Dr.Feng Xiao,Founder of PlatON:The Core of Blockchain Governance Mechanism Is the Distributed Architecture
Abstract: The core of the blockchain governance mechanism is the distributed architecture, which is point-to-point network targetting the disintermediation. This feature will make blockchain become the infrastructure of the future business model and social structure. The second point of the autonomy mechanism is the consensus. Among them, the public blockchain, the alliance blockchain and the private blockchain have different consensus building mechanisms respectively. When there are differences, the blockchain will solve the differences through bifurcation. The third governance mechanism is encryption, which makes digital currency highly anonymous. Finally, penetrability and open source enable blockchain to share information and achieve interconnection and intercommunication, making blockchain a machine of trust.
At this stage,With the rapid development of blockchain and its technology, many people think blockchain has so important value and great prospect, iand will even bring to the world as great as the first generation of the Internet — we know the influence of the first generation of the Internet changed the whole social life and the operation of many ways.In this cases, we will have to ask a question: what on earth is the governance mechanism of blockchain? My topic today is “Discussion on Blockchain Governance Mechanism”, and I want to share my rough thinking on this aspect.
When talking about the governance mechanism of blockchain, the most core point is its distributed architecture. What is the distributed architecture? that blockchain is built on the basis of a distributed network. The simplest and most straightforward explanation of distributed network is called “ point-to-point network “ whose cores are “ point-to-point “, self-organization and disintermediation. Some people say it is decentralization, but I don’t quite agree with this statement, so I use the word “ disintermediation “ instead of “ decentralization “.
We see the term “distributed network” very much. As the digital migration of human society becomes more and more profound, the original network technology architecture is not enough to undertake such a highly frequent and huge data transmission, storage and use, so distributed technology began to appear. When we talk about blockchain, we will natrually discuss distributed network, distributed storage, distributed ledgers and distributed computing. especially in the age of the Internet of things, the so-called edge computing is going to become a very important concept. It is precisely because of this, when we summarize the development trend of the Internet of things, the Internet of things is divided into 1.0, 2.0, 3.0 . 3.0 era,that is, the sensor or chip itself has the ability to calculate. We’re not talking about the old model of routing sensor data through a gateway and routers to a centralized database for computation and then sending the result to the terminal device. But it’s a future direction — — — can take place anywhere, which can be called edge computing or distributed computing .
These technologies eventually led to the emergence of the prototype of distributed business model mentioned by the other speakers, such as IBM and China’s ride hailing called Didi, which initially had the characteristics of distributed computing. There are also many distributed organizations in the world, and the so-called community organization is very popular now, which is similar to the distributed organization. Vitalik Buterin will analyze ethereum blockchain is the distributed organization later. Driven by such technologies and business models, the whole social structure will also tend to be distributed in the end. And blockchain will become the infrastructure of such business model, social structure and organizational model. So when it comes to the governance mechanism of blockchain, the most important point is its distributed architecture.
The second point of blockchain governance mechanism, I think, is the consensus. As we all know, blockchain technology originates from community organizations. All public blockchains are running in a community way from the earliest bitcoin blockchain. In a community organization, if you have to make any improvements to the system or to identify some things, you must need the consensus of the whole network. Not only should the bookkeeping method of blockchain reach the consensus of the whole network, but any rule must be reached by the consensus of the whole network and the whole community before it can be changed. It is generally known that there the current blockchain can be divided into three types: public blockchain, private blockchain and alliance blockchain. It can be divided from different consensus mechanisms. The public blockchain requires a complete democracy in the consensus mechanism while the private blockchain doesn’t need it. The private blockchain is able to rely on centralized institutions to make final decisions, but there will be no final decisions in public blockchains. Alliance blockchains require less consensus mechanism than public blockchains, but much more than private blockchains.
The most fundamental way for the consensus mechanism of blockchain to deal with differences is bifurcation. The best way is to bifurcate the public blockchain when there is no consensus. The reason why ethereum has developed to the present day with strong life and robust network is that it has experienced several bifurcation. There is a debate in the community about whether or not bitcoin should be bifurcated, and I look at the comments, most of which are bound by vested interests. If the bitcoin blockchain doesn’t address these differences, in two or three years, it will be worth much less than it is today. We have observed that most of the commercial application projects so far have been developed based on ethereum. We rarely see people developing commercial applications based on bitcoin blockchain. Why? A very important issue is that the differences in the community are so great and the problems are not handled well . So bifurcation is a very key approach to make the network more robust , make application wider. and deal with community differences.
The third point is encryption, and the first-generation Internet is a transparent Internet. Today, we are willing to sacrifice some of our privacy for convenience, but if this situation continues, one day all of us in this room will not be able to bear it. If our medical treatment is completely run on the Internet, which means all your medical records and medical information are as transparent as the current Internet and can be accessed by anyone, the consequences are hard to image. So,the mechanism that the second generation of the Internet must have is encryption. Next,let’s recap, the title of the white paper on bitcoin in 2008 was “Bitcoin: A Point-to-point Electronic Cash System”. The core meaning of digital currency is anonymity, whether it is digital currency issued by central banks or other institutions.
Without the need for anonymity, everyone using the central bank’s current e-cash is good enough, but e-cash is transparent, which means any transactions we make online are transparent. If we can use anonymous digital currency, it can better protect a lot of our behavior on the Internet, such as our transaction behavior, payment behavior and so on. In addition to being just as anonymous as cash, digital currencies are also very friendly to central bank. We know that the central bank cannot track the current cash, so the task of anti-money laundering is very heavy. It lacks effective anti-money laundering methods. The core of digital currency is that it can achieve high anonymity of cash information, while at the same time making it easy for regulators to track. Using the anonymity of digital currency can better protect our privacy on the Internet and ensure data security.
I just watched a movie rencently called “The Fate of the Furious” In the movie, I saw hackers manipulate a thousand self-driving cars. It was a terrible scene. But this has already happened in the last year, when hackers manipulated more than a million internet-of-things devices, causing partial power outages in the United States. Therefore, the digital world that cannot be encrypted is an extremely insecure world, which is even more insecure than the current society. Now we only need to guard against evil people’s criminal acts, but if a digital world does not use the blockchain encryption mechanism to protect security, we have to guard against not only bad people, but also bad equipment and bad cars.
The fourth point of the blockchain governance mechanism is sharing. Anything that cannot be shared is not a blockchain. Sharing is reflected in two levels: One is that all the participants and all the istitutions share account information in the same ledger. The other is multiple information and multiple transactions are shared at the same time. Our existing ledger are kept separately. For example, the bank records the capital, while the logistics company records the logistics information. However,in the blockchain distributed ledgers, the data of funds, information, logistics and equipment operation are all shared. Only with these two levels of sharing can blockchain truly be built into a highly trusted platform with no intermediary.
The fifth aspect of blockchain governance mechanism is penetration. Each privileged node can penetrate to the lowest level of information on the blockchain. This privileged node refers to different roles, such as regulatory authorities, law firms, accounting firms, notary offices, etc. Although they do not participate in the confirmation of transactions and bookkeeping, they can become a special node on the blockchain according to their legal roles. In a world without blockchain, no privileged node can penetrate to the information in the bottom of blockchain. A regulator, such as a bank’s regulator, can see only the data reported by the head office, and on the blockchain it can, if it wants to, penetrate directly into the statements of any bank’s depository. Financial institutions , taking the bank as an example,after absorbing public deposits,they need to find assets, turn his money into loans, lend to asset owners or buy an asset directly, which is what we call asset securitization. But in a world without blockchains, these financial institutions cannot penetrate the bottom of the asset. Therefore, penetration is a very important aspect of the blockchain governance mechanism.
The sixth aspect of blockchain governance mechanism is open source. Any blockchain that cannot open source is not a complete blockchain. I mean the open source mainly includes two aspects. One is the open source of the underlying general protocol, which is a basis for trusting intermediaries. We have seen many companies say that they have established the underlying protocol of blockchain, but if your underlying protocols is not open source, you will not be trusted because the blockchain is not complete. The other is that a lot of the mathematical algorithm models on the blockchain must be open source, and you need to let me verify whether it is reliable and scientific or not. Only by doing these two things can we build a real trust mechanism with blockchain, so open source is an inevitable requirement. That’s all, thank you!