Encrypted digital economy, would be a relatively big change, affecting the distribution of wealth rule, innovative ways to motivate produce tissue morphology

Editor’s note: This article from the “pan-city assets”, author: Chen Wei Xing, authorized reprint.

On November 29, 2019, Chen Weixing, Chairman of Fancheng Holdings, was invited by Zhejiang University to share current trends in blockchain technology and opportunities for innovation and entrepreneurship. Chen Weixing was also the first guest in history to enter the Zijin Chuangxiang Auditorium twice.

Zhejiang University is one of the best schools in the country for blockchain. Hangzhou is also a leader in the field of blockchain in the country. Hangzhou also has a reputation for innovation and entrepreneurship.

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may catalyze global currency change

In sharing, Chen Weixing said: Blockchain is another particularly new technology that has appeared in recent years. Each new technology has its own characteristics, and it is suitable for solving things that the previous generation technology could not solve.

The core technology of the blockchain can be understood from two perspectives: the ledger database and the value database. As a ledger database, he has several characteristics: the first is that its lowest level technology is asymmetric encryption technology. In theory, with the power of current computers, the entire sun’s energy must be consumed before the password can be cracked. The second is that in addition to asymmetric encryption technology, the blockchain also has 4 layers of security measures, which are Transaction signature, Block signature, Chain signature, and Consensus.

The best applications of blockchain include: distributed currency system, new financial engineering, DAO.

Currency is the first application of the blockchain. Currency is only an accounting tool and does not represent real wealth. There are three main types of currency logically: Consensus currency, Commodity reserve currency, and Credit money. The types are different. There are many problems with these three currencies, and the differences from distributed currencies are mainly due to different releases, different transmission methods, and different risk mechanisms.

The new financial engineering is an extended application of the blockchain, which is used to solve asset confirmation, free asset trading, AI-based price discovery, and transparent and mechanized finance.

The third type of application DAO is short for distributed self-organization. That is, in addition to these financial engineering assets on the chain, in addition to being able to keep financial accounts, in addition to allowing machines to help you keep accounts, we can also form organizations on the chain.

Department of CryptoeconomicsThe system is an interlocking whole, interconnected and interconnected value Internet; it is strict mathematical logic, not slogan-type propaganda; it is a fair and transparent algorithm, not a scam to be concealed; it is law, process, technology and mathematics Jointly guaranteed security, not pure technical security; it is a vision of stimulating labor and creativity, protecting the old, the weak, the sick, and the young, rather than deceiving the masses of wealthy opportunities; it is aimed at the existing monetary system, financial engineering, economic laws Improving instead of being indifferent.

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may catalyze global currency change

The following is the actual speech (not reviewed by the speaker):

Chen Weixing: In fact, innovation means that when people around you are against you, you may have a chance, so if you want to do something new, it means that he is not an old thing. Often it is something that everyone disagrees with that will give these young talents nothing to do.

Everyone knows that the blockchain is a technology, but I want to use the words of our principal Ma to change the world, not technology, but the dream behind technology.

A young entrepreneur, why can he succeed? Because he sticks to his dream, a dream that he thinks this society should look like. With this dream, if he wants to achieve it, he will find those technical means. Of course, because you have new technology, you have the opportunity to do better than the previous generation.

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may catalyze global currency change

I want to say today that the blockchain is actually another particularly new technology that has appeared in the past few years. I have been in the business for many years and have experienced several changes. The first time I successfully started a business, I used flash technology. At that time, flash was a technology used by artists. It was not used by technicians, that is, people in our computer school would not do flash. flash. So at that time, Flash just supported sockets. Everyone who has learned about computers knows that it can connect in real time, and flash can be opened on a web page. Therefore, a technology that can be opened on a web page and connected in real time appeared. The original web pages are call-based, I can call some with a clickThe information comes back to show you, you click again and call the information back, even the animation is local, only after the socket is available, he can connect with the server in real time.

Based on this technology, we always wanted to make a very interesting and fun game on the webpage. We called the application of rich media, and later made this game because he was fun and can play for a long time This game called Magic Mechanics was the first bucket of gold I earned, and it was also the world’s first large-scale mmorpg game on the web at the time.

The mobile Internet technology appeared later. When the mobile Internet first came out, the market was also very hot. When the first wave came, many people moved some Internet applications to the mobile Internet, and then capital They also gave them high valuations, probably in 2009 and 10 years, but the wave of bubbles soon went down. Later, around the end of 11 years and 12 years, the capital was deserted, but WeChat, These more cross-generation applications of taxis were later used by the US Mission, so each technology has its own characteristics, and it is often suitable for solving problems that the previous generation technology cannot solve, not the improvement of the methods that the previous generation technology can solve. It is not a better method, but a different method. This is particularly important.

Blockchain is now in the phase of the first wave of bubbles, just as the mobile Internet has just started. Many people regard blockchain as the next Internet, that is to say, using blockchain to solve problems solved by the Internet is exactly wrong. Just as mobile Internet is not to solve problems solved by the Internet, blockchain must be the solution. A new problem, and the new problem cannot be solved by the original Internet system, and this problem should be particularly large, so that this technology is of great significance.

In the past few years, I have also invested in many companies. In the blockchain industry, basically, I have also invested, I have learned a lot of lessons, and I have some gains. What we can summarize here is that it will What new problem is being solved?

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may spur global currency change

Today, I can summarize and confirm what I can tell you, what exactly is a blockchain? Like the flash technology just mentioned, it supports sockets, which is the core point of flash technology improvement. The core point of the mobile Internet is that I am connected anytime, anywhere, because my mobile phone is always with me wherever I go, and the computer is not with you everywhere I go. With your mobile phoneSo clairvoyance, ears and ears, it can connect people to the Internet. So we defined it as an extension of human organs at the time, so we should take advantage of this feature.

Actually, we thought about many apps at the time, why did we think of a taxi? Because taxis are also moving and people are moving, it is impossible for you to use the Internet. Only the mobile Internet can connect two people. We call takeaway the same now. He connects two people. This technology that directly connects people has never appeared before. You can see that it works well later. Mobile Internet applications are directly connecting two people.

In fact, when I was doing a fast taxi, why was it called fast? Originally we defined fast life, that is, you can call for all the needs in your life. It should be a platform for calling services. We started from taxi because the frequency of taxi is clear and easy. do. At that time, I wrote an article. If I had been in charge, it should be like the current Meituan, not the current Didi. Our different founders have different ideas. At the time, my idea was that I could connect the server to talk to him with one click and make a deal. It was a tool to connect people with others.

So when you look at different technologies, it often has a core feature. What are the core characteristics of the blockchain? The essence of the blockchain is a database, which can be understood as a ledger database or a secure value database. I will focus on the ledger database.

The database just mentioned has two types of directions, the ledger database and the value database, but the most valuable one is the ledger database. The meaning of the value database is because it has value. I want to encrypt it. I let him It cannot be copied or tampered with, but its practically different technologies can also be implemented.

As a ledger database, it has several characteristics. I have never liked to say how many patents are applied for by the blockchain because it is not a very complicated database. The problem he wants to solve is clear. I want this ledger to be secure. Is open and cannot be tampered with.

The blockchain has several core elements. The first one called it is the asymmetric encryption. Everyone knows that the lowest level of security in all the Internet today is based on asymmetric encryption. Symmetric encryption is not as secure as asymmetric encryption (of course, if asymmetric encryption is cracked by quantum encryption in the future, symmetric encryption is likely to be more secure). Asymmetric encryption comes from a professor named Diffie. This idea was proposed in more than seven years. I can use a series of data to generate another item of data. The two are matched, but the two are different. It is the only solution, but it is different.

So asymmetric encryption has a very high historical status, and it won the Turing Award! (The highest prize in computer science) The entire asymmetric encryption is the foundation of the entire Internet cryptography. What we call the banking system is not secure, the school network is not secure, our central network is secure,The network security of government management agencies and the security of the military network are, in the end, the private key security. In the end, the asymmetric encryption as the private key of the password is safe. The private key is safe.

So if we hide the private key in the hands of a certain operation and maintenance person, or on which computer, the private key is obtained by others, your entire network is not secure, so the characteristic of the blockchain is that it blocks non- A private key for symmetric encryption was proposed, which allows everyone to own the private key. Because you have a private key that is mathematically unbreakable. If your property is in the hands of your private key, no one can snatch it away, because it is mathematically safe and theoretically based on the capabilities of current computers. It is necessary to use up the entire sun’s energy to crack the password.

So the private key is essentially your property right. In the future digital economy, if your money is on the Internet, you can only own your property right if you have the private key. It may be your money’s right. Is the right to data.

The second core is that in addition to the private key of the blockchain, you also need other encryption measures. Suppose you have a sum of money. After your private key is encrypted, you store it on a computer, but if this computer is not under your control, for example, if you throw this computer away, you will not get it back if you have the private key. Computers do n’t let you communicate, so they do n’t let you transfer money. There are 4 layers of security measures in it:

The first layer is the transaction signature. Every time you want to hand over your property to someone else, you must have your own private key to sign it. After each signature is signed, your property can be transferred, so the transaction signature is to ensure that each transaction is secure.

The second is Block signature. It means that when I have a computer to account for many people, I pack N transactions and sign again. What is it like? You go to the company for reimbursement, you sign it yourself, and your financial department person signs it to make a monthly statement, and then you sign the monthly statement before you send the money to you, so each monthly statement Is equivalent to a block.

The third layer is the Chain signature. That is to say, my July statement has been signed. When I signed this report in August, I had to check the July statement again. Is it true that every certificate is linked? It ’s not connected, it means that you were changed in July, and I ca n’t sign in August. Therefore, it guarantees that each block and each block of the ledger are linked, and then sign again. For example, when I come down a year, my general manager will sign another name, or every quarter my general manager will sign a name. Your financial statements have been confirmed again. After being signed by Chain, it will form a concept we call Merkle Tree, which was invented by a professor at Berkeley. After the invention, he never wanted to chat with people. Later, he used this ledger mechanism by Satoshi Nakamoto. After signingIt is equivalent to signing the name of the person you are reimbursing in a company, and then signing the name in the finance department, and then signing everything in this way, indicating that the account is safe.

But if the person you reimbursed colludes with someone in your finance department, it will be unsafe. So this is the last layer of security called Consensus. That is to say, the three of you may be colluding. Then I will find countless three people, and all the arrays will be confirmed together to ensure it is more secure. It is best that these arrays do not know each other, or even oppose each other. They can’t collusion, and the less collusion, the more secure they are. So the best Consensus is how to make his decentralized people jointly confirm this book. For example, this account is not counted by my school, and it is not counted by my company. I may confirm it once by the tax bureau, confirm it by the regulator, confirm it by the public welfare institution, confirm it by the Americans, and confirm it by the Chinese. Once again, the Africans may have to confirm it again, and everyone can come to confirm it, and the method of confirmation is to confirm it, and everyone has no opinion. This has reached a consensus, so the purpose of Consensus is to sign each private key. Is right and safe.

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may catalyze global currency change

So the so-called blockchain is Blockchain. In the paper of Satoshi Nakamoto, the word blockchain is not Block, Chain, or Consensus. We now talk about blockchain, which is to merge Transaction, Block, Chain, and Consensus to form a most secure ledger database. In fact, the value database does not need Consensus, so everyone uses the alliance chain. The alliance chain does not have Consensus, and they are all specified. So starting from the asymmetric encryption just mentioned, I continued to strengthen and encrypt it, making it extremely unlikely to be tampered with. Then in turn, we will reason about various attack methods, so the core index of the invention of the blockchain is you to use the example attack method, how can I deal with you to prevent me from being attacked.

There are about three or four hundred attack methods on the market. If you can prevent it, it means that your blockchain is more secure, so the blockchain is doing something that does not respect efficiency. Obviously a transaction is signed by one person. I have to sign so many people, and I have to accept such a strong attack. It is equivalent to a house. Not only do you have a wall, you also have to consider what the wall that the atomic bomb can’t break should look like. So this house is absolutelyNot just for living, he should be here to keep the safest things. Why do you have a wall that can’t even be attacked by the atomic bomb? It must be that a particularly important person, especially valuable things, lives in it, and this security is needed. What is the most important thing? Money is the most important, right? We are also worldly. Although we have ideals, emotions, and ambitions, money is the most important thing. If you do n’t have any money, you wo n’t be able to do anything, unless you go back to the Cultural Revolution, and you can try it if your father is Li Gang. In this era, we are all using market economy means, so there is only such a serious matter as money, which is most suitable for blockchain. And it must be that the more valuable the money is, the more it is necessary to use the blockchain to do it.

Everyone knows the renminbi now, but Africans may like the currency of a certain country in Africa. He does not necessarily like the renminbi; Europeans do not necessarily accept the renminbi. But for us money is RMB. Different people have different perceptions of money, so money seems to be something different from person to person. What exactly is money or what is it? This is not easy to understand, because in fact everyone likes it, but people who love you too often do n’t understand. You know you love him, but you do n’t know what he wants to do. You just want to own it, but you do n’t know what he likes, you do n’t know how to find you money, you just want to find money, right? This is where everyone understands the difficulty of money.

But if we look at money calmly, money is actually a tool for bookkeeping. Money is actually chips. When you play Texas or playing cards, you always use chips. So money is essentially a bargaining chip for people to collaborate with. It is a tool for bookkeeping. When we play mahjong, we see who loses and who wins. We have to have a playing card as a chip. Who wins.

There are two ways to keep accounts. One way is to keep a record of each one of me. The sum of the final account alignment must be 0. This is called account management. The second is the chips. For example, each of us first deals 10 playing cards, each of which has a different value. At the end, we record a book and subtract your cost, which is your winning or losing. This is another method of bookkeeping, which is Bitcoin’s UTXO approach.

Currency is a chip-based bookkeeping method, so if we need to collaborate a lot, for example, the money in our meal card is actually not RMB, it is the number that is remembered in our school database, but its effect is similar to RMB So, this is actually a similar currency, and Q currency is not RMB, but it is also a similar currency. We can call it Q currency, not currency. This is just a name.

So currency is a tool for bookkeeping. Although everyone of us likes it, it must be that you have made some kind of contribution. Others have put this account on your head. This is the nature of money.

So if our current currency is not so good, or the current bookkeeping method is not so good, and we want to invent a new account, what kind of bookkeeping method would be the best? thisI’ll talk about this issue later.

At present, there are mainly three kinds of currencies on the market, which are different according to different types. The first is called Consensus currency, which is a consensus-based currency. There have been many consensus-based currencies in human history, such as Gold is a consensus-based currency, and you do n’t know why it is valuable. Anyway, everyone recognizes it, including silver, brass, and shells. It is a consensus-based currency. It is often a special kind of physical item. This kind of item often has some special properties, such as easy to cut, easy to transfer, and easy to measure. It has some such characteristics.

The second kind is called Commodity reserve currency. This is an abstract concept. Let ’s say that he has something in reserve behind him. Let ’s say I have some logic behind this money, right? For example, Fiatmoney, which is known as the national credit endorsement, constitutes a so-called national credit that is reserved behind the country. The country promises that this money can be used to pay taxes and be used for transactions. There is also a commodity reserve currency. For example, if the gold is Consensus currency, I can print the gold reserve and then print the money, which is a Commodity reserve currency. Everyone knows that after the Bretton Woods system, the US dollar is a global currency. His logic is that I will send as many US dollars as I deposit gold, and you can come and ask me for gold. This is the commodity reserve currency, the Commodity reserve currency. Of course, we can also relax a bit. For example, I can store grain, I can store salt, I can store all kinds of things, and this can invent many kinds of commodity reserve currencies.

The third kind is called Credit money. Most of the money we use now is actually Credit money, which means that you have 1 billion dollars in the bank, and then he lent a person, and that person again Depositing the money in the bank, he was lending to another person, and he returned him to the bank. So in fact each of him borrowed many times, in fact his money is already much higher than it already has. Because he borrowed, deposited, borrowed, and saved many times, this was an amplified effect. Generally we have a method called the Basel Accord, in which the central banks collectively agree on some credit and money magnification multiples.

It turns out that many banks always like to continuously enlarge their credit. The leverage is very high. In fact, your real money may only be 1%. Therefore, a Basel agreement was formulated later, saying that your maximum leverage cannot exceed 12.5 times. For example, if you have 1 billion, you can only put up to 12.5 billion credits. If the credit is released, for each of us Speaking of that number in your bank, it does n’t mean real money, it just means you have rightsGo and get real money, but if everyone runs the run, it’s actually not that much real money. Of course, because we now have the effect of a computer, we will not let you run it at all. You have no way to say that I want to turn it into cash. It uses macro-control policies and the so-called reserve ratio to control this type of credit, but in fact 95% of our money is now this kind of credit, not real money! Money released through asset collateral!

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may spur global currency change

So these are three different currencies! These three currencies have actually caused a lot of problems now. Our existing fiat currency plus credit method has several problems, unlike the distributed currency.

The first problem is the way it is generated. It can only be generated by several centers, or one center. For example, my RMB base currency can only be printed by the central bank. The central bank instructs banks how to generate credit, so the entire way of generating it is produced by several macroeconomists or politicians based on their observations and analysis. But do you say science to this generation? It seems to make sense. Many macroeconomics are just like the old Chinese medicine. They are too hot, and they take some medicine. If they are too much, they take some medicine. But it is not fully quantified, so it will have macroeconomics. Learning such a very vague science, it is generated not at the place of demand, but by the hypothesis to circulate it through the center. It does not mean that we have a demand for chips. We will issue a chip.

But if it is a distributed money, we have 4 mahjong, we always have chips? We will issue a chip. If we have been playing mahjong all our lives and we do n’t have to settle anymore, we will always have chips. If we want to settle after 10 years, it ’s like you do n’t want to stay in China. You said I ’m going to Africa, you Exchange RMB for African money and settle it for you. The chips are the same. I played for 5 days today and I do n’t want to play anymore. Okay, let ’s clear it up and become RMB. Of course, you can exchange your RMB for another stack of chips and play another game. So our original chip is where we need it and where to generate it. But this kind of centralized chip is generated in one place. This is different.

Second, the way it conducts is different. If our chips are generated, we can do as much as we want, and everyone can play after finishing. Then if the central transmission, you think if we stand on the central angle, we definitely want the money to go to the hands of the poor as much as possible, so that the poor can benefit, the government can help the poor, and society is moreIncrease stability. Or I try to save the money to entrepreneurs, because entrepreneurs can invent new technologies, which can make more innovative young people and people who improve productivity get money; or say to teachers, teachers can teach more Outstanding students came out.

But in fact, you ca n’t send it with such precision. The method you can send is to the central bank to big banks, big banks to small banks, small banks to large enterprises, and then small banks to small enterprises. The more wealthy you are, the easier it is for people to transfer money, and the more people who need it, the less money they can get, and each time it is transmitted, the cost will increase. Yes, when I deposit it with ICBC, maybe 3 or 4 points. Its cost is getting higher and higher. When it is in the hands of the poor people, it may be 100% profit cost, and the annual cost may be 300%. This mechanism led to the transmission of money, which caused the distribution of wealth to be disliked by the poor and the rich, and led to the exploitation of workers, and the richer the easier it was to get lower-cost money.

At the same time, the conduction method will also cause some market effects. For example, the goods that our ordinary people buy, the so-called CPI, will definitely increase the CPI if the people have more money. The current theory of the country to send money is because we want prices to rise, and I want to issue the corresponding currency, but in fact, the money you send out, and it is transmitted to the hands of ordinary people, it will take many exploitations and a long time. So in order for CPI to grow sufficiently, it will have to print more money and print more money in advance.

Most of the money is passed on to some rich people. What do rich people use for money? He is not used to buy consumer goods, it has nothing to do with CPI, they go to buy stocks to buy a house, so rich people have more money, the house price rises, and the stock price rises. This is the reason why housing prices have risen, and why the stock market has such a big bubble, because the rich have too much money in their hands. Our National Bureau of Statistics only counts CPI. We only count inflation, but we do not count asset inflation. And this expansion of assets is benefited by the elite. Is there any benefit to my house price rising? Real estate agents are good, real estate speculators are good, and local governments are good, that is, ordinary people are not good. So the elite likes to do this. He thinks this is good, the economy is booming, and the common people are often ignored.

So this is the disparity between the rich and the poor due to the centralization of monetary transmission. He was a math problem, and the problem couldn’t stop. Because after you enter this cycle, if you do not send out money, it will lead to less change in the money on the consumer side, and it will also lead to a decline in house prices and a decline in stocks. Your house is down, stocks are down, ordinary people will be troubled, and local governments will not be able to pay their wages. The financing of this enterprise will not be available, and ordinary people will lose their jobs.

Plus we have another very serious problem, which is debt. You do n’t have new money, you ca n’t pay off the debt, you ca n’t pay off corporate debt, you ca n’t pay off local debt, you ca n’t pay off government debt.. Deflation may also be formed, making everyone more reluctant to consume. Therefore, it has become necessary to keep printing money, and I have to ensure moderate inflation, and I have to ensure that assets can rise. This is a mathematical model that can only rise but not fall. This is a serious problem, that is to say, we are going to continue to strengthen the gap between the rich and the poor. He couldn’t stop.

The third point is that the risk mechanism is different, that is, if our money is generated in a distributed manner, for example, a few of us will play mahjong and issue chips. If no one of us wants this chip, then it will be a few of us. I suffered, and I do n’t remember my account, we will not affect the person at the table next to Mahjong.

So if we have a credit, and if we have a different chip from another person next door, he will not affect it, but if the credit is centralized, the risks are contagious. The failure of any small city commercial bank will put the entire banking system at risk. Therefore, the failure of any bank must be paid by the central bank, and the central bank must control the resolution of his risks. So when you look at the US in 2008, when the Lehman Brothers collapsed, the US government did n’t want to save it, but later found that it did n’t work. He had to be saved, so the risk of turning into all the banks ’credit must be borne by the central bank ,what is the reason? The reason is because the credit issued by each bank is called Renminbi, and the Renminbi has already been exchanged with each other. The loan you have lent out has been circulating countless times. No one knows which financial account my credit corresponds to?

No one knows exactly how much risk your credit has, because it is concentrated. If our money is separated, his risks will be different, so if we want to solve so many problems of our centralized currency now, it is because the risk is constantly accumulating, and the current global banking system is an atomic bomb, and there is such a constant The radioactive poison regroups and you don’t know when it will explode.

It’s the same in the world, and it’s the same in the United States, because everyone’s system is actually the same, and now there is basically only one system in the world. Therefore, the accumulation of risks may explode at any time. We do not know when he explodes, and the explosion will also affect house prices and stock prices. The transmission mechanism is different, which will cause the disparity between the rich and the poor to become more and more serious. The way we generate it will cause the needless places to be created, which will lead to more people unable to cooperate.

For example, I went out with Teacher Zeng, I went fishing, he went to grow vegetables, and I changed fish with him. Everyone was very happy. But without a credible money, we can’t cooperate, then I can only eat fish, he can only eat vegetables. This society is like this, you need chips to get everyone to collaborate. We talk about consumption. While we can’t sell things, some people are unemployed. Did we all receive such education when we were young? Say that while the capitalists have poured the milk, the common people cannot drink it. Why is it? Because it doesn’t have a chip for everyone to play.

So when you do n’t have the money,When the place where it is created, it will cause the economy to be worse, because people who want to work cannot work, and people who want to sell cannot sell. So I just said that the best way to apply blockchain is actually this distributed currency system. This technology is a technology for producing money. We must first talk about science. We must show our loyalty with the spirit of science. We must study science objectively with a loyal attitude. Science is science. The question we just said is already so big, we are facing whether your credit will collapse one day? Crashed, what will we do? What do we face when the disparity between the rich and the poor grows? We have faced so many people talking, because there are no chips, because there is no way to go to work because of no money, no way to start a business, no way to consume, what should we do?

When the problem I face is big enough, we have to break through some of the original ideology. Can we invent a new way to make chips to make society better and solve the problem just mentioned. If we think about it further, if a currency system like ours continues to develop, everyone can see that the entire creditor’s rights will collapse, the entire financial market may be very risky, and our entire society may be chaotic, which may result in war. Since there are so many questions, why don’t we think about a new method in a scientific way.

That’s why I think a better scientific attitude is often politically correct. You can benefit more people in the society and enable the country to develop better, which is politically correct. So let me talk about how this distributed currency system might change it?

Chen Weixing, Chairman of Fancheng Holdings: Blockchain may spur global currency change

I just mentioned that there are three forms of distributed currency. The first is a consensus-based currency. As you know, many consensus-based currencies that have appeared in our original history are physical things, such as gold, silver, Shells, stones. We are in a blockchain environment, in a digital economy environment, assuming there is no bitcoin now, can we invent a special, very physical thing that no one can control, which can make him digital in the future Something like gold in the world. If we were to invent something like this, it should meet some of the attributes of gold, its production needs a certain energy cost, its production speed has some restrictions, and its total amount may also be limited. Safety.

So Bitcoin is essentially a group of geeks at the time. In fact, it probably started to think in the 1980s. One of them made a great contribution, called David. There were manyEvery geek has wondered if he can create such a very fair, cryptographic, and extremely secure mechanism that can become a consensus currency in the future. Satoshi Nakamoto gathered the ideas of previous people and created a perfect solution. The characteristics of this solution are special equality. Everyone joins at any point in time. You are equal to everyone of. At the same time, it is very secure. He can be very secure from various cryptographic perspectives. Therefore, Bitcoin is actually an attempt to achieve a consensus currency in the digital age. He is still an attempt so far, but this attempt is now relatively large.

Why do we have something like this? Should we still use gold, or the US dollar may be okay. Many people will have such a different point of view, why is it Bitcoin and why is it not other coins? So there are some characteristics. If we assume that the U.S. dollar will not work, I think he will definitely not. Then we may have several options. We hope that it will be renminbi so that we can export in renminbi. We do n’t need food exports to exchange for US dollars. We can export RMB for food. But our RMB is actually very bad, we have a lot of debt, and some problems with our RMB itself. Is it Euro? The euro is not as good as the US dollar. Is it possible that it is an SDR? The World Bank reserves the currency combinations of various countries and turns it into an SDR. Add them together and you’re done.

So you will find that the fiat currency is often not working, so you can only return to gold, but why gold has always failed for so many years, because gold has a big disadvantage, it is easy to be controlled, and it is opaque. The United States says how much gold I have, who knows? Now the world is a good show played by the Americans. His US dollar is constantly being printed, and the whole world pays for him.

The characteristic of gold is that it is opaque, because it is easily hidden, easily manipulated, and easily controlled. So it made gold come out every time the world collapsed. For example, when World War II fought, the result was that 80% of the gold went to the United States, and then American industry developed. So gold is only useful when the economy is crashing. When the economy improves, they start cheating again, the US dollar becomes the U.S. dollar, and the U.S. dollar becomes the U.S. dollar, it means that I have nothing to do with gold, so if we go to the next stage Back in the golden age, he will definitely return to the situation just mentioned, and gold is under control again.

So if we have one that is not easy to control, it will definitely be better. Of course, gold has reached a consensus for thousands of years. Whether it is the grandmother in Africa or the grandfather in Xinjiang in China, he can accept gold because he has passed wide enough to make it in the corners of the world. There is liquidity in it, but its measurement may not be soLetting the blockchain help the assets confirm their rights can allow the assets to conduct various contract-based transactions. Because you have more and more transactions in this digital economy, you can find the price through AI. The more data, the smarter the machine, and the more accurate the price. The more accurate the price, the lower your risk cost and the lower the transaction cost. There is another concept in economics called Gauss’s theorem. To put it simply, if the transaction cost is zero, then any man must be able to find the woman who loves him the most, which means that any commodity must find the owner who needs him most. So how to reduce transaction costs depends on price discovery. If the economy is in a digital economy, more and more transactions are on the chain and in the database, so more and more robots can find this price, which is an infrastructure to reduce our future transaction costs. Of course, its finances and legal affairs can be made simpler.

The third type of application, I call it DAO, is the abbreviation of Distributed Autonomous Organization. This is just a concept. What does self-organization mean? That is, in addition to these financial engineering assets on the chain, in addition to being able to keep financial accounts, in addition to allowing machines to help you keep accounts, we can also form organizations on the chain. For example, the class can be registered on the chain, so that everyone has a common account on the chain, and the class fee can be managed by the robot. The common wealth in the class can also be programmed to manage it, and even the money of the class can be passed on for a lifetime. It can make a public organization and public account programmable. Or we need to establish a public welfare fund, all accounts of public welfare organizations can be donated on it, can be used on it, and they are all programmable.

This way, your organization can also collaborate with another organization. It turns out that our organization is often registered with an intermediate authority so that you have your own account. In the future, you can register directly on the blockchain, and it is programmable. Your organization rules can be written in programs. What benefits will this bring? Because there can not be only individuals on the chain, in addition to building relationships between people in our society, we also have legal persons. What are the benefits of a legal person? We can do something together as a group. For example, we are a fund, I can let many people put money in a fund and give it to three people to take care of, a company is a legal person. Of course, such a legal person can act together, have common money, and concentrate on doing things with the same goals.

So most of our economic activities are actually done by legal persons, so there must also be legal persons in the crypto economy. We call it DAO. It is an algorithm-based legal person, an algorithm-based organization or self-organization, and it can become a member of participating economic systems. If it is derived, it will be a sociological concept. In the future, it will be a cooperative body based on an algorithm. For example, Bitcoin is actually a cooperative body. Some people go to mine, some people hold bitcoin, and some people trade. Everyone is under the rules of a common algorithm.