CITIC Bank Information Technology Management Department Chen Zhiming: enterprise block chain technology platform selection and Practice

CITIC Bank Information Technology Management Department Chen Zhiming: enterprise block chain technology platform selection and Practice

In recent years, the block chain by capital markets and financial institutions, especially the wide attention of the commercial bank, PWC data show that more than 20 countries have invested blockchain technology research and development, there are 80% banks in 2017 will begin to implement the project related chain. Block chain is leading the development of the financial industry, it is the underlying technology of a peer-to-peer distributed books, is to the center, the high degree of trust, traceability, strong autonomous degree higher characteristic. The domestic and foreign commercial banks to actively embrace the blockchain technology, promote the rapid implementation of business application scenarios, reduce transaction costs, improve the efficiency of resource allocation, promote information sharing. At present, domestic and foreign commercial banks in the digital currency, payment and settlement, trade finance, supply chain finance and other areas to carry out a series of research and application exploration.

With the characteristics of the connotation of technology chain block

Block chain concept first proposed by Nakamoto in the “Bitcoin:APeer-to-PeerElectronicCashSystem”, at present there is no unified definition. Broadly speaking, block chain technology is used to verify and store data, using the distributed consensus algorithm to generate and update data, by using cryptographic methods to ensure data security, the use of smart contracts to a new computing paradigm of distributed architecture and [3] programming and operation data based on block data structure chain. Block chain can let people in the no center node, through mutual cooperation to build trust and reduce fraud; improve the transparency and efficiency of transactions, reduce transaction costs, promote multi security transaction; BPR and organization mode of operation.

Block chain is essentially a distributed database to the center of the center, compared with the traditional system, a decentralized, distributed, to trust, falsification, anonymity and openness of the 6 major characteristics, including to the center and to trust is the core feature of block chain technology. Go to the center of the use of distributed data storage and accounting records, not the center of the hardware or management mechanism, rights and obligations of any node are equal to the damage of any node will not affect the operation of the whole system. To trust is refers to between the nodes involved in the whole system can automatically exchange data safely in the trust environment, the operation of the whole system of rules, the data content is open and transparent, without human intervention, the system rules specified range and time range, nodes cannot deceive other nodes.

According to the degree of opening links, the block chain is divided into three types: public, private, chain chain chain alliance. Which belongs to the semi open chain alliance, has the characteristics of safety and innovation more balanced, is considered to be a block chain application mode at present the most potential.

The main chain alliance technology platform and development trend

Fundamentally, block chain is a distributed system, different nodes in the premise to ensure the data consistency under the full amount of data storage, so that all nodes trust the authenticity of the data, so as to construct a set of decentralized reliable data exchange platform.

Block chain technology has two key points, the first point is how to store the data, the current architecture block chain technology most of the nodes using the full amount of data storage in verification mode, this brings great scalability problem, the main solution of sharding and statechannels in two directions.

The main idea of statechannels is the most direct transaction 22, block chain only as a final means of dispute arbitration, it only solves the time stamp problem, does not solve the problem of creating trust, if the two node collusion fraud, is hard to find. The Sharding problem is proposed to solve the storage problem using the Merkle tree, but now I have not seen the whole compelling solution.

The second point is how to form in a distributed environment, the consistency of the data, the so-called consensus algorithm, PoW and PoS are mainly mainstream consensus algorithms at present (including DPoS and Casper, and the latest variant) PBFT method proposed by AlgoRand et al, the following one by one of us.

Node PoW are asked to participate in the accounting calculation to meet certain rules of the hash value, first calculate the node of the value of the obtained block right will block broadcast to other nodes. This way the downside is invalid occupies a large amount of computing resources, the efficiency of generating block is very low, but because of network delays, easy to form more bifurcation, reduce the performance of the whole system. This paper thinks that PoW is a consensus algorithm inefficient, not mature, can not meet the needs of practical application, but as the first consensus block chain technology algorithm, has great symbolic significance in technology.

PoS proof of interest according to each node for tokens and the proportion of the time, such as the proportion of the lower difficulty, thus speeding up the generation of random numbers for speed. It will PoW algorithm mining is the standard of success by “work” to “proof of interest”, according to the miners hold time and the number of electronic money (“old money” is obtained from multiplying) to determine the difficulty coefficient of Mining: currency higher age, the lower the coefficient of difficulty. When a miner mining success, after the creation of the current block node obtains the right corresponding electronic currency held by the miners’ time cleared, while the system of electronic money to a certain number of miners as a reward. The biggest defect of Pos is easy to be giants control, while generating a plurality of blocks the formation of bifurcation, although check mechanism, to put their tokens to a puppet, reduce the evil after penalties.

The Byzantine fault tolerant algorithm (ByzantineFaultTolerance) to take a vote to determine the accounting results node scheme, majority voting, good performance, mainly for the chain alliance. The two problem is a Byzantine algorithm can only be applied to join the chain alliance, trust node must have certain basis, can not prevent Sybil attacks (dummy nodes that control many without any contribution to attack, the equivalent of the network DDoS attack); two is scalability, because most of the Byzantine algorithm needs to go through Pre-prepare, Prepare and Commit in three steps, each step should be carried out a large number of broadcast communication nodes, so scalability is a problem.

In order to solve the PoW, PoS and Byzantine algorithm, Turing Award winner SilvioMicali AlgoRand proposed a new consensus mechanism, the main idea is to use zero knowledge proof randomly selected a subset of nodes generate block chain, then use the Byzantine consensus algorithm, each step in the Byzantine algorithm, through zero knowledge proof the election of a representative node, different vote, confirm the block generation, so that greatly reduces the number of nodes involved in consensus, improve the efficiency of consensus. AlgoRand is a kind of Pos algorithm, different nodes may have different weights, so as to improve the probability of being selected, to avoid Sybil attacks, this paper argues that the technical content and the application prospect of this algorithm is high, worthy of further study.

In the application of the scene, because the efficiency and limited storage space, the scope of application of personal level blockchain is mainly limited to digital money or tokens, the current national regulators halted trading promotion and ICO, this paper does not discuss the digital currency. The prospects for the blockchain in individual applications is still optimistic, in addition to digital currency function, if there is a distributed algorithm can break the data storage limit, individual nodes do not need to store the full amount of data, but each node stores only a small part of the data, and can quickly write, modify and search and the related data, will not produce a large quantity of concurrent conflict in the case of block chain technology will bring huge changes to the existing form of society, not only the data stored in the database of large enterprises, individuals can truly become masters of the formation of real data, to distributed data center system, and produce a utopian society technology the.

Well, before in the distributed storage algorithm magic is a computer scientist invented, the existing technology is the main function of block chain technology in enterprise applications will. At present, financial, transportation, medical and education institutions already realized digital agencies within stores a large amount of real data, but the data flow across agencies is often difficult, forming a series of data barriers, in addition to government agencies, no one organization can obtain more comprehensive data and information. Block chain technology is through the data barriers, the best means to achieve interoperability of information, which is the main application chain alliance.

This paper mainly introduces the Ethernet Ripple and hyperledger square, the three mainstream technology system, R3 Corda also belongs to the open source platform, the author thinks that the business capacity is greater than the technical ability, and the implied cost is too high, there is no in-depth exploration.

Ripple is a public chain system is mainly applied to the payment of the scene. Ripple has two important concepts, one is the launch of the Ripple XRP coin reboxetine currency, as the monetary base of the Ripple network, like bitcoin can circulate in the whole network, the main fuel is Gas, per transaction will consume some XRP; second is the introduction of the gateway (Gateway) system, which is similar to in the currency exchange mechanism, allow people to see the currency injection, out of the Ripple network, and can act as a debit and credit of the bridge. Ripple introduced a consensus mechanism RPCA, through a special node vote can be verified and validated to deal in a very short period of time, and higher TPS. Want to try for fast block chain enterprises, adding Ripple is not a simple and cost-effective solution, only need to deploy a server, contact the competitors, to carry out the payment transaction chain based on block.

The etheric Fang is a Turing complete virtual machine block chain development platform, it is the biggest characteristic of smart contracts, contracts with friendly interface and intelligent plus some extra small support, DApp application allows users to set up various contracts based on the myriads of changes. In essence, the contract is stored in the etheric state Fang in a kind of “virtual objects”, it is stored in the distributed space, and ordinary users can create internal transactions, and to operate other contracts. The current version 1 Ethernet operation is used in workshop consensus algorithm POW mining, the current public TPS is 25 pen, 1.5 version will use in the development of the POS algorithm, in order to confirm the rate of the block is greatly improved. The whole etheric Fang technology ecosystem is relatively strong, at the same time iteration cycle faster, so have a strong vitality. Because Ethernet is mainly used in the public square chain, have been repeatedly attacked, there have been some big holes, in addition to enterprise business applications, frequent iterative upgrade will bring greater maintenance costs.

HyperLedger is a can be inserted into various functional modules architecture block chain implementation. HyperLedge layered design is reasonable, the modular degree is very good, fabric is one of the most widely used items, should be the main choice of enterprise alliance of chain. HyperLedger architecture core logic three: Membership, Blockchain and Chaincode (smart contracts).

MembershipServices is a service used to manage node identity, privacy, confidentiality, audit

BlockchainServices using the P2P protocol based on HTTP/2 to manage the distributed books, provide the most effective hash algorithm to maintain the chain block data structure, in addition to a pluggable way according to the specific needs to set the consensus protocol, such as PBFT, PoW and PoS, IBM first PBFT algorithm.

Chaincodeservices will provide a safe and lightweight sandbox mode, perform intelligent contract logic in the node, the EVM virtual machine is similar to the etheric fang.

At present, fabric has grown from 0.6 upgrade to version 1, has undergone tremendous changes in the underlying technology, basically is a new project. The 1 version will block chain data maintenance and service consensus were separated completely separate from the Peer consensus service node, to provide independent consensus Orderer service node; at the same time based on the new architecture, implementation of multi channel (channel) structure, to achieve a more flexible business adaptability, such as business isolation and security. Support more configuration function and strategy management functions, to further enhance the system’s flexibility and adaptability, using kafaka as the message forwarding platform, distributed, publish / subscribe system based on message, greatly improve the system throughput, the extended node level online. But the current consensus mechanism is not yet mature, fault-tolerant performance have declined compared with the 0.6 version, the center of a certain degree of rise.

Block chain enterprise technology platform selection practice

For businesses, the block chain is a good innovation breakthrough. Compared with the other popular deep learning, the lower threshold, the data requirements are not high. The block chain has been in many areas of the tentative application in the financial industry, including digital currency, payment and settlement, trade finance, credit and fraud, syndicated loans, mortgage loans, project and contract management, bond issuance, micro credit, foreign exchange, precious metals trading, asset transfer etc..

Application of block chain has made breakthrough progress, but still faces many challenges.

1. ecological chain is not mature

The blockchain existing application range is limited, as the need for a multi-party collaborative sharing of distributed technology, the common development of norms and standards. Block chain technology is restricting the current laws and regulations, legal and regulatory system needs to be improved.

2. security challenges

Block chain technology security vulnerabilities, private security risks exist in block chain network, encryption algorithm requires the integration of stronger security alliance; chain has not yet been verified long time range; the new business model will also bring new security risks. From two aspects of business and technology combined with the exploration of security strategy and measures.

3. performance bottlenecks to be a breakthrough

System building block chain technology facing low capacity, storage space, excessive consumption of resources and other issues based on; and the efficiency of system depends on the network node in the node processing speed of the slowest; block chain technology integrated into the high cost of the existing financial system. Therefore, the current level of block chain technology is only suitable for low flow low frequency trading environment, and to deal with the financial scenarios of high concurrency, high efficiency, high flow. Although the optimization of block chain technology to a certain extent to enhance the speed of many new trading platform, there is a certain distance from the massive popularity of the application in the field of finance.

4. yet in complex business scenarios of large-scale application

With the participation of institutions gradually increase and landing project, some problems in the complex business scenarios block chain technology may be enlarged, important industry application validation support.

Therefore, the most important enterprises in the application of block chain is the choice of the scenes, the first is legal compliance, must comply with the national authorities and regulatory requirements. Secondly, there is a certain value to the business enterprise technology innovation and ultimately to produce benefits, of course, innovative technologies in the incubation period can relax in the input and output requirements, vigorously promote business development after the maturity of the technology, forming a virtuous circle. The third is to find like-minded partners to promote, because the private chain in the enterprise that is not much sense, public chain technology risk is too high, to find willing to try the “buddy” is very important. The fourth is to choose a stable, scalable, technology platform has great development prospects, a slight expansion under the instructions here.

The unit is built first based on the credit system of domestic credit chain blocks, this business is basically a A bank to open a letter of credit, through offline mail sent to B bank. B bank has received the letter, to do follow-up business. The mode of post efficiency is relatively low, there may be lost. Credit amount is generally large, once lost to the financing efficiency of enterprises will lead to a greater impact. Into the alliance chain through will participate in the party, to transmit information through the block chain, each other to information sharing and cross license, to ensure the timeliness and authenticity of the credit information.

In the technical direction, because there is no precedent for reference, we conducted a lot of research, the final choice of the fabric, at present this choice is correct, because this is an open platform and stability is relatively good, is also a great space for the expansion of the banking business, the two is the use of the platform more, most of the domestic chain alliance scene is based on the development of fabric, community activity is also higher.

The core block chain is to create trust in the trust environment. As mentioned “economic man of the block chain is trust machine”. Now why block chain technology may be used in the process is not as good as in many cases, because we are the block chain technology to our business model now firmly inside. Now many business model is mainly based on the idea to do the center of ideas, so the blockchain itself is “to the center” of the technology, you put it into the existing business model, it is difficult to play the vitality and its advantages, then we hope to find a new business model, the scene to use its generalization the vitality of this new technology.

The conclusion and Prospect

The development and application of a large number of institutions currently invested a lot of resources to jointly promote the blockchain technology. From the technical advantages, mechanism and mode of the advantage, innovation of enterprise application block chain technology is the trend irreversible, large-scale application of point the day and await for it. The future, combined with the development of the block chain and enterprise specific business, and can carry out the layout from three angles.

From the perspective of the digital economy, block chain technology represents the development direction of the digital economy, the development of flat block chain model represents the direction of social and economic to the intermediary, breaking the previous to various media centered transaction mode, national financial infrastructure will usher in a major change.

From the perspective of the development of the industry, innovation and application of enterprise blockchain technology, is a gradual, phased process. The bank will take more application block chain technology alliance development model, in the early application of block chain technology, cost and efficiency advantage is not obvious in the short term, continuous exploration and application of scene expansion block chain technology, rapid implementation of different business application scenarios of the pilot. In addition, the business operation and coordination is more dependent on both the internal and external environment the ability to integrate resources, using the block chain business system with high efficiency and low cost, will help establish a good business ecosystem.

From the perspective of enterprise strategy, in the coming tide block chain innovation, many banks pay close attention to at the same time, still will be cautious, do not blindly, not passive, at first to verify the development of small-scale and large-scale investment need to be cautious to use on-line. The block chain technology brings innovation clues, most banks will choose the business innovation logic based on big data development; based on upgrading of Internet financial strategy, will strengthen the business model innovation to block chain oriented application.

Block chain has not yet fully mature technology, the blockchain future want to be successful, open, open, sharing, equality of these points is very important, this is a complete ecosystem or a new ecosystem, we need to go into, go to the building.

Leave a Reply

Your email address will not be published. Required fields are marked *