Economist: block chain will subvert the credit industry?


nnnWe have seen a lot about the block chain of the introduction of the role of the technology some general understanding. This article is the interpretation of the chain of chains by the Economist, which details how the data and information will be analyzed by the block chain, but also points out its possible drawbacks and analyzes why this phenomenon causes people The worry.n
nnTranslated by: Inan
nItalian writer Umberto Eco once said, “We like to list the list because we do not want to die.” If there is no list of people and things, most large organizations will collapse.n
nFrom simple memos to complex databases, these are lists, but they all have a major drawback that people must trust the list of managers. The manager has power. They can modify the company account, delete ownership on the land registration form, or add a name to the party list. In order to prevent managers from making bad things and to seize them when such a situation occurs, society depends on various tools, from audit to board of supervisors. List managers and supervisors together form one of the world’s largest but least noticed industries, the credit industry.n
nImagine a world in which the list is declared independent and capable of self-maintenance. This is the “block chain” in the broad sense of the commitment. Block chains are systems that support digital currency bitmaps, similar to “distributed books”. If the block chain to take over the business – its supporters that will be so, then the credit industry to migrate to the ether will have what effect?n
nThis is not the first time the list has changed the form in writing. More than 500 years ago, there was a new accounting technique in northern Italy, which was later called double bookkeeping. This is an important step for modern companies and economic development. Werner Sombart was a German sociologist who died in 1941, arguing that double bookkeeping marked the birth of capitalism. It allows people other than the business owner to track their financial situation.n
nIf the double bookkeeping will account for the liberation of the mind from the merchant’s mind, then the block chain will be liberated from the constraints of the organization out. Perhaps the maker of Bitcoin did not take this into account when he worked hard for the technology. According to his white paper published in 2008, his goal was to invent a “purely point-to-point version of e-cash.” To this end, he created a new database, that is, block chain. It can prove who has something at some point. It contains the payment history of each bitcoin in circulation; theoretically, once the transaction is registered, high-intensity encryption makes it unusable; the copy will propagate between the computers or “nodes” that make up the Bitcoin network, So that anyone can check if there is a problem. A complex encryption process that replaces the inventory manager, the “consensus mechanism”, transforms the block chain into a separate entity.n
nSmart people soon find that such settings can also be used for things other than money. There are many different types of self-sufficient block chains. One of the most prominent is the ether square. Like Bitcoin, it has its own encrypted currency, called “Taitong”, but it also allows the user to add “smart contract”, which is a code that contains the terms of the business agreement and is automatically executed.n
nWhen Luca Pacioli wrote the first book on duplex bookkeeping at the end of the 15th century, he could not predict what would happen to accounting techniques. But today many start-ups seem to think that block chains can change the world.n
nFor example, Everledger can track valuable assets. The company has registered ID for more than one million diamonds, making it easier for people to see if gems are stolen or mined in the theater.n
nOther companies want to track people. One of the first things to do for a baby may be to register the newborn in the chain chain, which is equivalent to the encrypted version of the birth certificate. It sounds like the scenes that appear in Orwell’s novels, but that’s not the case. On the contrary, if people’s identity is linked to one or several block chains, they will have more control over their identity and personal data. For example, if a tenant wants to prove to the owner that his income is sufficient to cover the rent, he only needs to tell him this part of the information, rather than as the current to their own credit records displayed.n
nIn the chain-chain world, having such an “autonomous identity” may also be a basic human right. Having such a “autonomy” of the world may be a basic human right. Anarchist entrepreneur Moxie Marlinspike et al. Have called for the abolition of the “status slavery” imposed by the existing national registration system. Some start-up companies, including Evernym, Jolocom and uPort, are planning to launch services that allow people to register identity.n
nKevin Werbach of the Wharton School of the University of Pennsylvania says that once people are able to manage their identity, other possibilities will arise. People will be able to unite in virtual countries and develop their own rules. Now there has been such an organization, that is, BITNATION. Anyone can admit that their constitution becomes its citizen. In BITNATION business, such as trading on its platform, people must build a reputation.n
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nChain reactionn
nThis book also has a function: they can serve as a source of truth. Various information can be added to the block chain. Take the car to make an analogy, this information includes where it is produced, maintenance records and even where to drive. The data will form a “truth” about the car.n
nMany people have been studying “truth services”. The researchers proposed to create a unique encryption identifier or “hash” in the experiment and register it on the block chain so that it can not be changed. Georgia, Sweden and Ukraine are testing the technology to digitize some of its land registration records. While Delaware – where companies from around the world are stepping up their efforts to use the chain chain to store company records.n
nTransactions on the chain chain can also be entered as smart contracts. Another startup, Slock.it, is developing a physical lock that exists in digital form on the block chain. When it receives the currency, the smart lease contract can be unlocked. This can achieve a new way of sharing. If someone wants to rent a car, then he can simply fight the smart contract and then drive away.n
nCompared with other features of the chain chain, smart contracts can change the economy more. They can take over most of the day-to-day business processes. Some companies may be made up of a set of smart contracts that have become real virtual companies that exist only on the chain. However, the first attempt to create such a “decentralized self-governing organization” has tragically ended. This organization is called “DAO”, a year ago as a virtual venture capital fund was established. It raised more than 160 million US dollars of funds, but then was hackers stole 60 million US dollars, leading to its destruction.n
nBut the simple version of this structure, the first token issue (ICO), has yielded some results and created the first bubble of the chain economy. In this automation, the start-up company will create an intelligent contract in the etherfront and publish a “white paper” or prospectus. Then, the investor can send the coin to the smart contract and automatically create a “token” that can trade like a stock. At present, ICO has received more than 550 million US dollars of investment.n
nHowever, some of these projects are scams, and many honest projects make outsiders do not understand. EcoBit aims to build a carbon credit market. Aragon wants to use block-chain tools to manage the entire organization and build a decentralized arbitral tribunal. SONM wants to create a “de-centric fog calculation supercomputer”: users can use the tokens of the project to buy computing power, or by adding their machines to the pool.n
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nWill the core company use the technology?n
nAlbert Wenger of venture capital firm Union Square Ventures (USV) said that these efforts have made people see the possibility. He believes that such a central organization in the future may subvert the technology giant. He believes that the core of these technology giants is a huge central database, tracking products and purchase history records (Amazon), users and their friends (Facebook) and web content and past search queries (Google). “Their value stems from the fact that they control the entire database and decide who can see which parts at a certain point in time,” he said.n
nUSV has invested some way of going to the center, such as the e-commerce market OpenBazaar. Users do not have to visit the site, just download a program, the user wants to buy and sell goods and services directly linked to other people. Some people have already started building blocks based on chain chains, paying for users who publish content. Steemit is a blog site that allows authors to earn tokens. Synereo allows users to pay a fee to a personal content provider.n
nIn a world run by the chain chain, the centrification can also be further promoted and the inclusion of the matter. Once the items have their own identity and can be controlled by the block chain, they may have some degree of autonomy. Mike Hearn, who was a developer of Bitcoin, now works at the Chain Chain Alliance R3, who presented the idea of ​​an unmanned car a few years ago, which is economically autonomous. They are guided by smart contracts, which can be part of the amount of money earned by manned for maintenance or replacement. When few people ride or owners move to another city, they enter the long-term parking mode. They can release their own tokens to raise funds, so that owners get some profits.n
nIf something is to control their own destiny, what can the government and the state do? In fact, there are many to do. Despite the fact that people have a completely decentralized dream of liberalism, in many cases it is still necessary to ensure that the information on these blocks is true. For example, in China, regulators are involved in a pilot project conducted by IBM and Wal-Mart, which makes retailers’ supply networks more transparent by tracking the sources of pork and organic food.n
nIn some areas, the chain chain may even make the government work more easily. Last year, Dubai announced that it is hoped that all government documents can be stored in the chain chain by 2020, which is a prerequisite for complete paperless government agencies. This technology can also serve as a cheap platform to create a more efficient government and trust in the contract, which is the most lacking in poor countries. Some people hope that the chain chain can help the United Nations track all its projects, achieve transparency and reduce waste, so that the organization can play a better role.n
nAnother surprising example is money. Although the block chain aims to replace the central bank, but these banks from the outset on this technology quite interested. When the bank shares the books, rather than keeping the information in a separate database, the regulator will be more likely to see the flow of funds. Several central banks are initially considering issuing their own encrypted currency: the Bank of Canada and the People’s Bank of China are conducting tests. If the digital tokens will replace cash, this will open up new possibilities for monetary policy. For example, in order to increase its demand for an economic crisis, if no tokens are used for a specified period of time, the token may lose some value.n
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nWarning: Future block chainn
nThis technology is still unable to support so many applications. This book may not seem as immutable as it seems, and the block chain has not yet been shown to be fully scalable (the bitcover system handles seven transactions per second, while the typical credit card network can handle thousands of pens per second) The But from the historical inspiration of digital technology, these obstacles will eventually be overcome.n
nMany block chain lovers have found that a bigger problem lies in institutional resistance. The company department is reluctant to give up control of the list, because it means the loss of power. In many cases, it is unclear how much value the block chain can add. Some centralized systems seem to have done well enough. At present, the traditional payment service looks more efficient than this decentralized approach.n
nThere are also obstacles in politics. Many block chain advocates of the technology faith is like religious fanaticism, the reason is that they believe that the block chain will be replaced by encryption code today’s chaos decision. But Bitcoin itself shows that even simple technical problems can evolve into endless struggles between potential winners and losers. Even after years of discussion, Bitcoin participants have not agreed on how to expand their system capacity.n
nThis is the biggest problem. Should the block chain control the world? A warning has been raised. If the distributed books really subvert the credit industry, then many administrative work will disappear, may be more than artificial intelligence to eliminate the work more. Some people claim that the block chain is a liberal plot. Others worry that the hardworking organization will collapse. Researchers in the European Parliament recently wrote: “Every time we use distributed books, we have to transfer power from the central office to the unequal peer-to-peer structure.” We are concerned that the block chain and the smart contract have advantages , But may be too “smart”, and will cause social rigidity or confusion.n
nWith the development of the centralization of the preservation of the list, it is clear that concerns about this trend are also increasing.n

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