Trillion Market Opportunities in the Blockchain Under the New Wave of Infrastructure
The blockchain technology still has pretty basic use-cases and it’s far from finding proper industrial applications. So, does it have the capabilities to support China’s newly announced “New Infrastructure?”
Recently, the U.S. market’s stock disaster shook its financial system to the core. The Federal Reserve, in an effort to reduce panic, injected a huge amount of freshly-printed dollars into the ecosystem. As we inevitably roll toward a global recession, the only hope that we truly have is in a technological revolution.
On March 4th, the Standing Committee Meeting of the Political Bureau of the CPC Central Committee laid down the law for the country’s “new infrastructure” to speed up the technological revolution. The policy stressed that the extra effort will be put into the construction of new infrastructures such as 5G networks and data centers. The new policy also begs one to ask several questions:
• What is the difference between the new infrastructure and the traditional infrastructure?
• How many technological revolutionary factors does it contain?
To answer these questions and several others, CoinVoice created an original innovation section called “Creation and Evolution.” This new innovation section has two main goals:
• Create the blockchain industry’s most cutting-edge online sharing platform for innovative companies.
• Organize talks about the evolution methodology of enterprise development.
To emphasize the latter, CoinVoice invited Xiaomi Finance and TOP Network to talk about the new infrastructure and the trillion market opportunities that it offers in the blockchain space.
CoinVoice: Recently, “new infrastructure” has become a hot word again, but it is not a new concept. It was mentioned at the Central Economic Work Conference in 2018. What is the significance of this re-examination every two years for China’s development, especially during the current pandemic?
TOP Network co-founder Noah: At present, I have not seen a clear definition of traditional infrastructure and “new infrastructure,” but in a general sense, traditional infrastructure mainly refers to railways, highways, airports, bridges, and other fields.
As for the “new infrastructure,” several experts, industry insiders, and media organizations have identified the following eight aspects as the main components of the new infrastructure – 5G base stations, special high voltage, industrial internet, high-speed intercity railway, intercity rail transit, new energy vehicle charging piles, artificial intelligence, and big data centers.
The new infrastructure and the traditional infrastructure are both connected to some extent but also have specific essential differences. Most of the conventional infrastructures focus on physical investment, but the new infrastructure contains both tangible and intangible infrastructure investments, and most of them tend to be digitally intelligent. The new infrastructure has distinctive technological characteristics orientation and is supported by modern science and technology, especially information technology. It aims to build the critical infrastructure in the digital economy era and promote the digital transformation of the economy and society.
Two years after mentioning it at the 2018 Central Economic Work Conference, the central government mentioned the new infrastructure again due to the pandemic. They stressed the importance of technology and digitization. Let’s take the example of Ali Dharma Hospital’s AI algorithm, which helps in the detection of pneumonia. The algorithm drastically shortens the detection time and achieves an accuracy rate of 96%. The technology has been promoted to more than 100 hospitals in 16 provinces and cities across the country, and a total number of more than 60,000 clinically suspected cases have been completed.
At the same time, the government has encouraged the citizens to use digital epidemic prevention, with 28 provinces quickly establishing a digital epidemic prevention system, and more than 200 cities have copied the health codes.
More importantly, China’s future economic growth will pay more attention to the quality of development in 5G, data centers, industrial Internet, and other fields. Focusing on areas such as AI and industrial internet will be critical for the economic development of this scale.
CoinVoice: Blockchain was mentioned in the national major strategic plan last year and many people have full confidence in it, but at the same time, many feel that the technology is still in its early stages. What technical difficulties and factors currently hinders the blockchain from reaching large-scale application?
Xiaomi Finance Jiang Yongqiang: Blockchain injects the soul of “trust” into the Internet era and has irreplaceable value in the future development of science and technology. At present, the development of blockchain is still at an early stage. Due to the excessive hype, its value has been hugely overestimated. Now that the elements of speculation and hype are gradually receding, the true potential value of the blockchain will eventually emerge. Even if it is not included in the new infrastructure this time, we still believe that with the improvement of the blockchain’s own technology, the accumulation of use cases, and the mining of commercial value, it will explode with greater force and commercial value in the future.
TOP Network co-founder Noah: Blockchain development is indeed at a very early stage, and most public chains have not entirely solved the scalability problem. Our TOP public chain has achieved high scalability through network sharding, computing sharding, and state sharding. As such, we are ready to support large-scale businesses. Of course, we are still going through continuous optimization and improvement.
In addition to technical limitations, another factor is that dApps currently have little to do with people’s daily lives. The most popular application is virtual currency, most of which turn out to be MLM and scams, making people more afraid of this technology. This very unfavorable for the popularization of blockchain technology.
At present, the lack of upstream and downstream requirements for large-scale application scenarios is mainly due to the decentralization and data sharing characteristics of the blockchain. It requires institutions to change the original cooperation model and benefits distribution mechanism. Think of how the internet gradually evolved from a simple information repository to something that has seeped into every single aspect of our lives.
Technically speaking, the blockchain technology can open up information silos through open interfaces. In the future, data sharing and cooperation will be done directly through the blockchain, which will bring higher efficiency in a more credible and open form. But this requires a very innovative business model. Most of the blockchain technology applications seen so far are still relatively basic and far from forming an industrial chain.
CoinVoice: Many industry experts believe that blockchain as an infrastructure in the new generation of 5G, artificial intelligence, and big data will bring a huge change to the industry. What’s your opinion about that?
Xiaomi Finance Jiang Yongqiang: The new infrastructure focuses on highlighting the new direction of industrial transformation, which reflects the general trend of accelerating the development of high-end industries. In this trend, the effective use of data in related directions such as Industrial Internet and IoT is a problem that needs to be solved urgently. The blockchain technology is just a very effective way to solve the needs of data validity, data authenticity, and data sharing.
The use of blockchain alliance chain and other models can effectively provide a solid data foundation for the new wave of infrastructure and help complete the overall industry upgrade.
TOP Network co-founder Noah: Although the central government did not mention the blockchain in the new infrastructure this time, it does not mean that the blockchain has no chance in the new infrastructure. Xinhua network pointed out in a recent article that “new infrastructure” can be divided into four levels:
• The core layer provides the infrastructure for digital technologies such as 5G base station construction and IDC data centers.
• The second layer is the intelligent hardware and software foundation, which can holistically transform the existing traditional infrastructure, such as artificial intelligence and industrial Internet.
• The third layer is the supporting application facilities for new energy and new materials, such as electrical vehicle charging stations.
• The outermost layer is supplementary infrastructure, such as the construction of UHV, high-speed intercity railway, and urban rail transit. In the future, 5G, cloud computing, AI, IoT, and the blockchain will become the basic production tools of society like water and air.
However, at this stage, industrial internet, big data, and artificial intelligence is much more mature than the blockchain technology. But with the development of blockchain, it will certainly be a situation where multiple technologies will keep pace and integrate with each other.
CoinVoice: Keeping in mind the new infrastructure, which application scenarios of the blockchain will be greatly promoted and developed?
Xiaomi Finance Jiang Yongqiang: Blockchain is naturally one of the more indispensable applications in the financial field. It solves the Thaksin problem in the financial field. The use of distributed ledger, smart contracts, and other related technologies can help financial institutions to complete data validity and consistency certification via asset data transfer and the establishment of online asset transaction models. The difficulty in the industrial chain is to confirm multiple role relationships between multiple industries. This is precisely the advantage of blockchain technology. At present, most banks have launched financial products based on blockchain, and many core industrial enterprises such as Xiaomi have also launched industrial chain financing services using blockchain technology. The involvement of blockchain technology in the industrial chain business has dramatically accelerated the development of internet, and has broken through the data barriers between industry and finance.
TOP Network co-founder Noah: As we all know, the main characteristics of blockchain technology are openness, transparency, and non-tampering. In the new infrastructure, blockchain technology can provide data confirmation for big data technology, data protection for 5G technology, data analysis for artificial intelligence technology, a reliable data source for cloud computing technology. Moreover, it helps IoT technology overcome performance barriers and reduce operating costs.
Therefore, blockchain technology can play a decisive role in the new infrastructure and also promote the development of other technologies. We can even say that the blockchain technology is “infrastructure in new infrastructure.”
CoinVoice: As the spokesperson for the public chain and the alliance chain, what kind of roles do you think those chains will play in the future digital infrastructure of China’s digital economy?
Xiaomi Finance Jiang Yongqiang: In this era, blockchain technology does not require a third-party or authoritative organization carriers. It has application potential not only in the economic field but also in many fields. The characteristics of the public chain – as the name implies – is more suitable for the public-facing scenario, which plays a vital role in protecting user data, maintaining the interests of users, and enhancing trust among users in the platform.
However, due to the limitations of throughput (tps) and on-chain storage space of the public chains, it is difficult to implement applications in environments such as finance that require data privacy and high data transmission rates. Therefore, the public chain has been transformed into an alliance chain system with strong applicability within a specific range.
The alliance chain is relatively more suitable for exclusive scenarios. Through the stable transfer, it can help companies to share certain transaction data more safely and transparently, thereby increasing the trust between companies and expanding business models. Through multi-level alliance chain, cross-chain, and other technical applications, more complex business design can be achieved, thereby solving the complex application of multiple rules such as roles, permissions, and levels in an open commercial environment.
TOP Network co-founder Noah: In fact, there is no apparent boundary between the public chain and the alliance chain; only the degree of openness is different. We can see that many public chain projects can provide alliance chain technology, and many alliance chains can also move towards public chains.
At this stage in China, due to policy reasons, blockchain technology may be implemented more in the form of an alliance chain, and it is sufficient to use within an institution or enterprise. Therefore, the best application scenario of the alliance chain is within the organization or enterprise, or those areas with clear use range.
Public chain is the underlying infrastructure of the blockchain. It can be widely used in fields related to finance, cross-border payments, vouchers, bills, supply chains, and traceability. The public chain may play a greater role if it is not limited to a group or an industry that does not require too much supervision. But as I said before, there is no obvious boundary between alliance chains and public chains.
Public chains can provide technical support in the form of an alliance chain. On the other hand, alliance chains can also be quickly developed into public chains. Therefore, blockchain technology can have a significant impact on the construction of digital infrastructure in the future.