Why is the blockchain only successful in the field of digital finance?

——Speech at CCF YOCSEF Zhengzhou “Where is the main battlefield for the future application of blockchain technology?”

1. Blockchain is hardly successful in the field of digital finance

From a financial perspective, the development of blockchain in the field of digital finance can hardly be said to be successful. For example, the digital renminbi system basically does not use blockchain. Blockchain originated from Bitcoin , but Bitcoin itself is not currency, let alone finance. Blockchain does have many innovations in the field of digital finance, including DEFI, which was developed last year. However, the current blockchain digital finance also has obvious shortcomings. For example, the concept of credit in traditional finance is currently difficult to develop in the blockchain field. This is of course directly related to the anonymity system of the public chain. From the perspective of the relationship between finance and the real economy, at present, blockchain finance, including DEFI, is still the self-healing behavior of the currency circle, and has no connection with the real economy.

The current development of blockchain in the field of digital finance is not only the success of the application of IT technology, but also that this new type of financial application circumvents the various regulations faced by traditional finance and has always brought various institutional dividends. If traditional finance adopts more IT technology, implements 7*24 operation, and can also circumvent various existing financial regulations, will it also achieve corresponding success in terms of efficiency and user-friendliness? In addition, is it possible for smart contracts and DEFI to develop in the traditional centralized financial system? These are topics that need to be further studied. If the above aspects can be developed in the traditional financial system, these changes will surely bring about extremely extensive and profound changes to traditional finance.

2. Why has the blockchain not succeeded in other fields?

Blockchain has the characteristics of decentralization at the technical level, so in the application, the business level will inevitably bring a certain degree of decentralization. The matching of business-level requirements and technical-level supply can make the application of blockchain more successful. However, the decentralization of the organizational structure of the system at the business level must be accompanied by the adjustment of corresponding external structural forces. The emergence of centralized organizations conformed to the level of technological development and productivity development at the time, and did not arise out of thin air. Similar to the two different management methods of democracy and authoritarianism, they are also supported by profound historical, political, economic, and cultural factors as structural forces. If there is no fundamental structural change in the external forces of the traditional centralized organization, it is impossible to change the organizational management structure of the entire system through a technical means alone, let alone realize business process reconstruction and production relationship transformation .

3. Digital transformation is a revolutionary exogenous force of decentralized change

Large-scale and all-round digital migration and the realization of digital twins have enabled large-scale industrial production based on insufficient data and information asymmetry to be transformed into more fine-grained customized production. The production method will also be changed from the traditional Driven by instructions, change is driven by data and efficiency. Therefore, it is necessary to collect and process more decentralized knowledge and form more effective connections of data content, so that on the basis of reliable data connection, the distributed self-organization of larger scale business units within larger specifications can be realized. To meet more personalized business needs. This is a revolutionary exogenous force transforming from a centralized institution to a decentralized institution. In this change, the blockchain can not only ensure the reliability of the data source and the credibility of the data connection, and achieve the effective sharing of data within a certain range, but also can effectively connect the different technical elements, which is the business level. Decentralized business self-organization provides technical support and support capabilities. This is the revolutionary force of change that will be produced by the new production lifestyle in the future—distributed large-scale dynamic self-organization. Changes in this area will make the application of blockchain in the upcoming revolutionary changes not only more extensive, but also more necessary.

Author: Gao Chengshi, PhD in cryptography, blockchain expert, communications member of the Blockchain Professional Committee of China Computer Society.

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