Macro-Finance Salon (No. 63) and Fintech Open Classes (No. 4): The Future of Block Chain and Financial Industry
2017-05-15 IMI
Mr. Deng first introduced the characteristics of Bitcoins starting from the recent incidents of worms. He pointed out that Bitcoins were designed to digitally control the total amount of money and to establish a cross-border, completely anonymous, anti-regulatory global trading system. Bitcoins solve the distribution problem through the mining mechanism, but because Bitcoins are not linked with any asset, there is the problem of currency instability. In addition, Bitcoins still have some other problems such as slow transaction and trading amount far less than speculation amount. Next, he expounded the relations among Bitcoins, digital currency and block chain, clarifying general misunderstandings in terms of concept. He explained the three main features of block chain: distributed books, distributed keys and distributed consensus. He compared these three points with centralized databases, traditional passwords and other consensus mechanisms respectively, showing the advantages of the block chain technology.
Mr. Deng focused on the interpretation of the trusted block chains and their applications. He pointed out that the most important purpose of the trusted block chain is to make the block chain applicable to daily transactions, so in terms of the credibility of property registration, trusted identity authentication and trusted network nodes, the block chain has been improved. Trusted block chains will play a role in the five areas of digital banking, securities issuance and trading, bill and supply chain finance, cross-border payment and settlement, and customer credit and anti-fraud programs. He took the National Fintech Data Center in Ganzhou as an example, which is pilot program of Taiyi Cloud and Xinhua.com, and described the business models and scenarios of trusted block chains. The block chain can help to achieve the standardization of assets and risk control, thereby reducing the cost of investigation and other links, and improving information transparency and sharing. Intelligent electronic contract and other forms can also help to realize automatic transactions, accelerate asset transactions and circulation, and thus improving the efficiency of financial activities.
In the commercialization of block chain technology, he pointed out that the large-scale commercialization of block chain technology is faced with many problems that must be solved, such as personal information security, supervision difficulties and slow transfer. At present, there are many problems in the business model design of the block chain, but ICO (Initial Coin Offering) have appeared to support the industrial development, and the scale is considerable, which indicates that the black chain industry has become a self-driven, self-circulating economic entity. He stressed that when the future of ICO is not clear yet, relevant departments should control and standardize the ICO as soon as possible, develop regulations, prevent conflicts between regulators and traders, and encourage real application of block chain technology.
In the Q & A session, Mr. Deng answered questions about the impact of Bitcoin ETF, the future of Litecoin, the relationship between ETH and ETC, the impact of the central bank's digital currency on the existing digital currency, the threat posed by Bitcoin platforms, opinions on the Fintech Committee established by the central bank, the government’s regulation on block chain companies and the gap between China and the other countries on block chain application.
