rewards by sharing outsourced odd jobs in the wake of the epidemic.

According to news reports, it has taken until this month since the outbreak for many large companies on New York’s Wall Street to start asking their own employees to come back to work in their offices. Previously most Wall Street firms could not or did not require their employees to come back to work in their regular offices. So that brought about the seventh change, that the office no longer needed a physical location and that everyone could work on the cloud, online, or online. Prompted by the epidemic, this type of office will become more and more common and permanent.

Finally, the eighth point is that digital technology has made what was once a non-tradable good into a tradable good. For example, the advent of the Internet allowed an English teacher living in New Jersey to teach a Chinese child English online. Jobs like teachers were not tradable goods, people had to go to school to get an education. In the future, as virtual reality and augmented reality technologies further mature, more non-tradable goods will become tradable.

For example, we can let our friends in Shanghai enjoy the beautiful scenery by Taihu Lake in Suzhou through AR and VR headsets or glasses. Now the winning team of the Champions League game may be worth about one billion dollars, but in the digital era, it may be worth ten billion dollars. Because through AR, VR and other technologies, viewers can sit in their own living rooms as if they were at the game, and there is no difference between watching the game in person.

Digital technology has restructured space, business, economic laws, and office practices, bringing a series of disruptive changes. The transformation and migration of digitalization I summarize as three levels.

The first level is called digital twin, which means we digitize something in the physical world, real space, and map it into a digital body, but it has a prototype inside the physical world.

The second level is called digital native. Digital native is a digital universe that we reconstruct in parallel to the physical world, and everything in the digital universe does not have a prototype in the physical world. Digital native technology is becoming more and more mature, and more and more cases are happening.

Thirdly, the real world and the virtual world, the digital twin and the digital native will have a lot of interactions with each other, bringing economic and business model innovation.

Finally, I will conclude with digital transformation and digital migration. There has been a lot of discussion about this, but there is one point that I think has not been discussed enough. The biggest and most core value that digitalization brings to us may be that it helps human society expand a new space.

What are the more valuable things we can do in the process of digitization of cities?

First, we can build a digital twin of the city that breaks down physical space limitations. For example, when talking about Suzhou, we are referring to a geographical location, a physical space. If we reconstruct a digital Suzhou in the digital universe, this digital Suzhou is not limited by physical and geographical space, and what can be done in the digital Suzhou is not limited by physical and geographical space, thus bringing us more room for imagination.

Secondly, the digital twin-based digital residents can break the limitation of the so-called city residents. We can establish a global digital entrepreneurship program in Digital Suzhou to gather global talents and build a global community of entrepreneurs in the cloud, online and on-line through the new features of digital technology I mentioned. Global entrepreneurs from Finland, Norway, the United States, etc. do not need to come to Suzhou in person, but build a system of digital entrepreneurs through a set of digital methods to contribute to the development of Suzhou’s digital economy. On this basis, the management and services provided by the government for the digital economy, digital Suzhou, and digital entrepreneurs can also break the administrative jurisdictional restrictions and provide digital services online and on-line.

I believe that in time a second, third, fourth or even fifth GDP system as big as the current Suzhou will be created, and a second, third, fourth or fifth third space like Starbucks will be created. Can Suzhou envisage using digital technology to create a second space, a third space, or a second Suzhou, a third Suzhou, or a fourth Suzhou to accommodate a larger economic volume, a larger economic activity?

I think this is a question worth exploring. We can learn from the model of Internet companies that get a very large network effect by building their own network platform, and imagine how to help a city build an urban platform through a set of digital technologies, so as to get a larger ecological effect than the network effect.

Cities are inherently ecological. An article has been written on why cities generally have a much longer lifespan than businesses. One of the reasons is that a city is an open ecosystem, unlike a business which is a closed system. The life span of an open ecosystem is much longer.

This is not to say, of course, that cities don’t rise and fall. There is an article in the New York Times with an interesting title: “From Kaifeng to New York”. What does this title mean? 1000 years ago Kaifeng was the center of the world, with a population of more than 1 million people, and people from all over the world came to Kaifeng. It was also the capital of the Northern Song Dynasty, and commerce was booming. Today, more than a thousand years later, New York is the center of the world, with people from all over the world doing business in New York.

This shows that there is a change of cities. We need to seize many opportunities as cities rise and fall and change.

A city may have previously been a center, a hub, and developed into a thriving city because of developed transportation conditions such as river transportation. But in the digital era, we may really need to reconsider: will a city continue to rely on its hub location for the next 100 years, live with the water like in ancient times or will it need to rely on digitalization in order to get development?

Blockchain technology is actually the cornerstone of digital technology, the steel and cement of the whole digital technology. Whether it is a digital city or a digital enterprise or a digital business, it may eventually need to be built on the blockchain. Blockchain + IoT can create a credible digital base. How to ensure the trustworthiness of data is a big problem. It may be feasible to use a centralized set of methods to ensure the credibility of data, but this approach may be expensive and commercially unfeasible.

We have talked a lot about blockchain + industrial Internet today, which enables enterprises to be truly networked and interconnected, while allowing their data to be interoperable while privacy is protected. Smart contracts, sharing economy and odd-labor economy on blockchain can help enterprises achieve efficient and low-cost operation. Based on the economic incentives of blockchain, business can construct a self-organized, open, ecological, distributed, and dynamic economy. Blockchain’s distributed ledger also makes asset digitization and digital assetization commercially viable, providing a good foundation for blockchain-based digital identity and digital cities that break the limits of time and space. At the same time, blockchain + AI can also make city governance very intelligent.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/wanxiang-blockchain-xiao-feng-digital-cities-may-eventually-be-built-on-blockchain/
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