Blockchain (English name: blockchain[3-4][7]Or block chain[2][13] ) is a block chain storage, tamper proof, secure and reliable decentralized distributed ledger[1]It combines distributed storage, point-to-point transmission, consensus mechanism, cryptography and other technologies[8], record transactions and information through growing data block chains to ensure data security and transparency[6]。
Blockchain originated from Bitcoin and was initially proposed by Satoshi Nakamoto in 2008 as the underlying technology of Bitcoin[1]。Since the birth of the Bitcoin network, blockchain has gradually evolved into a global technology, attracting global attention and investment [3].Subsequently, the emergence of new generation blockchain platforms such as Ethereum further expanded the application field[3-4]。
Blockchain features include decentralization, tamper proof, transparency, security and programmability[6][8]。Each data block is linked to the previous block to form a continuous chain, ensuring the integrity of the transaction history.Smart contract technology makes blockchain programmable and supports wider applications[5]。
Blockchain is widely used in finance, supply chain, medical care, real estate and other fields[5][8]。Although still facing scalability and regulatory challenges, it has become a powerful tool to change traditional business and social models, and has great potential for the future[13-14]。
Chinese name
Blockchain
Foreign name
blockchain[3-4][7] block chain[2][11]
Definition
A decentralized distributed ledger technology[1]
Features
A decentralized distributed ledger technology, which is decentralized, tamper proof, transparent, secure and programmable[1]
Classification
Public chain, alliance chain, private chain
Field
Finance, supply chain, medical care, real estate, etc
come of
November 1, 2008 (proposed) January 3, 2009 (birth of Genesis Block)[1][3]
Blockchain technology has been used sinceBitcoin(Bitcoin) white paper Bitcoin: A Peer to Peer Electronic Cash System[1]Since the author, whose pseudonym is Satoshi Nakamoto, put forward this article, it has received a lot of attention and controversy.Some people believe that blockchain is a subversive technological invention after steam engine, electricity and the Internet, which will completely change the way of value transmission in the entire human society, and even bring a new round of scientific and technological revolution[3][8][37]；Some opponents believe that Bitcoin and even blockchain are a fraud, or are full of worries about its future[9][35-36]。
In recent years, with BitcoinEthereum(Ethereum), etcCryptocurrencyBlockchain technology is gaining more and more attention worldwide.On October 24, 2019, the Political Bureau of the CPC Central Committee conducted the 18th collective learning on the current situation and trend of blockchain technology development[38]Since then, blockchain technology has attracted the attention of the whole country[39]。Blockchain technology has been applied in many fields, such as finance, logistics, food safety, etc[15][21][30]。Although many people are still full of doubts about the future development of Bitcoin, most technical experts agree with the future of blockchain technology and believe that the promotion and application of its concept will eventually surpass cryptocurrency and become the hotspot and cutting-edge technology of the times[16-17][22][37]。
However, compared with its hot application, widespread attention and vigorous development, the general public's perception of blockchain is still at a very simple level.People's understanding of blockchain is often limited to encrypted digital currency, or it is a high-tech far away from daily life[27][31]。In general, blockchain technology has established a new trust mechanism, allowing each network node to reach a trusted consensus without the decentralization of authoritative nodes, which is a major leap from thought to technology[34]。
The concept of blockchain
Nakamoto Cong did not give a specific definition of "blockchain" in his article Bitcoin: a point-to-point electronic currency system, but proposed a chained block structure based on hash proof, that is, a data structure called blockchain.The word "blockchain" also comes from this. The word "block" refers to a basic structural unit (block) containing data, while the chain represents the hash linked list generated by the block.
In a narrow sense, according to the White Paper on China's Blockchain Technology and Application Development issued by the Ministry of Industry and Information Technology in 2016, blockchain technology is a distributed ledger technology that combines data blocks into a chained data structure in a chronological order in a sequential manner, and ensures that they cannot be tampered with or forged by means of cryptography[33]。In a broad sense, blockchain technology is a new distributed infrastructure and computing paradigm that uses blockchain data structures to verify and store data, uses distributed node consensus algorithms to generate and update data, uses cryptography to ensure the security of data transmission and access, and uses smart contracts composed of automated script code to program and operate data[25]。It is generally believed that blockchain technology is an emerging technology accompanied by digital currency led by "Bitcoin". It is a point-to-point distributed ledger technology based on cryptographic algorithms, and a new application mode of computer technologies such as distributed storage, point-to-point transmission, consensus mechanism, encryption algorithm, etc[23]。
The blockchain includes three basic elements, namely, transaction (one operation leads to one change of the ledger status), block (recording the transaction and status results occurred in a period of time, which is a consensus on the current ledger status) and chain (chain, which is a log record of the entire status change, and is composed of one block in series according to the order of occurrence).Each block in the blockchain keeps data records (i.e. transactions) within a specified period of time, and builds a secure and reliable chain by means of cryptography to form a distributed ledger that cannot be tampered with and shared by all members.In general, the blockchain is an account book that contains all historical transactions. Different nodes hold one copy of each other, and the consensus algorithm is used between nodes to ensure that everyone's account book eventually tends to be consistent.Every block in the blockchain is every page of the ledger, recording transaction entries recorded in batches.In this way, the details of all transactions are recorded in a public ledger that can be seen by any node. If you want to modify a recorded transaction, you need to modify all nodes holding the ledger at the same time.At the same time, because each page in the blockchain ledger records a summary information of the previous page, if the ledger on a page is modified (that is, a block is tampered with), its summary will not match the summary recorded on the next page, and then the content of the next page will be modified, which further leads to the mismatch between the summary on the next page and the record on the next page.In such a cycle, the tampering of a transaction will lead to the modification of all subsequent block summaries. Considering that it is also necessary for everyone to acknowledge these changes, this will be a work with huge workload that is almost impossible to complete.It is from this perspective that the blockchain is tamper proof.
Distributed accounting network
Schematic diagram of block model in blockchain
Characteristics of blockchain
1. Decentralization
In Nakamoto's design, each Bitcoin is generated independently of the authoritative central organization. Any individual or organization can participate in each mining, transaction and verification, and become a part of the huge Bitcoin network.The blockchain network usually consists of a large number of nodes. According to different needs, some or all nodes will undertake the maintenance of ledger data. The offline or loss of function of a small number of nodes will not affect the operation of the overall system.In the blockchain, all nodes and miners abide by a set of accounting and transaction rules based on cryptographic algorithms. Through distributed storage and computing power, they jointly maintain the data of the whole network, avoiding the high cost, fraud, lack of transparency, abuse of authority and other problems caused by the management of data by traditional centralized institutions.The transaction between ordinary users does not need the intervention of a third party institution, and the transaction interaction can be conducted directly point-to-point[21]。
2. Openness
The blockchain system is open. Its data is open to everyone. Anyone can query blockchain data and develop relevant applications through the open interface, so the information of the whole system is highly transparent.Although the anonymity of the blockchain enables the private information of all parties to the transaction to be encrypted, it does not affect the openness of the blockchain. Encryption is only a protection of open information[20]。
In the open blockchain system, in order to protect some private information, some blockchain systems use privacy protection technology, so that although people can view all information, they cannot view some private information[20-21]。
3. Anonymity
In the blockchain, both sides of data exchange can be anonymous, and each node in the system can exchange data without knowing each other's identity and personal information[20]。
When we talk about privacy, we usually mean privacy in a broad sense: others do not know who you are or what you are doing.In fact, privacy includes two concepts: privacy in a narrow sense and anonymity.The narrow sense of privacy is that others know who you are, but do not know what you are doing;Anonymity means that others know what you are doing, but do not know who you are.Although transactions on the blockchain use pseudonyms, that is, addresses, since all transactions and statuses are clear text, anyone can analyze all pseudonyms and construct user profiles.More research has pointed out that some methods can resolve the mapping relationship between aliases and IP addresses. Once IP addresses are associated with aliases, every user's behavior will be exposed to the sun.
In cryptocurrency systems such as Bitcoin and Ethereum, transactions are not based on real identities, but on wallet addresses generated by cryptography.However, they are not anonymous systems. The anonymity of digital currency mentioned in many articles and books is actually an alias.In general systems, we do not clearly distinguish names from anonymity.However, when privacy issues are specifically discussed, names and anonymity will be differentiated.Because the information generated by pseudonyms can be queried in the blockchain system, especially in the public chain, the feature that all transactions can be queried publicly will make pseudonyms completely anonymous under the analysis of big data.But the real anonymity, such as the privacy technology used by private currencies such as DashiCoin, Monroe Coin and Zcash, is truly anonymous.
Anonymity is different from an alias.In computer science, anonymity refers to a pseudonym with unlinkability.The so-called irrelevance means that other people in the network cannot associate any two interactions (sending transactions, queries, etc.) between the user and the system.In Bitcoin or Ethereum, since users repeatedly use the public key hash value as the transaction identifier, it is obvious that the relationship can be established between transactions.Therefore, Bitcoin or Ethereum does not have anonymity.These data without anonymity will cause the disclosure of business information and affect the popularization and use of blockchain technology[18][20-21]。
4. Traceability
The blockchain adopts a blockchain storage structure with time stamps, which is conducive to tracing the whole process of transactions from the source state to the latest state.As a proof of the existence of block data, time stamps help to apply the blockchain to time sensitive fields such as notarization and intellectual property registration[6][19]。
5. Transparency
Compared with user anonymity, the transactions and history of Bitcoin and blockchain systems are transparent.In the blockchain, the ledger is distributed to all participants in the whole network, and the proofreading and historical information of the ledger are transparent and open to the holders of the ledger[6]。
6. Tamper resistance
Each transaction of Bitcoin will be recorded on the blockchain, which is different from the transaction mode dominated by the central institution. The central institution can modify the transaction information of any user on its own. Bitcoin is difficult to tamper with[6]。
7. Multi party consensus
As a distributed ledger system with multiple parties participating in maintenance, blockchain participants need to agree on rules for data verification, writing and conflict resolution, which is called consensus algorithm.As a public chain, Bitcoin and Ethereum currently use the workload proof algorithm (PoW), and the consensus algorithm applied to the alliance chain field is more flexible and diverse, close to the business needs themselves[20]。
Development history of blockchain technology
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Development context of blockchain technology
1. Blockchain 1.0
The 1.0 era is a virtual digital currency era represented by Bitcoin, which has realized the application of digital currency, including currency functions such as payment circulation and decentralized payment means.Bitcoin describes a grand blueprint. The future currency is no longer dependent on the issuance of central banks, but a global unified currency.
2. Blockchain 2.0
The 2.0 era is the era of smart contracts. The combination of smart contracts and digital currencies has a broader application scenario in the financial field. The point-to-point operation implemented by the blockchain avoids the involvement of third parties, avoids environmental, transnational, cross bank, currency conversion and other problems, directly realizes point-to-point transfer, and improves the efficiency of the financial system.The representative of blockchain 2.0 is Ethereum,EthereumIt provides a smart contract programming environment. Users realize various complex logic by developing smart contracts and provide a wide range of commercial and non-commercial application scenarios.
3. Blockchain 3.0
The 3.0 era refers to the era when blockchain technology is applied to industries other than finance. Blockchain 3.0 is called a new generation of technological innovation after Internet technology, which can promote greater industrial reform.Blockchain 3.0 will involve all aspects of social life and will be widely used in data storage, data authentication, asset management, election and voting and other fields to promote the circulation and effective allocation of information, resources and values.
Development history of blockchain technology
1. Before Bitcoin (1970-2008)
In 1976, Bailey W. Diffie and Martin E. Hellman published the paper New Direction of Cryptography[11]The paper covers all the new development fields of cryptography in the coming decades, including asymmetric encryption, elliptic curve algorithm, hash, etc. The paper has laid the development direction of the entire cryptography so far, and also played a decisive role in the blockchain technology and the birth of Bitcoin.Hayek published his last monograph on economics: Denationalization of Money[12]。The concepts of non sovereign currency and competitive currency issuance proposed in the book are the spiritual guide of decentralized currency.
In 1980, Merkle Ralf proposed Merkle Tree data structure and corresponding algorithm。
In 1982, the question of Byzantine generals was raised by Leslie Lamport and others, which is a basic problem in point-to-point communication.
In 1982, David Chaum proposed the cryptology online payment system, which focuses on privacy and security and has untraceable characteristics.
In 1990, the Paxos algorithm was proposed by Leslie Lamport, which is a consistency algorithm based on message transmission.
In 1991, Stuart Haber and WScott Stornetta proposed a protocol to ensure the security of digital files by using time stamps in 1991.
In 1997, Hash cash technology was invented by Adam Back.A PoW algorithm used by Hash Cash relies on the irreversibility of the cost function to achieve functions that are easy to verify but difficult to crack, and was first used to intercept spam.
In 1998, Dai Wei published the anonymous decentralized e-cash system b-money in 1998, introducing the PoW mechanism, emphasizing point-to-point transactions and tamper proof characteristics, and each node recorded its own account book.
In 2004, Hal Finney launched his own electronic currency, in which a reusable workload proof mechanism (RPoW) was used。
2. Birth and development of Bitcoin (2008-2010)
In September 2008, beginning with the collapse of Lehman Brothers, the financial crisis broke out in the United States and spread to the world.In response to the crisis, governments and central banks around the world have adopted unprecedented fiscal stimulus programs and expansionary monetary policies and provided emergency assistance to financial institutions. These measures have also aroused widespread doubts[45]。
On November 1, 2008, Nakamoto released a white paper on Bitcoin.
On November 16, 2008, Nakamoto released the first version of Bitcoin code.
On January 3, 2009, Nakamoto found the first block of Bitcoin - Genesis Block on a small server in Helsinki, Finland, and won the first batch of "mining" awards - 50 Bitcoins.
On January 11, 2009, Bitcoin client version 0.1 was released.
On January 12, 2009, the first Bitcoin transaction, Nakamoto Cong sent 10 Bitcoins to Hal Finney, an active developer in the field of cryptography。
On October 5, 2009, the exchange rate between the first Bitcoin and the US dollar was 1 US dollar=1309.03 Bitcoin, which was released by a user named "New Liberty Standard"[45]。The value of a Bitcoin is calculated as follows: the average power required by a computer with high CPU utilization for a year is 1331.5 kilowatt hours, multiplied by the average power cost of US residents in the previous year of 0.1136 dollars, divided by 12 months, divided by the number of Bitcoins produced in the past 30 days, and finally divided by 1 dollar.
On December 30, 2009, the mining difficulty of Bitcoin increased for the first time. In order to maintain the constant mining speed of one block every 10 minutes, the Bitcoin network made self adjustment, and the mining difficulty became even greater.
On May 22, 2010, a programmer bought two coupons for pizza with 10000 bitcoins.At that time
Bitcoin is worth only 0.005 cents.Later, many people called May 22 "Bitcoin Pizza Day"[45]。
On July 12, 2010, the price of Bitcoin fluctuated sharply for the first time. From July 12 to July 16, 2010, the exchange rate of Bitcoin experienced a 5-day period of sharp price fluctuations, rising from $0.008/Bitcoin to $0.08/Bitcoin, which was the first time that the exchange rate of Bitcoin experienced sharp price fluctuations.
On July 12, 2010, GPU mining began.As the exchange rate of Bitcoin continues to rise, active miners are looking for ways to improve their computing power.A dedicated graphics card has more power than a traditional CPU.It is said that miner ArtForz is the first person to successfully mine with personal OpenCL GPU in the mine.
On July 17, 2010, the first Bitcoin trading platform, MtGox was founded.
On August 6, 2010, the Bitcoin network protocol was upgraded.A major vulnerability in the Bitcoin protocol was discovered on August 6, 2010: transaction information was listed in the transaction record or blockchain without proper verification.This vulnerability was investigated and exploited, and 184 billion bitcoins were generated and sent to two bitcoin addresses.The illegal transaction was found quickly, and the vulnerability was repaired within hours. The illegal transaction in the transaction log was deleted, so the Bitcoin network protocol was upgraded to a newer version[33]。
On October 16, 2010, the first custody transaction occurred.Diablo-D3 and Nanotube, members of Bitcoin Forum, conducted the first recorded custody transaction on October 16, 2010, and the custodian was Theymos.
On December 5, 2010, Bitcoin intersected with the real financial community for the first time.During the leak of US diplomatic cables by WikiLeaks, the Bitcoin community appealed to WikiLeaks to accept Bitcoin donations to break the financial blockade.Nakamoto Cong expressed his firm opposition and believed that Bitcoin was still in its cradle and could not withstand conflicts and disputes.
On December 16, 2010, the Bitcoin pit appeared, and mining became a team sport. A group of miners dug out its first block in the slush pit on December 16, 2010.According to the amount of work they contributed, each miner was paid accordingly.In the following two months, the computing power of slush ore pool increased from 1400Mhash/s to 60Ghash/s.
3. Doubts and concerns about Bitcoin (2011-2014)
On February 9, 2011, Bitcoin was equivalent to the US dollar for the first time[3]。
On March 6, 2011, the whole network computing speed of Bitcoin reached 900G Hash/s, indicating the popularity of "mining".
On June 20, 2011, MtGox has a transaction loophole. One Bitcoin only sells for one cent, while the normal price before was about $15.On the one hand, Mt. Gox called on users to quickly change their passwords, and on the other hand, announced that all large order transactions in this abnormal period were invalid.
On June 29, 2011, BitPay, a Bitcoin payment processor, launched the first Bitcoin e-wallet for smart phones on June 29, 2011.
In July 2011, Bitomat, the world's third largest bitcoin exchange, lost 17000 bitcoins.
In August 2011, MyBitcoin was hacked, involving 49% of customer deposits and more than 78000 bitcoins.
On August 20, 2011, the first Bitcoin Conference was held in New York.
On August 14, 2012, the Central Bank of Finland recognized the legitimacy of Bitcoin.
On September 27, 2012, the Bitcoin Foundation[25]。
On November 25, 2012, the first Bitcoin Conference in Europe was held.
On November 28, 2012, the block award was halved for the first time.
On December 26, 2012, the French Bitcoin Central Exchange was born.
On July 30, 2013, Thailand banned Bitcoin.
On August 19, 2013, Germany recognized the legitimacy of Bitcoin.
On November 29, 2013, the price of Bitcoin exceeded that of gold for the first time.
In December 2013, Alipay stopped accepting Bitcoin payments.
On December 5, 2013, five ministries and commissions including the People's Bank of China issued the Notice on Preventing Bitcoin Risks, which clearly stated that Bitcoin does not have the same legal status as currency and cannot and should not be used as currency in the market.After the notice was sent, the unit price of Bitcoin fell sharply on that day [83].
On December 18, 2013, the unit price of Bitcoin plummeted.China's two major bitcoin trading platforms, Bitcoin China and OKCoin, announced the suspension of RMB recharge services.Subsequently, the unit price of Bitcoin fell to 2011 yuan.
At the end of 2013, Vitalik Buterin, the founder of Ethereum, released the first white paper of Ethereum and launched the project.
On July 9, 2014, Wojciech Kowalczyk, Deputy Minister of Finance of Poland, issued a document confirming that Bitcoin can be used as a financial instrument under the existing financial regulations in Poland.
On July 12, 2014, France released new regulations on Bitcoin.The French economic and financial sector said that it would implement regulatory measures for financial institutions and individual users of special currency and other digital currencies at the end of the year.
From July 24, 2014, Ethereum held a 42 day pre-sale of Ether coins.
On December 11, 2014, Microsoft accepted Bitcoin payment.
4. Blockchain becomes a hot topic (2015-2023)
In 2015, Bitcoin broke through the whole network of 1P Hash/s.
In 2015, IBM announced to join the open book project.
In 2015, Microsoft announced its support for blockchain services.
In June 2015, Bank of Tanzania conducted blockchain experiment.
On October 22, 2015, EU Bitcoin was exempted from VAT.
On December 16, 2015, Bitcoin securities were issued.The US Securities and Exchange Commission approved the online retailer Overstock to issue shares of the company through the Bitcoin blockchain.
At the beginning of 2016, the technology of Ethereum was recognized by the market, and the price began to rise sharply, attracting a large number of people other than developers to enter the world of Ethereum.
On April 5, 2016, OpenBazaar, a decentralized e-commerce protocol, was launched.
On May 25, 2016, Japan recognized Bitcoin as property.
In June 2016, the General Principles of the Civil Law defined the protection scope of virtual assets.The 21st meeting of the Standing Committee of the 12th National People's Congress was held in Beijing in June 2016. The meeting considered for the first time the explanation of the proposal of the General Principles (Draft) of the Civil Law of the People's Republic of China submitted by the Chairman of the Standing Committee of the National People's Congress.The draft stipulates new objects of civil rights such as network virtual property and data information, which means that network virtual property and data information will officially become objects of rights, and network virtual property such as Bitcoin will be formally protected by law[32]。
On July 20, 2016, Bitcoin rewards were halved twice.
In February 2017, the digital currency DCEP of the People's Bank of China was put into trial operation.The People's Bank of China may become the first central bank in the world to issue digital currency and put it into real application.
On February 26, 2017, China Blockchain Application Research Center (Shanghai) was officially inaugurated.
On March 24, 2017, Alibaba and PricewaterhouseCoopers signed a mutual trust framework cooperation on cross-border food traceability, which will jointly build a transparent and traceable cross-border food supply chain and a safer food market by applying blockchain and other new technologies.
In April 2017, Tencent released a white paper on blockchain solutions, aiming to create blockchain ecology.
On April 1, 2017, Bitcoin officially became a legal payment method in Japan.
On April 25, 2017, the first "blockchain farm" promotion conference was held in Shanghai.
On May 31, 2017, Firecoin and OKCoin, two of China's three major bitcoin exchanges, officially launched Ethereum.
In the afternoon of September 4, 2017, seven ministries and commissions including the People's Bank of China jointly announced that ICO is an unauthorized illegal financing act.ICO is suspended in China[32]。
In 2018, the price of Bitcoin dropped from the highest $19000 to more than $3000, a drop of more than 80%.
At the beginning of 2018, Facebook CEO Mark Zuckerberg announced to explore encryption technology and virtual cryptocurrency technology, and Amazon, Google, IBM and others also entered the arena.In terms of the domestic market, domestic Internet giants such as Tencent, JD, Alibaba, etc. have also successively announced their involvement in blockchain, and Xunlei has realized enterprise transformation and rapid business growth by pre arranging cloud computing and blockchain[10]。
On January 22, 2018, relevant people from the British Technology Development Department said that the UK would invest 19 million pounds to support new products or services in emerging technology fields such as blockchain.
On January 27, 2018, the founding ceremony of "CIFC Blockchain Alliance" was held in Beijing.
On March 11, 2018, the "Second CIFC Blockchain Technology and Application Practice Closed Door Meeting" was held.
On March 31, 2018, the "2018 First 'Blockchain+' 100 People Summit and CIFC Blockchain and Digital Economy Forum" was held.
On the afternoon of April 9, 2018, Xiong'an 10 billion yuan fund was established. The launching ceremony of China Hangzhou Blockchain Industrial Park was held in Hangzhou Future Science and Technology City. The first batch of 10 blockchain industrial enterprises signed contracts and settled in.
In April 2018, Baidu Totem was officially launched, enabling original works to be traceable, reprinted and monitored.The next month, Baidu Encyclopedia was put on the chain, making use of the tamper proof feature of the blockchain to keep the historical version of the encyclopedia accurate.
On May 12, 2018, Wuzhen Puzhong Blockchain College was officially inaugurated.
On May 25, 2018, 360 released its security solution for the blockchain field for the first time.This scheme is based on 360's security big data, combined with 360's security brain, and covers four fields: wallet, exchange, mining pool, and smart contract.
On May 28, 2018, Chinese President Xi Jinping delivered an important speech at the 19th Academician's Conference of the Chinese Academy of Sciences and the 14th Academician's Conference of the Chinese Academy of Engineering, saying that blockchain, artificial intelligence, quantum information, mobile communication, and the Internet of Things are all representatives of the new generation of information technology.
At the end of May 2018, 24 provinces, cities or regions, including Beijing, Shanghai, Guangdong, Hebei (Xiong'an), Jiangsu, Shandong, Guizhou, Gansu and Hainan, issued blockchain policies and guidance, and several provinces included blockchain in the province's "13th Five Year Plan" strategic development plan and carried out the layout of blockchain industry chain [82].
On June 25, 2018, Ant Financial announced the launch of e-wallet cross-border remittance business based on blockchain technology. For the first time, the cross-border business was carried out in Hong Kong and the Philippines in personal transfer business, so that the remittance from Hong Kong to the Philippines could reach the account in three seconds.
On September 3, 2018, the Supreme People's Court issued the Provisions on Several Issues Concerning the Trial of Cases by Internet Courts, which for the first time confirmed that the data on the chain can be used as the basis for judicial admissibility.
In January 2019, Baidu used blockchain and other technologies to upgrade Beijing Haidian Park and launched the first AI park in China[4]。
On June 18, 2019, Facebook led the release of Libra white paper, a global digital cryptocurrency project.
In September 2019, Germany released its "National Blockchain Development Strategy".
In November 2019, the European Commission announced a new investment plan for European AI and blockchain focused start-ups.
In February 2020, Australia released the National Blockchain Development Roadmap.
In March 2020, the Ministry of Science and ICT of South Korea announced the launch of the Blockchain Technology Verification Support Plan 2020.
In the 14th Five Year Plan for National Economic and Social Development of the People's Republic of China and the Outline of Vision Goals for 2035, released in March 2021, blockchain is listed as one of the seven emerging digital industries, clearly proposing three key tasks of blockchain technology innovation, application development, and improvement of regulatory mechanism, with particular emphasis on the development of financial technology applications with the alliance chain as the focus[31]。
On July 19, 2021, the Information Center of the Ministry of Agriculture and Rural Affairs led the pilot project of "blockchain+chives" in Weifang, Shandong Province.
In January 2022, the Asian Development Bank formed an alliance with Southeast Asian countries, Japan, China and South Korea to realize data interconnection between central banks and securities depositories in the "10+3" region based on the blockchain.
In May 2022, the Supreme People's Court issued the Opinions on Strengthening the Judicial Application of Blockchain, proposing to give full play to the role of blockchain in promoting judicial credibility, serving social governance, preventing and resolving risks, promoting high-quality development, comprehensively deepen the construction of smart courts, and promote the modernization of the judicial system and capacity[26]。
In September 2022, Ethereum will complete the merger and upgrade, move from PoW consensus to PoS consensus, significantly improve its performance, security and scalability, and reduce energy consumption by 99.95%[29]。
In September 2022, the number of popular blockchain projects (with more than 300 attention) on Github will reach 761.
In October 2022, the General Office of the State Council issued the guidelines for the construction of the national integrated government big data system, proposing to actively use cloud computing, blockchain, artificial intelligence and other technologies to improve data governance and service capabilities, accelerate the digital transformation of the government, and provide more digital services.
On May 16, 2023, the BSIM card (blockchain SIM card) jointly developed by Shanghai Shutu Blockchain Research Institute and China Telecom Research Institute was released in Shanghai.The storage space of the BSIM card is 10 to 20 times larger than that of the SIM card, and its computing power is dozens of times higher, enabling the generation and storage of users' public and private keys in the card[41]。
On May 25, 2023, the opening ceremony of the 2023 Zhongguancun Forum released ten major scientific and technological achievements, including blockchain and quantum computing.
On August 25, 2023, the 2023 China Industrial Blockchain Summit was held in Gulou District, Nanjing, and the China Industrial Blockchain Development Report (2023) and 2023 China Industrial Blockchain Ecological Map were released.The Report on the Development of China's Industrial Blockchain (2023) shows that in 2022, important international blockchain policies will decline compared with the past, and the industrial blockchain will transition from policy led to industry driven.However, the number of blockchain patent applications in 2022 is still at a high level, and technology and application innovation are still in a period of rapid development[40]。
In September 2023, there will be more than 530000 enterprises involved in cloud computing, big data, artificial intelligence, blockchain and other digital technologies.From the perspective of key projects of the industrial chain supply chain digital economy, the number of new key projects will reach 912 in 2022, accounting for about 46.18%, and the number of new key projects will maintain rapid growth[28]。
On November 1, 2023, the blockchain project TON launched by the social platform Telegram reached the highest block output speed in history, with the fastest record of 108409 blocks per second[42]。
Classification of blockchain
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According to the degree of decentralization, the blockchain system can be divided into three categories: public chain, alliance chain and private chain[5]The comparison of these three types of blockchains is shown in the following table.
Comparison of three types of blockchain
features
Public chain
Alliance chain
Private chain
participant
Free access for anyone
Enterprise or alliance member
Individual or internal company
Consensus mechanism
PoW/PoS/DPoS, etc
Distributed consistency algorithm
Distributed consistency algorithm
excitation mechanism
need
Optional
unwanted
Centralization degree
Decentralization
Polycentric
(Multi) Centralization
Data consistency
Probabilistic (weak) consistency
Determine (strong) consistency
Determine (strong) consistency
network size
large
more
Small
Transaction processing capability
3~20/s-1
1000~10000/s-1
1000~200000/s-1
Typical applications
Cryptocurrency and certificate
Payment and liquidation
audit
Public chain
Because the public chain system is open to nodes, and the public chain is usually large in size, it is difficult to reach consensus, with low throughput and efficiency.In the public chain environment, because the number of nodes is uncertain and the identity of nodes is unknown, in order to ensure the reliability and credibility of the system, it is necessary to determine appropriate consensus algorithms to ensure data consistency and design incentive mechanisms to maintain the continuous operation of the system.Typical public chain systems include Bitcoin and Ethereum.
Alliance chain
Alliance chain is usually composed of multiple different institutions with the same industry background. Its application scenarios include payment and settlement between multiple banks, supply chain management between multiple enterprises, information sharing between government departments, etc.The consensus nodes in the alliance chain come from various organizations in the alliance, and provide node review and verification management mechanisms. The number of nodes is far less than that of the public chain, so the throughput is high, and millisecond level confirmation can be achieved;The data on the chain is only shared within the alliance, which has better security and privacy protection.The alliance chain includes Hyperledger, Fabric, Corda platform and Enterprise Ethereum Alliance.
Private chain
The private chain is usually deployed in a single organization, which is suitable for internal data management and audit. Consensus nodes are all from within the organization.The private chain generally has a smaller network size, so it is more efficient than the federated chain, and even has the same performance as the centralized database.Due to the restriction of access threshold, the alliance chain and private chain can effectively reduce the risk of disruption by malicious nodes and easily achieve strong consistency of data.
Blockchain architecture
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In 2016, Yuan Yong and Wang Feiyue proposed the "six layer model" of blockchain infrastructure[22]From the bottom to the top are the data layer, the network layer, the consensus layer, the incentive layer, the contract layer and the application layer.The data layer includes block structure, data encryption and other technologies;The network layer includes network structure, data transmission technology and verification mechanism;The consensus layer includes the consensus mechanism between multiple network nodes such as PoW (proof of workload), PoS (proof of equity), DPoS (proof of authorized shares), etc;The incentive layer includes the issuance and distribution mechanism of incentives;The contract layer includes various script codes and smart contracts;The application layer includes digital currency and other application scenarios.
"Six tier model" of blockchain infrastructure
Data layer
The data layer is responsible for the blockchain data structure and physical storage. The data structure of the blockchain is represented as the blockchain list in which transactions are sorted.The block records the transaction records in a period of time, encapsulates the transaction records received in a period of time into a data block, and contains the metadata of the block in the block head, which mainly includes the current version of the block, the hash value of the parent blockMerkle tree root hash (used to effectively summarize the data structure of all transactions in the block), block creation time, block current difficulty and a random value) block header is used to verify the effectiveness of the block.Each block header is connected to the previous block, which makes every transaction in the block well documented. The hash value of the block can uniquely identify the block, and link the block into a chain according to the hash pointer in the block header, that is, the blockchain.
Block structure
Blockchain usually stores dataHash valueInstead of saving the original data directly.Since the hash function can not reverse deduce the input value, the calculation process consumes about the same time, the length of the output value is fixed, and any change in the input will lead to significantly different outputs, so it is very suitable for storing block data.For example, Bitcoin usually uses a double SHA256 hash function.
Merkle tree is an important data structure of the blockchain data layer. Hash values of transactions in the blockchain are stored as part of the Merkle tree.Merkle tree summarizes all transactions in the block by generating digital fingerprints of the entire transaction set, so that users can verify whether transactions are included in the block.Merkle tree records the hash value layer by layer, so that any change in the underlying data will be transmitted to its parent node, layer by layer along the path to the tree root, which means that the value of the tree root actually represents the digital summary of all the underlying data, realizing the tamper resistance of the transaction data in the block.Merkel tree makes the block header only need to contain the root hash value, instead of encapsulating all the underlying data, thus greatly improving the operational efficiency and scalability of the blockchain.In addition, the Merkel tree supports "simplified payment verification", which can complete data verification without running a complete blockchain network node.
network layer
The network layer realizes the information exchange between nodes in the blockchain network, which belongs to the distributed storage technology.The point-to-point mechanism, data propagation mechanism, data verification mechanism, distributed algorithm and encryption signature of blockchain are all implemented in the network layer.There is no central node in the blockchain network, and transactions can be directly conducted between any two nodes, and each node can freely join or exit the network at any time. Therefore, the blockchain platform usually chooses a fully distributed P2P protocol that can tolerate a single point of failure as the network transmission protocol.
P2P protocol of blockchain network is mainly used to transmit transaction data and block data between nodes.In the blockchain network, each node has the characteristics of equality, divide and conquer, distribution, and other functions, such as route discovery, broadcast transactions, and discovery of new nodes. There is no centralized authoritative node and hierarchical structure.The nodes maintain communication by maintaining a common blockchain structure and jointly maintain the entire blockchain ledger.According to the amount of data stored in nodes, nodes can be divided into full nodes and lightweight nodes. Full blockchain data is stored in the whole node, and the main chain is dynamically updated in real time. This has the advantage of independently completing the verification, query and update of block data. The disadvantage is that the space cost is high;Lightweight nodes only save part of the block data, and need to obtain the required data from adjacent nodes to complete block data verification.
The node monitors the data broadcast in the network at all times. When a new block is generated, the node generating the block will broadcast to the whole network. When other nodes receive new transactions and new blocks sent, they will first verify whether these transactions and blocks are valid, including digital signatures in transactions, workload proof in the block, etc,Only verified transactions and blocks will be processed and forwarded to prevent the continued propagation of invalid data.
Consensus layer
The consensus layer is responsible for enabling highly decentralized nodes to reach consensus on the effectiveness of block data efficiently in the decentralized blockchain network, and encapsulating various consensus algorithms used in the blockchain system.The core of the blockchain system is the maintenance of blockchain ledger data. Therefore, the process of consensus is the process of verifying and updating the ledger at each node. The result of consensus is that the system provides a unified ledger externally.
Since the blockchain system does not limit the identity of the participating nodes, the nodes in the network may cheat and do evil for the sake of benefits. Therefore, in order to avoid malicious nodes, the system requires that each accounting needs to pay a certain price, while the rest of the nodes can be verified at a very small price."Cost" has many forms, such as computing resources, storage resources, special hardware, etc.The formula algorithm mechanism includes proof of work (PoW), proof of equity (PoS), proof of authorized shares (DPoS), etc.
The workload proof requires that each node use its own computing power to solve the SHA256 calculation problem and find a suitable random
The number makes the SHA256 hash value of the metadata in the block header less than the set value of the difficulty target in the block header, and the more difficult the target is
The more difficult it is to find the appropriate random number, the first node found can obtain the accounting right of the new block and get rewards.It is difficult to solve the SHA256 computing problem, but the verification is very easy, so that other nodes can quickly verify the new block. If it is correct, add the block to the blockchain and start building the next block.PoW mechanism integrates reward and consensus process, enables more nodes to participate and maintain integrity, thus enhancing the reliability and security of the network.For the PoW mechanism, if you want to tamper with and forge a block in the blockchain, you must re find the random number of block headers for the block and all subsequent blocks, and make the length of the branch chain exceed the main chain every day. This requires that the attacker master at least 51% of the computing power of the whole network, so the attack is very difficult.The essence of PoW mechanism is to exchange data consistency and security by sacrificing performance, so the performance of blockchain platform based on PoW mechanism is relatively low.
Proof of equity is an algorithm that uses token information held by nodes to select bookkeeping nodes.In the form of election, any node is randomly selected to verify the next block. To become a verifier, the node needs to deposit a certain amount of money in the network as equity. The share of equity determines the probability of being selected as a verifier, so that the next block can be created.The verifier will check whether the transaction in the block is valid. If it is valid, the block will be added to the blockchain. At the same time, the node will gain some benefits. If it passes an illegal transaction, the node will lose some of its rights, so that the node will be honest in bookkeeping for the purpose of protecting its own rights.Compared with PoW, PoS solves the problem of wasted computing power, and can shorten the time required to reach consensus, which makes many digital currencies adopt the PoS consensus mechanism.
The authorized share certificate is evolved from PoS. The nodes with digital currency obtain votes by pledging tokens, and select some nodes as outgoing nodes by voting. They are responsible for packaging transactions to generate blocks, so that more capable nodes are competent to generate blocks, similar to the company's board of directors system.In each round of consensus, a node is selected from the outgoing nodes in turn to generate a block, and broadcast to other blocks for verification.If the node cannot complete the task of generating blocks within the specified time or the generated blocks cannot be verified, it will be disqualified.Different from the trusted high computing nodes in the PoW mechanism and the trusted high equity nodes in the PoS mechanism, each node in the DPoS mechanism can independently select the trusted nodes, greatly reducing the number of nodes involved in accounting and verification, and realizing rapid consensus verification.
Incentive layer
The incentive layer mainly includes the issuance mechanism and distribution mechanism. It encourages nodes to participate in the security verification of the blockchain by rewarding some digital assets, so as to maintain the continuous mining activities and account book updates.Consensus nodes in the decentralized system are all aimed at maximizing their own interests, so it is necessary to make the maximization of their own interests coincide with the goal of ensuring the security and effectiveness of the blockchain system.
The public chain relies on the nodes of the whole network to jointly maintain data, and the nodes do not need to be authenticated. They can join and exit the network at any time, CPU, storage, bandwidth and other resources. Therefore, there needs to be a certain incentive mechanism to ensure that miners can benefit from the consumption of bookkeeping during the bookkeeping process, so as to ensure that the entire blockchain system is developing in a virtuous circle.In the alliance chain, all nodes are nodes that have been authenticated by the organization, and do not need additional incentives. These nodes will also spontaneously maintain the security and stability of the entire system.
Taking the Bitcoin system as an example, the issuance mechanism means that the number of bitcoins issued by each block decreases periodically over time. After every 210000 blocks, the number of bitcoins issued by each block is halved, and eventually the total number of bitcoins reaches the upper limit of 21 million. At the same time, each bitcoin transaction will generate a small amount of fees.The PoW consensus will use the newly issued bitcoin and transaction fees as incentives to reward the nodes that successfully find the appropriate random number and complete the block packaging work. Therefore, only all consensus nodes jointly maintain the effectiveness and security of the bitcoin system will their own bitcoin be valuable.The distribution mechanism means that a large number of small computing power nodes join the ore pool, improve the probability of digging a new block through cooperation, and share the bitcoin and commission rewards of the block.
Contract layer
The contract layer is responsible for encapsulating the script code, algorithm and smart contract of the blockchain system, which is the basis for implementing the blockchain system programming and operating data.The earlier Bitcoin system uses non Turing complete simple script code to realize the transaction process of digital currency, which is the embryonic form of smart contract. At present, Ethereum has realized Turing complete smart contract script language, enabling blockchain to realize more applications such as macro finance and social systems.
A smart contract is a digital protocol that uses algorithms and programs to write contract terms, is deployed on the blockchain, and can be automatically executed according to rules.In an ideal state, a smart contract can be regarded as a Turing machine, a program that can be automatically executed according to the rules in advance, without human intervention.It exists to enable a group of complex digital commitments with trigger conditions to be correctly executed according to the will of participants.
The blockchain system provides a trust environment, enabling the concept of smart contract to be realized. After all users reach an agreement on the rules, they create a contract code and link the contract code. Once the trigger conditions are met, the contract code will be executed by the miners according to the preset rules.The decentralization of the blockchain enables the smart contract to run at all nodes of the whole network at the same time without the participation of the central manager, and no organization or individual can forcibly stop it.Smart contracts expand the functions of blockchain, enrich the upper application of blockchain, and allow trusted transactions without a third party. These transactions are traceable and irreversible.
application layer
The applications on the Bitcoin platform are mainly digital currency transactions based on Bitcoin.In addition to the digital currency transactions based on Ethereum, Ethereum also supports Decentralized Application (Dapp), which is a web front-end application built by JavaScript and communicates with smart contracts running on Ethereum nodes through JSON-RPC.Hyperledger Fabric is mainly targeted at enterprise blockchain applications and does not provide digital currency. Its applications can be built based on SDKs in Go, Java, Python, Node.js and other languages[24], and communicate with the smart contract running on the Hyperledger Fabric node through gRPC or REST.
Typical blockchain system
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Bitcoin
Bitcoin is a cryptocurrency based on decentralization, adopting point-to-point network and consensus initiative, open source code, and taking blockchain as the underlying technology. It is the first system to apply blockchain technology.Bitcoin system is an electronic payment system. It is not based on the credit of authoritative institutions, but based on the principles of cryptography, so that any agreed transaction parties can pay directly without the participation of any third party institutions.The main concepts of Bitcoin include transaction, timestamp server, workload proof, network, incentive, etc.
Transaction is the most important part of Bitcoin system.Everything else in Bitcoin is to ensure that transactions can be created, spread on the network, verified, and finally added to the global transaction ledger (blockchain).The essence of Bitcoin transaction is data structure, which is the code of value transmission of participants in Bitcoin transaction.The Bitcoin blockchain is a global double entry ledger, and every Bitcoin transaction is a public record on the Bitcoin blockchain.Bitcoin defines electronic currency as a digital signature chain. The transfer of currency is realized by the owner signing the public key of the previous transaction and the next owner, and putting these two signatures at the end of the currency.The payee can verify the chain ownership by verifying the signature.
Bitcoin adopts asymmetric encryption technology. The public key is the user's account number. When users want to consume Bitcoin, they need to sign with the private key. The system will use the account number, that is, the public key, to verify whether the signature is correct, and calculate the real amount in the current account from historical transactions according to the user's account number,To ensure that the funds operated by the user are within the true amount of the account, each transaction record needs to be signed with the private key. The system uses the public key to verify whether the signature is correct, and if it is verified to be correct, it is considered legal. Then it verifies whether the transfer amount in the inserted record is correct. The verification method is to calculate all previous transaction records of the public key to obtain the current amount of the account,It is legal if it does not exceed the amount.This mechanism ensures that only one's own account can be operated. Combined with the ultimate consistency principle under the P2P network structure and the chain structure of the ledger, an attacker needs more computing power than the current cluster to create another ledger branch, and the attacker can only change his own account, so the benefit of this attack is extremely low. For the Bitcoin system,The powerful computing power makes the Bitcoin system more stable.
Bitcoin enables each node to solve a complex but simple SHA256 mathematical problem through the workload proof mechanism of computing power competition. The node that solves the problem the fastest will get the block accounting right and the Bitcoin generated by the block as a reward.This problem can be understood as finding a suitable random number (Nonce) through brute force search according to the current difficulty value, so that the double SHA256 value of each metadata in the block header is less than or equal to the target value.The Bitcoin system will automatically adjust the difficulty value to ensure that the average time for block generation is 10 minutes.The qualified hash value of the block header is usually composed of multiple leading zeros. The higher the difficulty value, the more leading zeros of the hash value of the block header, and the more difficult it is to successfully find a suitable random number and dig out a new block.
Bitcoin adopts a peer-to-peer (P2P) network architecture based on the Internet. Each node in the network is equal, without any centralized services and hierarchical structure, and is interconnected in a flat topology.When a new block is generated, the node generating the block will broadcast the block data to the network for verification by other nodes.Bitcoin's block data transmission mainly includes the following steps.
(1) Broadcast new transactions to all nodes of the whole network.
(2) Each node will collect new transactions and package them into a block.
(3) Each node is committed to finding a difficult workload proof for its block.
(4) When a node finds the workload proof, it broadcasts the block to all nodes.
(5) Only when all transactions in the block are valid and have not existed before, other nodes will accept the block.
(6) Other nodes create new blocks in the chain by using the hash value of the accepted block as the previous hash value to indicate that they have accepted the block.
All nodes regard the longest chain as the correct chain, and continue to extend it. If two nodes broadcast different new blocks at the same time, then both blocks will remain, and branches appear on the chain. When each branch continues to grow, all nodes will select the longest branch as the main chain, and continue to create blocks behind it.
The first transaction of each block of bitcoin includes the newly issued bitcoin and other transaction fees paid to the creator, which will encourage nodes to support the bitcoin system more. This is a method of distributing electronic currency to the circulation field without a centralized authority to issue currency, similar to gold mining to inject gold into the circulation field.The incentive system is conducive to keeping the nodes honest. If a malicious attacker has more final accounting power than an honest node, he will find that destroying the system will damage his own wealth, while keeping honest will allow him to obtain more electronic money.
Ethereum
Ethereum is an innovation that applies the technologies and concepts in Bitcoin to the computing field.Bitcoin is considered a system that maintains a shared account book that securely records all Bitcoin bills.Ethereum uses many mechanisms similar to Bitcoin (such as blockchain technology and P2P network) to maintain a shared computing platform, which can flexibly and securely run any program users want (including blockchain programs similar to Bitcoin).The characteristics of Ethereum include the following aspects.
1. Ethereum account
In the Ethereum system, the status is composed of the object called "account" (each account has a 20 byte address) and the status transition of transferring value and information between two accounts.Ether is the main cryptocurrency in Ethereum, which is used to pay transaction costs.Generally speaking, Ethereum has two types of accounts: externally owned accounts (controlled by the private key) and contract accounts (controlled by the contract code).All external accounts have no codes. People can send messages from an external account by creating and signing a transaction.Whenever the contract account receives a message, the internal code of the contract will be activated, allowing it to read and write to the internal storage, send other messages, or create a contract.
2. Messages and transactions
The message of Ethereum is similar to the transaction of Bitcoin to some extent, but there are three important differences between the two.
First, Ethereum messages can be created by external entities or contracts, while Bitcoin transactions can only be created externally.Second, Ethereum messages can include data.Third, if the receiver of the Ethereum message is a contract account, you can choose to respond, which means that the Ethereum message also contains the concept of function.In Ethereum, "transaction" refers to the signature data packet that stores messages sent from external accounts.The transaction includes the receiver of the message, the signature used to confirm the sender, the Ether account balance, the data to be sent, and two values called STARTGAS and GASPRICE.
3. Code execution
The code of Ethereum contract is written in low-level stack based bytecode language, and is called "Ethereum virtual machine code" or "EVM code".The code consists of a series of bytes, each of which represents an operation.Generally speaking, code execution is an infinite loop. Every time the program counter increases by one (the initial value is zero), the operation will be executed until the code is executed or an error is encountered.
4. Application
Generally speaking, there are three types of applications on Ethereum.The first is financial applications, which provide users with more powerful ways to manage and participate in contracts with their money, including sub currencies, financial derivatives, hedging contracts, savings wallets, wills, and even some kinds of comprehensive employment contracts.The second type is semi financial applications, where there is money, but also a large proportion of non money. A perfect example is the self imposed reward for solving computing problems.The third category is completely non-financial applications such as online voting and decentralized governance.
A variety of financial contracts - from simple digital applications of physical assets (gold, stocks) to complex financial derivatives applications, more secure update and maintenance applications for Internet infrastructure (such as DNS and digital authentication),It does not rely on the personal online identity management application of the centralized service provider (because the centralized service provider is likely to leave some kind of back door to spy on personal privacy).In addition to hundreds of blockchain applications that have been implemented by many entrepreneurial teams, Ethereum is also used by some financial institutions, bank consortia, and similar companies such as SamsungLarge companies such as Deloitte, RWE and IBM have paid close attention to this, which has also spawned a batch of blockchain applications such as simplified and automated financial transactions, merchant loyalty index tracking, gift cards aimed at achieving decentralization of electronic transactions.
Libra
Libra (renamed Diem) is a payment system proposed by Facebook, which aims to establish a simple, borderless currency and financial infrastructure for billions of people.Libra consists of three parts, which work together to create a more inclusive financial system:
(1) It is based on a secure, scalable and reliable blockchain;
(2) It is backed by the asset reserves that endow it with intrinsic value;
(3) It is governed by an independent Libra Association whose mission is to promote the development of this financial ecosystem.
The Libra/Diem coin is based on a secure, scalable and reliable blockchain, supported by a reserve consisting of cash, cash equivalents and very short-term government securities, and managed, developed and operated by independent Libra/Diem associations and their affiliated networks.It is intended to target a global audience, so the software to implement the Libra/Diem blockchain is open source, so that everyone can develop on this basis, and billions of people can rely on it to meet their financial needs.With the proliferation of smart phones and wireless data, more and more people will access the Internet and use Libra/Diem through these new services.In order to enable the Libra/Diem network to realize this vision over time, the Libra/Diem Association has built the blockchain it needs from scratch, while giving priority to scalability, security, storage efficiency, throughput and its adaptability to the future.
The Libra/Diem payment system supports a single currency stable currency and a multi currency stable currency, which are collectively referred to as Libra/Diem currency.Each single currency stable currency will be supported by 1:1 reserves, while each multi currency stable currency is a combination of multiple single currency stable currencies, which inherits the stability of these stable currencies.The reserves of Libra/Diem will be managed and the value of Libra/Diem coins will be maintained over time.
Through the evaluation of the existing scheme, Libra/Diem decided to build a new blockchain based on the following three requirements: design and use the Move programming language;Byzantine fault-tolerant consensus mechanism;Adopt and iteratively improve the widely used blockchain data structure.
1. Design and use the Move programming language
Move is a new programming language used to implement custom transaction logic and "smart contract" in the Libra/Diem blockchain.The design of Move language first considers security and reliability. It is a programming language created by learning experience from the security events related to smart contracts that have occurred so far. In essence, it makes it easier to write code that conforms to the author's intent, thus reducing the risk of unexpected vulnerabilities or security events.Specifically, Move is designed to prevent digital backup from being copied.It makes it possible to limit digital assets to "resource types" with the same attributes as real assets: each resource has only one owner, resources can only be spent once, and limits the creation of new resources.
2. Use Byzantine fault-tolerant consensus mechanism
The Libra/Diem blockchain adopts the BFT mechanism based on the Libra/Diem BFT consensus protocol to achieve the agreement of all verifier nodes on the transactions to be executed and their execution order.This mechanism achieves three important goals: First, it can establish trust in the network, because even some verifier nodes (at most one third of the network) are damaged or failThe design of BFT consensus protocol can also ensure the normal operation of the network;Second, compared with the "workload proof" mechanism used in some other blockchains, this kind of consensus protocol can also achieve consensus methods with high transaction processing capacity, low latency and higher energy efficiency;Third, the Libra/DiemBFT protocol helps to clearly describe the finality of the transaction, so when participants see the transaction confirmation of a sufficient number of verifiers, they can ensure that the transaction has been completed.
The safety of BFT depends on the quality of verifiers, so the Association will investigate potential verifiers.The design of the Libra/Diem network is based on the principle of security first, and considers complex networks and attacks on key infrastructure.The structure of the network is to strengthen the assurance of the verifier to run software, including the use of key code separation and other technologies, innovative methods to test consensus algorithms, and careful management of dependencies.Finally, the Libra/Diem network defines the strategy and process of reconfiguring the Libra/Diem blockchain when serious vulnerabilities occur or upgrades are needed.
3. Adopt and iteratively improve the widely adopted blockchain data structure
Merkle Tree is a data structure that has been widely used in other blockchains. It can detect any change in existing data.In order to ensure the security of the stored transaction data, the Merkel tree can be used to find out whether the transaction data has been tampered in the Libra/Diem blockchain.Unlike blockchain projects that used to regard blockchain as a collection of transaction blocks, Libra/Diem blockchain is a single data structure that can record transaction history and status for a long time.This implementation method simplifies the workload of accessing blockchain applications, allows the blockchain system to read any data from any point in time, and uses the unified framework to verify the integrity of the data.
According to the above design, the Libra/Diem blockchain can provide public verifiability, which means that anyone (verifier, Libra/Diem network, virtual asset service provider (VASP), law enforcement department or any third party) can review the accuracy of all operations.The transaction will be signed in an encrypted manner, so that even if all verifiers are destroyed, the system cannot accept forged transactions with signatures.The Association will supervise the development of Libra/Diem blockchain protocols and networks, and constantly evaluate new technologies while applying regulatory requirements to enhance privacy compliance on the blockchain.
Blockchain technology
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Blockchain is an accounting technology jointly maintained by multiple parties, which uses cryptography to ensure the security of transmission and access, and can achieve consistent data storage, which is difficult to tamper with and prevent repudiation. It is also called distributed ledger technology.With the birth of the first public chain system Bitcoin, blockchain technology has also flourished, and many different blockchain systems have been born, and the differences between them can be seen from the aspects of whether the nodes need authentication to join, the consensus mechanism used, and so on.However, the overall idea and ultimate purpose of each blockchain system are similar, and its operating mechanism is also the same in the big framework.
Consensus mechanism
The blockchain system adopts a decentralized design. The network nodes are decentralized and independent of each other. In order to make all nodes in the network reach a consensus, that is, store the same blockchain data, a consensus mechanism is needed to maintain the consistency of data. At the same time, in order to achieve this goal, a reward and punishment mechanism needs to be set to stimulate the nodes in the blockchain.At present, there are many consensus algorithms used in the blockchain, among which the common ones are proof of work (PoW) algorithm, proof of entitlement (PoS) algorithm, and practical Byzantine fault tolerance (PBFT) algorithm.The following table shows the comparison of three consensus algorithms.
Comparison of three consensus algorithms
Consensus algorithm
PoW
PoS
PBFT
Node management
No license required
No license required
License required
Transaction delay
High (minute level)
Low (second level)
Low (millisecond level)
throughput
low
high
high
energy conservation
no
yes
yes
Security boundary
The malicious calculation power does not exceed 1/2
Malicious interests shall not exceed 1/2
No more than 1/3 of malicious nodes
Representative application
Bitcoin, Ethereum (old)
Ethereum (new), Diandian Coin
Fabric
Scalability
good
good
difference
Smart contract
The concept of smart contract has existed long before the birth of the first blockchain system. Nick Szabo, an American computer scientist, defines it as: "a meeting made jointly by contract participants, existing and executed in digital form." The original purpose of smart contract is to make the effectiveness of the contract no longer subject to the control of third-party authorities, but can be regulatedIt runs in the form of automation.Take borrowing money as an example. In real life, if the creditor wants to forcibly take back the borrowed money, he needs to take the name of borrowing to the court to appeal, and then he can get the money after a long trial process.In the smart contract, both parties of the contract can formulate rules on the number of borrowed money, repayment date, collateral and other conditions, and then put the contract into the relevant system. When the specified deadline is reached, the contract will automatically perform the repayment operation.
Although the concept of smart contract has been put forward, it has always lacked a good implementation platform.Until Nakamoto ran the Bitcoin system, its decentralized architecture, distributed trust mechanism and executable environment of underlying blockchain technology were very consistent with smart contracts.The blockchain can realize the complex behavior execution of nodes through smart contracts, and smart contracts can be better trusted and easier to execute in the decentralized architecture of the blockchain.Therefore, the combination of smart contract and blockchain technology has become a research topic for many researchers and scholars, and smart contract and blockchain are gradually bound together.
The smart contract mentioned today is usually directly bound with the blockchain technology, specifically a computer program that runs in a distributed ledger and has processes such as rule presetting, contract on chain, condition response, and can complete asset transfer, currency transaction, and information transmission functions.Now Turing's complete smart contract development platform has come out, and has received a good response, such as Ethereum, Super Ledger Fabric and other projects.Ethereum is one of the most influential shared and distributed platforms in the world.
A smart contract is a piece of code running on the blockchain. The logic of the code defines the content of the contract. The contract is deployed in the blockchain. Once it meets the conditions, it will be automatically executed, and no one can change it.Contract code is a low-level stack based bytecode language, also known as "Ethereum Virtual Machine (EVM) code". Users can use high-level programming languages (such as C++Go、Python、Java、Haskell，Or Solidity and Serpent languages specially developed for smart contracts), which are converted into bytecode by the compiler, deployed in the Ethereum blockchain, and finally run in EVM.The following is a section of code for auction smart contracts written in Solidity language.
contract SimpleStorage {
uint storedData;
function set (uint x) public {
storedData = x;
}
function get() public view returns(uint) {
return storedData;
}
}
The function of this instance is to set an open variable and support access to other contracts.In this example, the contract declares an unsigned integer variable and defines a function to modify or retrieve the value of the variable.Other users can change or retrieve the variable by calling the function on the contract.If other users want to call an external contract, they need to create a transaction. The receiving address is the address of the smart contract. The data field fills in the function to be called and the code value of its parameters.The smart contract will automatically run according to the data filled in, and the smart contracts can also call each other.
Blockchain security issues
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Distributed denial of service attack
Distributed denial of service attacks mainly target exchanges, ore pools, wallets and other financial services in the blockchain.Different from the denial of service (DoS) attack, the distributed denial of service attack uses the client/server technology to unite multiple computers as an attack platform and launch a large number of attack requests against the same target, thus doubling the ability of denial of service attacks.
Traditional distributed denial of service attacks invade a large number of hosts through viruses, trojans, buffer overflows and other attacks, forming a botnet, and then launch denial of service attacks through botnets.The distributed denial of service attack based on the blockchain network does not require the intrusion host to establish a botnet, but only needs to control a large number of online nodes in the blockchain network in the cascading network (application layer), making it an amplification platform for launching large-scale distributed denial of service attacks.These online nodes provide a large number of available resources for denial of service attacks, such as distributed storage and network bandwidth, making the attack cost low and powerful, and ensuring the confidentiality of the attacker.The main attack modes are active attack and passive attack.Active attack is to actively send a large number of false index information to nodes in the network, so that subsequent access to these information is directed to the attacker.Active attacks introduce additional traffic in the blockchain network, thus reducing the performance of network node lookup and routing. In addition, false index information also affects the file download speed.Passive attacks are non intrusive. By modifying the blockchain client or server software, passively wait for query requests from other nodes, and then return false responses to achieve the attack effect.
The launching cost of distributed denial of service attack is not high, but it is very destructive.For example, malicious miners can exhaust their competitors' network resources through distributed denial attacks, making competitors blocked by a large number of network requests, thus improving their effective hash rate.
Malleable attack
Extensive attack refers to the use of external false transactions to achieve attack under the condition that the original situation remains unchanged.For example, the transaction queue in the network can be blocked by the extended attack.Malicious attackers pay high commission fees to conduct fake transactions with high priority, so that when miners verify these transactions, they find that these transactions are fake transactions, but they have spent quite a long time on the verification of these transactions, thus wasting the time and bandwidth resources of miners competing with attackers.Another form of extension attack is transaction extension attack, which brings the risk of secondary deposit or double withdrawal in the case of virtual currency transactions.An attacker can listen to an unconfirmed transaction, change the transaction ID of the original transaction by modifying the transaction signature, and generate a new transaction for broadcast and confirmation, while the other party involved in the transaction cannot query the confirmation information of the transaction according to the original transaction ID, which may lead to repeated transfers and losses.
Sybil Attack
Witch attack refers to an attacker node that illegally owns multiple identity marks by broadcasting multiple identity information to the network, further uses the convenience of multiple identities to do some malicious acts, such as changing the transaction order, preventing transactions from being confirmed, misleading the routing table of normal nodes, consuming connection resources between nodes, etc.Because nodes on the network can only judge the global information of nodes in the network according to the messages they receive, it is convenient for attackers to use this feature to easily create a large number of identity information for witch attacks.
Witch attack is an effective means to attack the data redundancy mechanism in P2P networks, which makes the data that needs to be backed up in multiple nodes be spoofed back to the same node.At the same time, if the voting mechanism is used in the blockchain network, the attacker can use forged multiple identities to conduct unfair repeated voting, so as to control the network.To realize anti witch attack, workload proof mechanism can be used to increase the cost of witch attack by verifying the computing power of identity.Another anti witch attack method is identity authentication. Each new node needs to be authenticated by a reliable third party node or all reliable nodes in the current network, thus reducing the possibility of nodes fraudulently using multiple identities.
Routing attack
Due to the insecurity of network routing and the centralization of Internet Service Provider (ISP), blockchain applications (such as Bitcoin) that use clear text for information exchange may face the risk of traffic hijacking, information eavesdropping, discarding, modifying, injecting and delaying.Route attack refers to the means to interfere with the normal route to reach the attack target.
Routing attacks on the blockchain mainly include segmentation attacks and delay attacks.The segmentation attack first isolates the blockchain network into at least two independent networks, making them unable to exchange transaction information.In order to achieve this step, attackers often use the method of border gateway protocol hijacking to intercept all the traffic exchanged between different networks, so as to achieve network segmentation, and the nodes in each network are not aware of network interruption.The delay attack takes advantage of the feature that the block request will not be launched again until a certain time has elapsed. By simply modifying the intercepted information, the propagation speed of the block in the attacked node is delayed.Both attack methods can bring potential economic losses, including repeated payments and waste of computing power,
Eclipse attack
The eclipse attack is carried out by the attacker who controls the external contact of the node and keeps it in an isolated network by invading the node routing table, so as to implement routing spoofing, denial of service, ID hijacking and other attacks.At present, it has been confirmed that the eclipse attack can be implemented in Bitcoin and Ethereum networks.
In the Bitcoin network, due to the limited network resources of nodes, it is difficult for each node in the network to establish connections with all other nodes.Therefore, in Bitcoin, only one node is allowed to accept 117 connection requests and initiate 8 connections at most.If the attacker node accounts for a high proportion in the routing table of a node, and the attacker node can control the normal behavior of the node, including routing lookup and resource search, then this node can be regarded as an "eclipse" of the attacker.In the Bitcoin eclipse attack, the attacker fills the tried list of the attacked node with the attack address prepared in advance, and overwrites the new list of the attacked node with the address that does not belong to the Bitcoin network.When the attacker restarts or selects a node from the table to build a connection, there is a high probability that the eight outbound connections of the attacker are all attacker nodes, and the attacker occupies the incoming connection of the attacker.Through this process, the node's eclipse attack can be realized in the Bitcoin network.
In Ethereum, because a host on Ethereum can run nodes with multiple IDs, an attacker only needs two malicious Ethereum nodes to implement an eclipse attack.The solar eclipse attack on Ethereum mainly has two ways: (1) the solar eclipse attack of exclusive connection. The attacker only needs to quickly occupy all the connections of the victim node through incoming connections when the victim node restarts. In geth1.8.0, the vulnerability has been fixed by limiting the number of incoming connections of the node to not occupy the maxpeers of the node;(2) For the eclipse attack of occupying the table, the attacker uses the forged node ID to repeatedly send ping requests to the victim node when it restarts and occupies its K bucket, making the victim's outgoing connection point to the attacker. At this time, the attacker can complete the eclipse attack by using the incoming connection to occupy all the remaining connections of the victim.For the victim node, the solar eclipse attack makes it break away from the blockchain network under unknown circumstances, and all the request information will be hijacked by the attacker, obtaining false reply information and unable to make normal resource requests.
Anti money laundering crime
The common ways of money laundering are widely involved in banking, insurance, securities, real estate and other fields.Anti money laundering is a systematic project in which the government uses legislative and judicial power to mobilize relevant organizations and commercial institutions to identify possible money laundering activities, dispose of relevant funds, and punish relevant institutions and persons, so as to prevent criminal activities.
At present, among more than 20 common means of money laundering, Bitcoin and digital currency have been included in an international means of money laundering.Because of the anonymity and difficulty in tracking of digital currency, digital currency has begun to be widely used in black and gray areas.
According to the data, PeckShield's security team has conducted a tracking survey on the capital flow of more than 20 digital asset exchanges around the world. The analysis shows that the international flow of digital assets is very large, and most of the funds are not subject to reasonable and compliant national supervision.
Blockchain related hot concepts
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mining
The mine in Bitcoin is a virtual number and a hash value that meets the requirements of the algorithm.Mining in Bitcoin is the process of calculating this hash value.The difficulty of mining is constantly updated, which is equivalent to a treasure hunt game. After a period of time, the Bitcoin system will generate the difficulty of calculation, and then all computers will calculate the value that meets the requirements. The first one to find it, the one who can get the Bitcoin reward, and can get a block for bookkeeping. To calculate the serial number that meets the requirements,It requires a lot of CPU operations.
Mining is to confirm the transactions that have occurred in the Bitcoin system for a period of time and record the process of forming new blocks on the blockchain. Miners are called miners.The bookkeeping power of the Bitcoin system is decentralized, that is, every miner has the right to bookkeep.Miners who successfully win the bookkeeping right will receive the new Bitcoin reward and the handling fee for recording each transaction.Therefore, mining is the process of producing Bitcoin.When Nakamoto first designed Bitcoin, it was stipulated that for every 210000 blocks generated, the number of Bitcoin rewards would be halved until the number of Bitcoin rewards could no longer be subdivided.
The main work of miners is to find new blocks that meet the requirements and package the transactions into blocks.If you want to become a miner, you can start mining by purchasing a special computing device and downloading mining software.
In the final analysis, mining is a competition of computing power. The specific process of mining is to calculate the matching hash value by running mining software.The operation of mining software requires computing power. At first, CPU was used to mine. With more and more people joining, mining equipment has been upgraded;After CPU, some people began to use GPU to mine. The pipeline of GPU was more focused, and the number was more. Parallel computing was very cheap. GPU was more efficient than CPU, and its power consumption ratio was lower. It soon replaced CPU;Later, FPGA was used to mine, and the performance/power consumption ratio of FPGA was further improved compared with GPU;Finally, there are ASIC mining machines on the market.Mining requires mining machines and mining software. In addition to the hardware loss, the biggest consumption in the operation process is the electricity cost. Therefore, the battle of power calculation largely depends on who can obtain lower power costs, and who has the first mover advantage.
When the mining software is running, an account needs to be set up and the corresponding mining software is used to run on the mining machine. If the hash value is calculated first and is authenticated by the whole network, the corresponding mining rewards will be automatically released to the account of the mining software.This reward can be withdrawn to other wallets for saving or trading.
Currency circle
The currency circle refers to a group of people who focus on speculation and encryption of digital currency, and even issue their own digital currency to raise funds. It is commonly known as the "currency circle" in the industry.
The currency circle can be roughly divided into two categories: one is the mainstream currency based on blockchain technology in the market, such as Bitcoin and Ethereum;The other is digital currency financing, that is, issuing new currency, which is also called "counterfeit currency" by the industry.The early counterfeit currency refers to the digital currency generated by imitating the Bitcoin code and system. At present, most of the counterfeit currencies we understand refer to those low-quality digital currencies with no value base.
There is a certain disdain relationship between the mining circle and the currency circle.The mining circle thinks of itself as an investment and looks down on the speculation of the currency circle.The currency circle is generally for speculation or making money. It likes hype and hopes to double the price and find new hundred times and thousand times coins.The early currency circle was full of fanaticism and irrationality, as well as deception and confusion.
Ore circle
The "mining circle" is a group of "miners" focusing on "mining", most of whom are engaged in the IT industry.Nakamoto Cong has issued a total of 21 million bitcoins. At the beginning, there were not many people mining. Ordinary computers can mine, but as more people are mining, it is necessary to use professional servers with high computing power to mine.
Bitcoin mining has gone through five stages, namely CPU mining, GPU mining, FPGA mining, ASIC mining, and large-scale cluster mining (ore pool).
To better understand the difference between them, a simple example is as follows:
(1) CPU mining speed is 1.
(2) The mining speed of GPU is 10.
(3) The mining speed of FPGA is 8, and the power consumption is 40 times smaller than that of GPU.
(4) The mining speed of ASIC is 2000, and the power consumption is equivalent to GPU.
As the computing power required for mining increases, the GPU has also reached the upper limit of computing power. In order to break this limitation, someone has invented specialized mining equipment.Although these devices are computers, they can do nothing but dig Bitcoin and run hash operations. We call them "mining machines".The mining machine of Bitcoin can only calculate the algorithm of Bitcoin.The Lite Coin Miner can only calculate the Lite Coin algorithm, and cannot be used in common with each other.
The world's top three manufacturers of digital currency mining machines (BitContinent, Jianan Yunzhi, Yibang Technology) are all in China, covering more than 90% of the global share (data in 2019 shows).
Digital currency
The early digital currency (digital gold currency) is a form of electronic currency named after the weight of gold.Today's digital currency, also known as cryptocurrency, refers to a digital currency that does not rely on any physical object and uses cryptographic algorithms. It is called Cryptocurrency in English, especially refers to digital currencies generated based on blockchain technology, such as Bitcoin, Lite Coin, Ether and other electronic currencies that rely on verification and cryptographic technology to create, issue and circulate.
From the perspective of currency attribute, digital currency has the following three important advantages over traditional legal currency.
(1) Effectively fight against inflation: A total of 21 million Bitcoins have been issued. After 2140 years, no more Bitcoins will be added. Mining machines will charge transaction service fees to cover computing costs.When the central bank of a sovereign government adopts an overly loose monetary policy or the domestic political situation is unstable, it will lead to more serious inflation, resulting in a sharp decline in people's wealth, and Bitcoin can better cope with inflation.
(2) Private property rights are protected: because blockchain is used as the underlying technology and point-to-point transaction mode, the transaction process is not monitored and audited, and the outside world cannot interfere with private property.
(3) Promoting globalization: The biggest feature of Bitcoin is financial disintermediation ("disintermediation" generally refers to skipping all intermediaries in transactions and directly carrying out them between supply and demand parties. "Financial disintermediation" is also called "financial disintermediation", which is called Financial Disintermediation in English). Using Bitcoin can make cross-border trade and cross-border investment faster and cheaper.
From the perspective of technical attributes, the current digital currency is still based on electronic technology. With the rapid development of quantum computers, encryption, decryption and other technologies, digital currencies such as Bitcoin will face some challenges. In addition to some economic competition reasons, Bitcoin may disappear or be replaced by other digital currencies in the future.
From the social point of view, part of the ideological roots of digital currency comes from a kind of free thought, anarchism, and is the product of some western ideas.Free thinking in the field of economics is a powerful driving force for the generation of blockchain technology.Whether early Hayek and his Denationalization of Money, Dai Wei, the proponent of B-money theory, and BM, the technical creator of Bitshare, Steemit, and EOS, they all advocate a kind of freedom, and Nakasone, the creator of Bitcoin, is undoubtedly influenced by this kind of freedom.For us, digital currency is difficult to understand and operate, too risky, and does not need to participate.
The digital currency is subject to the tough supervision of the government, and the problems arising from the gray areas behind Bitcoin have surfaced.
(1) Capital outflow in China: due to its technical characteristics, SAFE is unable to supervise the exchange method of using RMB to exchange Bitcoin domestically and then using Bitcoin to exchange foreign currency overseas.Bitcoin has become one of the money laundering channels.
(2) Payment method for drug and gun sales: Bitcoin has become a means of payment for criminals to buy drugs and guns, promoted the circulation of illegal goods, and deepened the suffering of people in some countries and regions.
(3) A new means of illegal fund-raising: the essence of ICO is to issue income voucher securities and graft them on digital currency, without the need to avoid legal supervision through exchanges and the CSRC.Some ICOs even didn't have a business plan in the process of issuance, but they were sought after by capital, resulting in the loss of capital for investors.
Common digital currencies are classified as follows:
(1) Pure digital currency.
(2) Digital currency supporting application functions.
(3) Digital currency for payment function.
(4) Privacy currency.
(5) Digital currency for storage capacity.
(6) Other digital currencies for special purposes.
Misunderstanding of blockchain
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Myth 1: Blockchain is equal to speculation in Bitcoin
The explosive boom of Bitcoin in 2017 made investors see an emerging blue ocean, so investors came into the market to make money.This also created the first impression of blockchain: blockchain is just speculation.
However, Bitcoin is just an application scenario of blockchain technology, just like Alipay is a product of Internet finance.Nowadays, not only Bitcoin, but also Ethereum, Ripple Coin and other digital currencies are traded in the digital currency market, just like stocks in the traditional securities market.
In addition, various Internet giants at home and abroad, such as BATJ, are committed to the research of blockchain technology applications. At present, they have landed in product traceability, electronic certificate storage, public welfare and other aspects, which also enable the society to gradually discover the benefits of blockchain.
Myth 2: The data on the blockchain is absolutely secure
Many people, including some people who have spent many years in the currency circle, believe that the data in the blockchain is stored by encryption and is "absolutely secure", so they can store bank accounts, some important passwords, etc. on the blockchain.
But the fact is that "absolute security" does not exist.
In the public chain, the data stored in the blockchain is publicly visible to every node or individual, which means that anyone can view the data stored on the chain as long as they are on the chain.
The "data security" mentioned by the blockchain only means that "data cannot be tampered with", and no one has the right to modify data, that's all.Therefore, blockchain is not suitable for storing personal sensitive information.
Myth 3: Blockchain is suitable for storing large amounts of data
The distributed nature of blockchain means that every node on the blockchain network has a complete copy of the blockchain.If the blockchain is used to store large files such as videos, it will be very difficult for nodes to process, resulting in low efficiency.Each block of Bitcoin can save up to 1MB of data.
Therefore, in this case, large data files are generally stored elsewhere, and then the fingerprint (hash value) of the data is stored on the blockchain.
Misunderstanding 4 Smart contract is a real contract stored on the blockchain
In fact, smart contracts have nothing to do with real world contracts.Smart contracts are computer programs that can be stored on the blockchain, have been written, and can be executed.
Smart contracts are written in programming languages. For example, Ethereum uses Solidity. Through the code running environment of Ethereum virtual machine, smart contracts can run on the blockchain of Ethereum to achieve functional expansion.
Bitcoin, known as cryptocurrency 1.0, is relatively simple. Without the concept of smart contract, there is no way to create smart contracts on the Bitcoin chain, nor to develop DApp applications.But Bitcoin can support simple scripting languages and extend some simple functions.
Therefore, smart contracts are computer programs that can be automatically executed according to preset conditions, but only within the blockchain. At the same time, the preset conditions must be verified by blockchain technology.
Myth 5: Bitcoin is the same as coin
Bitcoin is the first digital currency based on the blockchain system.In the real world, there is no entity;In the blockchain world, it only exists as a transaction record.
Coins have only one utility - as a simple means of storing value.Tokens can store complex values, such as attributes, utility, income, and substitutability, but they are different in nature.
If you want to purchase, send and receive Bitcoin and interact with the Bitcoin blockchain, you only need a Bitcoin wallet, which is just an address and a key. The interactive Bitcoin is an effective transaction record, allowing nodes to verify.
For example, a miner obtained 12.5 bitcoins as a reward when he carried out a mining calculation. The only valid record of these 12.5 bitcoins is that they were transferred to the miner's wallet, and there will be no physical presentation.
Myth 6: Bitcoin cannot become a mainstream currency because of the government
The biggest problem of Bitcoin is its inherent scalability.In Nakamoto's design, it takes about 10 minutes to produce a block on the Bitcoin blockchain, and the size of each block is limited to 1MB, which results in that the Bitcoin blockchain can only process 7 transactions per second.This makes Bitcoin very suitable for transfer remittance, which does not require immediate transaction confirmation.
Ethereum, as the cryptocurrency 2.0, can only achieve 20 TPSs per second at present.In contrast, in 2017, "Double 11" Alipay completed a maximum of 256000 transactions per second, and the processing speed of Visa and Paypal was also far faster than Bitcoin and Ethereum.
Therefore, the main reason why Bitcoin cannot become a mainstream currency at present is not because of government, regulatory and regulatory restrictions, but because of its inherent scalability, which makes it impossible to truly achieve real-time and convenient transactions and circulation among the public.
Myth 7: Blockchain can be applied to the whole industry
Some people regard blockchain technology as the fourth industrial revolution, while others regard it as an iteration of Internet development.In any case, this is a great progress in technological development, and the value condensed in this technology needs to be explored.
Human beings have invented technology, and technology will give back to human beings.Many people believe that blockchain will gradually become an important infrastructure used by many industries, far beyond cryptocurrency and financial services.
However, although blockchain technology is a new progress, not all industries need blockchain.In the short term, blockchain technology cannot be used in all areas of life.At present, the cost of building a blockchain project is not low, and talents in this area are scarce. Under the market economy, they will only go to projects with better returns.Currently, blockchain technology can be applied to very limited industries. In addition to being relatively mature in the field of digital currency, it has not entered into other industries more.
And the "coin free blockchain" with Chinese characteristics will gradually be monopolized by giants like BATJ. It will become more difficult for small blockchain enterprises to implement applications.
Blockchain technology cannot solve all social trust problems, and whether it can fully "decentralize" is also a question mark. However, in the process of being misunderstood and cognition being gradually promoted, blockchain is becoming more and more powerful, and more and more adapted to this era.
Application of blockchain
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Supply Chain Finance
In the blockchain based supply chain finance application, each transaction and account receivable document on the supply chain are linked, and third-party trusted institutions, such as banks and logistics companies, are introduced to confirm these information, ensure the authenticity of transactions and documents, and realize the true link of material flow, information flow, and capital flow;At the same time, it supports the transfer, financing and clearing of accounts receivable, so that the credit of core enterprises can be transferred to upstream and downstream enterprises in the supply chain, reducing the financing difficulty of SMEs, and solving the regulatory problems of institutions.
Asset transaction
To conduct digital asset transactions through the blockchain, first register offline assets on the chain and convert them into standardized digital assets on the blockchain, which can not only store certificates for transactions, but also achieve settlement upon transaction, improve transaction efficiency and reduce the cost of communication and cooperation between institutions.The regulator can join the alliance chain to monitor the digital asset transactions on the blockchain in real time, improve the regulatory efficiency, and conduct credible arbitration and accountability when necessary.
Judicial deposit
In justice, compared with traditional judicial evidence, the acquisition of electronic evidence has the following difficulties.
The cost of obtaining evidence is high.At present, judicial evidence collection relies on the depository institution with judicial mechanism, which has the characteristics of long evidence collection cycle and high cost.At the same time, the labor input is large and the operation cost is high.
The evidence collection is difficult to verify, and the credibility may be insufficient.Due to the characteristics of electronic evidence itself that is easy to tamper with and difficult to trace, the authority of electronic evidence collection depends on the qualification and credibility of the forensics institution, and it is difficult to verify and prosecute after obtaining evidence.
In 2018, China announced the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Cases by Internet Courts (hereinafter referred to as the Provisions).Article 11 of the Provisions clearly stipulates that if the electronic data submitted by the parties can prove its authenticity through electronic signature, trusted timestamp, hash value verification, blockchain and other technical means of evidence collection, fixation and tamper proof, or through the authentication of the electronic evidence collection and storage platform, the Internet court shall confirm it.Therefore, electronic evidence recorded by the blockchain can be considered as evidence with judicial effect, and has been successfully applied by many platforms.
In November 2022, the filing court of Holingol People's Court of Inner Mongolia Autonomous Region used the "blockchain evidence verification" technology to verify the mediation agreement and other materials that have been stored in the chain, and made a civil ruling confirming the effectiveness of the people's mediation agreement, greatly improving the efficiency of judicial confirmation of mediation cases before litigation,It won the praise of the client.
Smart Contract
A smart contract is actually a computer program that functions on the action of another object.Like ordinary computer programs, smart contracts are also a "if then" function, but blockchain technology enables the automatic filling and execution of these "contracts" without manual intervention.Such contracts may eventually replace the core business of the legal industry, that is, the business of drafting and managing contracts in the commercial and civil fields.
Traceability and anti-counterfeiting
Using the circulation chain that tracks and records tangible goods or intangible information, and through the registration of each circulation, we can achieve the objectives of tracing the origin, anti-counterfeiting authentication, optimizing the supply chain based on the traceability information, and providing supply chain financial services.
The internal logic of applying blockchain technology to traceability, anti-counterfeiting and optimizing the supply chain is that data cannot be tampered with and time stamped.The real-time reconciliation capability of the blockchain in the registration and settlement scenario, as well as the tamper proof and time stamping capability in the data storage scenario, provide a powerful tool for traceability, anti-counterfeiting, and optimization of the supply chain scenario.
government
Government information, project bidding and other information are open and transparent, and government work is usually concerned and supervised by the public. Because blockchain technology can ensure the transparency and immutability of information, it plays a great role in the implementation of government transparent management.There is a certain degree of information opacity in government project bidding, and enterprises also have the risk of information disclosure in the process of sealed bidding.Blockchain can ensure that bidding information cannot be tampered with, and can ensure the transparency of information, so as to form a trust consensus among competitors who do not trust each other.It can also arrange subsequent smart contracts through the blockchain to ensure the construction progress of the project and prevent corruption to some extent.
digital certificate
The first one to explore in the field of digital certificates is MIT's media laboratory.Blockcert released by Media Lab is an open standard for digital degree certificates based on Bitcoin blockchain.The publisher creates a digital file containing some basic information, such as the name of the certificate grantor, the name of the publisher (MIT Media Lab), and the release date.Then use a private key that only Media Lab can access to sign the certificate content and append the signature to the certificate itself.Next, the publisher will create a hash, which is a short string, to verify that no one tampers with the certificate content.Finally, use the private key again to create a record on the Bitcoin blockchain, indicating that we issued a certificate for someone on a certain date.
logistics
Singapore companies use blockchain technology to help logistics companies dispatch fleets.Yojee is a Singapore company founded in January 2015. Yojee has built software using artificial intelligence and blockchain, making full use of the existing last mile delivery infrastructure to help logistics enterprises adjust their fleets.
For e-commerce companies, Yojee launched a software called Chatbot to help e-commerce companies book and deliver goods without management.Chatbot can feed the customer's details (such as address, delivery time, etc.) to the system, and the system will automatically arrange the correct delivery.
Relevant policies, laws and regulations
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In October 2016, the Ministry of Industry and Information Technology released the White Paper on China's Blockchain Technology and Application Development (2016), which summarized the development status and typical application scenarios of blockchain at home and abroad, introduced the development roadmap of domestic blockchain technology and the future direction and process of blockchain technology standardization.
In December 2016, "blockchain" was written into the Notice of the State Council on Printing and Distributing the 13th Five Year National Informatization Plan as a strategic frontier technology for the first time.
In January 2017, the Ministry of Industry and Information Technology released the Software and Information Technology Service Industry Development Plan (2016-2020), which proposed the requirements that innovation in blockchain and other fields should reach the international advanced level.
In August 2017, the State Council issued the Guiding Opinions on Further Expanding and Upgrading Information Consumption to Continuously Release the Potential of Domestic Demand, proposing to carry out pilot applications based on blockchain, artificial intelligence and other new technologies.
On August 30, 2017, the China Internet Finance Association issued the Tips on Preventing Various Risks Related to Absorption of Investment in the Name of ICO, pointing out that some institutions at home and abroad use various misleading publicity means to engage in financing activities in the name of ICO, and relevant financial activities have not obtained any permits, including fraud, illegal securities, illegal fund-raising and other acts.
On September 2, 2017, the Office of the Leading Group for the Special Rectification of Internet Financial Risks issued the Notice on Cleaning up and Rectification of Token Issuance Financing to provincial and municipal financial offices (bureaus).All provincial and municipal financial offices (bureaus) are required to interview and monitor the platform executives within their jurisdiction, monitor the accounts, and freeze the capital assets if necessary to prevent the platform from running away.Fully stop the new token issuance and financing activities, establish a monitoring mechanism for token issuance and financing activities, and prevent the resurgence;The completed ICO projects should be studied and judged case by case, and those issued by the public should be dismissed to crack down on violations of laws and regulations.In view of the content of the rectification of the issued projects, the local mutual fund rectification offices are required to study and judge the issued projects case by case, and investigate and deal with the violations.
On September 4, 2017, seven ministries including the People's Bank of China (the People's Bank of China, the Central Cyberspace Office, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the CBRC, the CSRC, and the CIRC) issued the Announcement on Preventing the Financing Risks of Token Issuance, pointing out that so-called virtual currencies such as Bitcoin and Ethercoin are essentially unauthorized illegal public financing,There are multiple risks in token issuance, financing and trading, including false asset risk, business failure risk, investment speculation risk, etc. Investors must bear the investment risk themselves.It is required to stop all kinds of token issuance and financing activities on that day, and the organizations and individuals that have completed token issuance and financing shall make arrangements such as liquidation.
In October 2017, the State Council issued the Guiding Opinions on Actively Promoting Supply Chain Innovation and Application, which proposed to study and use blockchain, artificial intelligence and other emerging technologies to establish a supply chain based credit evaluation mechanism.
In March 2018, the Ministry of Industry and Information Technology released the 2018 Key Points for Standardization of Informatization and Software Service Industry, proposing to promote the establishment of the National Technical Committee for Standardization of Informatization and Industrialization Integration Management, and the National Technical Committee for Standardization of Blockchain and Distributed Accounting Technology.
At the end of October 2019, the Political Bureau of the Central Committee of the Communist Party of China (CPC) carried out the 18th collective learning on the current situation and trend of blockchain technology development. The central leadership clearly emphasized that the blockchain should be an important breakthrough for independent innovation of core technology, and accelerated the development of blockchain technology and industrial innovation.
In November 2019, the Reply to Recommendation 1394 of the Second Session of the 13th National People's Congress released on the website of the Ministry of Industry and Information Technology said that it would promote the establishment of the National Blockchain and Distributed Accounting Technology Standardization Committee, and systematically promote the development of standards.Accelerate the formulation of key and urgent standards and build a standard system.Actively connect with ISO, ITU and other international organizations, and actively participate in international standardization work.
In May 2021, the Ministry of Industry and Information Technology and the Central Cyberspace Office jointly issued the Guiding Opinions on Accelerating the Application of Blockchain Technology and Industrial Development, proposing to cultivate a number of blockchain famous products, enterprises and parks, build an open source ecosystem, adhere to the equal emphasis on both weak and strong points, and accelerate the building of a complete blockchain industrial chain.
In September 2021, the People's Bank of China, the Central Cyberspace Office and other departments jointly issued the Notice on Further Preventing and Handling the Speculation Risk of Virtual Currency Transactions to further prevent the speculation risk of cryptocurrency.
On January 30, 2022, the Central Cyberspace Office released the "Central Cyberspace Office and other 16 departments jointly publish the list of national blockchain innovation application pilots", which includes 15 comprehensive pilot units, and covers blockchain+manufacturing, energy, government services/government data sharing, rule of law, tax services, trial, prosecution, copyright, civil affairs, human society, education, health, trade finance164 pilot units in 16 industries including risk control, equity market and cross-border finance.
On May 23, 2023, the State Market Supervision Administration and the National Standardization Administration jointly released the Information Security Technology Blockchain Information Service Security Specification led by the Institute of Information Engineering of the Chinese Academy of Sciences, which will be implemented on December 1, 2023[29]。
