In the first two sessions of Secret Ape Science and Technology Block Chain Class, we understand what block chains are and the development history of block chains. So what can block chains bring us? Xie Haojian, CEO of Mystery Ape Science and Technology, shared his understanding of the practical significance of block chain technology.Please note thatIn the articlePublic Licensing ChainThe idea was first proposed by Mystery Ape Technology in 2017.
Secret Ape Science and Technology Block Chain Lesson 3
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We use block chains to solve trust problems in the digital world
Human beings are a kind of social animals. Anthropologists have found that for human beings, the maximum number of natural communities is 150, which represents the number of intimate relationships that we can maintain in our daily life. Since ancient times, human beings have been trying various inventions and creations in order to break through this limitation through different tools and systems.
So we have a very great invention, the company.
Managing processes with machines
Within the company, we will formulate a variety of systems to motivate people, to maintain a group moving towards the same goal; between the company and the company, we will formulate a series of laws and regulations to ensure the smooth progress of business cooperation between the company and the company. Under the company system, there are many kinds of business processes, such as ordering, purchasing, manufacturing, delivery, invoicing, receipt and so on. They connect all the people in each link to ensure that they can effectively cooperate to complete a task in the established process.
But after the emergence of computers, the ability of computers is constantly increasing, while the ability of human beings is relatively unchanged. At this time, we began to think about whether computers should be applied to these processes and use them to manage processes.
This is contrary to our use of machines in factories. In factories, robots are workers and managers are people, but in process management, we try to use machines to manage people, which is what we describe as “process automation“. So today, we see a variety of information systems based on network and computer technology, such as ERP, business intelligence.
Based on such information systems, we can build more and more large companies, and those multinational companies are already common. But if we want to expand this automated process beyond the company’s borders, we will find a variety of problems. Companies and organizations are boundaries of trust and good collaboration within them, but once they are out of boundaries, we can’t believe that others in the process will be loyal to what they are supposed to do.
This is a question I often think about: can we make the process automation between enterprises, not just within enterprises, by means of technology? In the technological environment of the Internet, I had not found the answer until the emergence of ETF.
The Answer from Ether Square
Through the de-centralization technology, Etaifang constructed a shared database for us. On the basis of this shared database, we constructed a shared computer. We can deploy the code to the distributed system of Etaifang, and let the machine help us execute the code. We can replace contracts written in natural language in the business world with contracts written in code, and contracts executed by people with contracts executed by machines. In addition, we have created two different accounts in the Ethernet shop, which is very different from any other block chain, such as Bitcoin. On other block chains, there is only one human-controlled account, and you can manage the balance of your account through your data.
But there is only one thing called a contract account in the Ethernet shop. It is controlled by a machine. The contract account stores logic written in code. No one in the world can control it. Only this code can control it.
This is a groundbreaking invention. It represents the first time in history that machines have achieved economic independence. In the system of Taifang, machines and people have the same status. In the Ethernet workshop, we do not distinguish between people or machines. Machines can also open accounts on the Ethernet workshop, so machines have economic autonomy. It is precisely because of this that machines can be a reliable middleman in the world. In our current business world, all intermediaries are people, and you may not be able to believe that he can properly keep your property; but when the machine has economic autonomy, you can believe that the machine can safely keep your property.
You can entrust property to a smart contract, that is, to a machine, because the machine can’t run from the block chain. At this time, I think that the process automation between the enterprise and the enterprise that we want to achieve at the beginning may be realized. So is it OK? Unfortunately, there is still much to be done.
If I ask you now, what is the most reliable application in the block chain? Do you think of the underground market or 1CO? What we can see is that these applications are far away from our business world applications. We need to decentralize Uber and Alibaba, but we don’t need to decentralize the underground market, which has nothing to do with our ordinary people. In my opinion, the reason for this phenomenon is that the existing public chain is a chain without permission. Anyone can do something anonymously in this environment. But for every normal person, what we need is not anonymity but privacy, which is different.
Trust in the Digital World
In the existing public chain, we can hardly see the existence of a stable currency. If we really want to move the present business world to the digital world, we need the support of stable currency, so that we can give a stable price to the goods sold and services provided, and can calculate the cost and benefit well. But you will also find that exchange rate stability in the public chain is difficult, it is difficult to achieve in a decentralized way. The business world necessarily needs supervision, but how can we do that in the digital world?
As a former member of ETF, I also experienced the most famous hacker incident in block chain history in the past year.
In a short time, 50 million dollars worth of ether coins were stolen, which were kept by a smart contract and a machine. At that time, there was a heated debate in the whole community about whether we should respect Code and Law (think hackers use code vulnerabilities reasonably and legally) and ignore it, or take immediate measures to recover the money?
At that time, we joined several teams to do a polling website to try to collect community votes. The final consensus was that measures should be taken to minimize the losses, so in the end, Etaifang did take such actions. We hard-coded the code to change the state of the data and got the money back.
But at that time, this behavior also caused a lot of controversy. Some people say that this violates the untouchable nature of data on block chains. What’s the point of block chains? But I would like to say, what exactly does “block chain can’t be tampered with” mean? It means that the history of transactions can not be tampered with, which is very similar to our real world.
Because you keep transferring, the books on Bitcoin are changing all the time, and the balance in everyone’s account is changing, but once a transaction is sent to the block chain, it can’t be revoked. In the Ethernet workshop, there has never been a revocation of transactions, only the state of the world has changed, which is a principle we should guarantee. But I often think, maybe we can do better, maybe we can do it in some way, rather than by changing the code rigidly.
Identity authentication is the foundation of licensing chain
How do you do it? In recent years, a new block chain has emerged, which we call license chain. It is very different from the public chain, and the licensing chain answers these questions very well.
In the licensing chain, both nodes and users may need to be authenticated before they can get a certain license to join the chain and use the services provided by the chain. Identity is the foundation of the licensing chain. With this foundation, we can better build a digital business.
In the licensing chain, with identity, we can easily introduce creditable institutions in the real world. These creditable institutions undertake what we call the French Currency Gateways, which issue tokens for a stable 1:1 exchange rate.
It may be easiest to use this trust-based and stable monetary mechanism in the licensing chain, and when digital currencies are really launched in the future, the mechanism of the French Currency Gateway will enable licensing links to real digital currencies.
We can also construct different governance mechanisms on the identity licensing chain. We can form an out-of-chain governance committee. When an emergency occurs, the governance committee can reach a consensus among adults in the chain shape and reach a decision to decide whether we want to do some operations or not.
The advantage of such an approach is that not only did we not modify history, but also what happened at that time and what decisions we made were preserved in history in the form of transactions. In this case, block chains can be a very good information recording tool.
But is that enough? It’s a pity that it’s a little short. We now see that there are many license chains around the world under construction, but they are all separated networks, and block chains are a technology with network effect, that is, the larger the network, the greater the value of assets in the network. We need a big license chain for everyone to use together.
The Public Licensing Chain is the Future
The second problem in the licensing chain is the economic incentive mechanism. The nodes in the block chain provide storage space by using their own computing power to serve all users in the block chain. But in the licensing chain, this service is free, and we lack an economic incentive mechanism to motivate these nodes to provide services.
Without such economic incentives, it is hard to imagine that the licensing chain can run steadily for a long time. In the foreseeable future, if there is no economic incentive, is the licensing chain still a block chain? Or it’s just a distributed database of block chains. So what should we do?
There is now a technology called public chain, which has advantages over licensing chain. First of all, you will find that the definition of public and license is not contradictory. Public means that as many users as possible are expected to use it. License means that users are expected to obtain a certain license before entering the chain to use the service, or to pass a certain identity authentication.
These two definitions are not contradictory. Why can’t we put them together? This is a new block chain that we think may emerge in the future. We call it the public license chain. It is not only a public chain, many people use it together, but also a licensing chain, where users and nodes are identical, which is technically feasible.
Its form may be to add another license layer or identity authentication layer to the shared unlicensed chain, or to completely construct an independent shared license chain, parallel to the shared unlicensed chain. We believe that these two types of block chains will complement each other very well in the future.
On such a distributed, intelligent and identifiable platform, we can move today’s business world into the digital world, and we can automate business processes between enterprises.
In other words, it is the automation of trust.
What is trust?
Trust means that I know you, don’t say anything, take my money away. That’s trust.