版权归作者所有，转载请注明出处
Because of This New Technology?
How do you think of the intermediaries participating in your work and life? Like lawyers and notaries specialize in legal support of the transaction, the clearinghouse plays a role in transactions between banks, but supervises on deals and charges you fees, and the "sharing economy" which provides services on a platform but quietly collects your data!
Image source: WIRED
What am I talking about? Simply speaking, today the media holds up Didi, Uber, WeChat, Alipay, Airbnb as examples of the sharing economy, but these are not truly peer~to~peer sharing, they are extraction economies created by large companies who act as a central intermediary controlling access to our assets.
They confirm and make sure our peer~to~peer deals are honest, for this, those companies take a huge cut of any transactions as their service fee, for a reward of providing us the amazing notarized service.
We pay the service fee for being supervised!
WeChat/ Alipay/ UnionPay/ JD pay. These payment channels serve as a clearinghouse or connect to the clearinghouse to track the fund flow.
The image above is the process of money transfer between banks online via WeChat/ Alipay or other channels, the clearinghouse for online transactions in China has a name called "Wang lian".
The image above is the process of money transfer between banks offline. The clearinghouse for offline transactions in China is UnionPay, which is authorized by the central bank of China.
What's That Meaning?
They know your consuming habits and may push you advertisements regularly. According to the transaction data, they can trace every party in this transaction chain. The worse is you still pay them the service fees.
Served as the same role as UnionPay or "Wang lian" in China, Visa / Mastercard are also clearinghouses in some overseas countries. The infographic below is the service fees they charge.
WeChat and Alipay have a credit system to rank us
Tencent and developer of the messaging app WeChat with more than 850 million active users launched its own credit system in early August signaling that private social credit systems are alive and well. For details, you can check from the article of Matthew Brennan, a WeChat expert. Check Your Credit Score On WeChat.
Alipay
The other side, Sesame Credit, a financial service on Alipay. It is measured by a score ranging between 350 and 950 points and rates the online financial transactions of those using Alipay. It obtains data from its partners including the taxis services Didi, rating whether users bothered to settle taxi payments.
Return the power of data to those people who create it, including you!
This "sharing economy" is expected to end with the popularity of the use of smart contracts, which based on the blockchain technology. It's time to return the power of data to its creators, no more intervention!
Smart contract fits for commercial purpose, SME lending platform ModulTrade has settled its first blockchain-based export transaction out of China.
A safe way of doing business
Using ModulTrade`s platform, Guangzhou Fuilie Trading sold a 3D printer to a counterparty in Russia. The goods were shipped by China Post once the seller saw the funds had been launched on the smart contract. Upon successful delivery of the goods, the funds were automatically released to the seller.
This transaction was small – just over US$1,000 – but again shows that the technology is beginning to be used outside of the laboratory. Evgeny Kaplin, ModulTrade CEO, tells that later this month, he plans to visit China to sign agreements with Chinese producers of mining equipment, who will start exporting their products on the Ethereum-based platform.
Smart contract is the future for the economic activities
Smart contracts that allow you to conduct transactions, conclude deals and perform many other tasks without intermediaries. The first person who suggested the idea of smart contracts was Nick Szabo, but practical implementation of the idea was carried out by Vitalik Buterin and the other creators of Ethereum.
Unlike your own computer, which may run programs for you locally, the Etherreum smart contracts run on a distributed network of computers. Everybody can see the execution and results. The more complex way to look at smart contracts is in their use cases.
A smart contract could be used for many different things, such as conclude or maintain commercial agreements using blockchain technology. The technology is, like Bitcoin, based on cryptography, which makes it possible to provide better security for counterparties than conventionally written contracts.
Advantages of the technology include:
Execution is automatic.
The use of smart contracts implies the absence of intermediaries, no such as lawyers and notarized organization specializing in legal support of the transaction.
Shortening the time for the conclusion of the transaction, the high level of security via immutability for the participants in the contract.
The absence of the need for all participants in the transaction to be present in one place for signing (everything can be done online through a unique digital signature)
Except for the example for the commercial purpose, we mentioned above, the implementation of the technology of smart contracts is the possibility of creating a securities market without the participation of the stock exchange or the clearinghouse. Market participants will be able to conclude deals with each other independently through decentralized peer~to~peer exchanges, without the services of such financial intermediaries.
Thousands of different technology projects are now made possible with Ethereum and its model of smart contracts. That`s a great thing, but it is not the end of the blockchain`s evolution.
Smart contracts store your financial data
With the smart contract, your financial data will be stored in the blockchain, a blockchain as a decentralized guide to where the data is stored, like the Internet`s naming registry, which points a URL to a server where the web pages are stored. This is what blockchain is designed for to some extents: relatively small blocks of data that point to other records in the system.
The infographics below show how the financial data of our online transactions go under two systems.
1. Without the use of blockchain
2. With the use of blockchain
The transaction is initially confirmed when storing into the Orphan block. Once it connects and is confirmed by 6 blocks in the main chain, the transaction becomes irreversible. Here is how the blockchain works! By using blockchain technology, financial data, transaction becomes transparent and undeniable.
Huge financial incentives to encourage companies to participate in the blockchain.
The Guangzhou government recently released a document about giving subsidies to the local company which participated in the blockchain construction.
For companies which registered in Huangpu district or Guangzhou Economic and Technological Development Zone, promise to not leaving or changing their obligations, they are eligible to receive financial subsidies from the government up to CNY 5 million annually.
The value of blockchain is unmeasurable, Bitcoin and other cryptocurrencies which push global transactions and exchange between different currencies freely, are only one application of blockchain.
The Chinese shut down Bitcoin but quietly set up the stated~own institution to study on the blockchain, they see its value. By that point, it`s likely that a multitude of other blockchain~based solutions will have gone live, as the technology finally moves towards commercialization.
Reference: Coindesk, Wikipedia, Reuters, technode, bbc, WIRED, GRR <Evolution of the blockchain: from Bitcoin to smart contracts and decentralized data storage> written by Jason Inch
HiTouch Consulting, established in 2009, is dedicated to providing professional business and legal solutions to international and domestic companies.Open Hong Kong Bank Account in GuangZhou,HiTouch can serve you.
