Research on the principle and global application status of blockchain technology

Ⅰ The meaning of blockchain technology The principle of blockchain technology

In order to understand the principle of blockchain thoroughly, it must be systematically understood from its birth and development, so that it can be understood from multiple perspectives. Clearly identify the principle of blockchain. Blockchain technology (Block Chain) refers to a technical solution to collectively maintain a reliable database in a decentralized manner. This technical solution mainly associates blocks through cryptographic methods. Each data block contains all the data information of the system within a certain period of time, and generates a digital signature to verify the validity of the information and link to the next data block. Form a main chain (Chain).

A block is a record in the blockchain that contains and confirms pending transactions.

Mining refers to the formation of new blocks through calculation. It is a process in which the supporters of transactions use their own computer hardware to perform mathematical calculations for the network to confirm transactions and improve security. Take Bitcoin as an example: transaction supporters (miners) run Bitcoin software on computers to continuously calculate complex cryptographic problems provided by the software to ensure transactions. As a reward for their service, miners get a fee included in the transactions they confirm, as well as newly created bitcoins.

A Peer-to-Peer Network is a system that allows the entire system to operate like an organized collective by allowing a single node to interact directly with other nodes. Take Bitcoin as an example: the network is structured in such a way that every user is propagating the transactions of other users. And importantly, there is no need for a bank or other financial institution as a third party.

Hash is a classic technology in cryptography, which converts input of any length into a fixed-length output composed of letters and numbers through the hash algorithm.

A digital signature is a mathematical mechanism that allows people to prove ownership.

Private Key is a confidential data block that proves that you have the right to spend electronic money from a specific wallet, which is achieved by digital signature.

Double spending refers to users trying to illegally pay electronic money to two different payees at the same time, which is one of the biggest risks of electronic money.


The Origins of Blockchain: An Underlying Technology Underpinning the Operation of Bitcoin

The concept of blockchain was first introduced in late 2008 by The paper “Bitcoin: A Peer-to-Peer Electronic Cash System” published by Satoshi Nakamoto in the Bitcoin Forum is proposed. The blockchain technology in the paper is the basic technology for constructing the encrypted transmission of bitcoin data structure and transaction information, which realizes the mining and transaction of bitcoin. Satoshi Nakamoto believes: First, the model of processing information with the help of third-party agencies has an inherent weakness of lack of trust between points. In order to guard against their customers, businesses will ask customers for completely unnecessary information, but they still cannot. Avoid certain fraudulent behavior; second, the existence of intermediaries increases transaction costs and limits the practical minimum transaction size; third, digital signature itself can solve the problem of electronic currency identity, if third-party support is required to prevent double consumption, the system will lose its value. Based on the above three existing problems, Satoshi Nakamoto created Bitcoin on the basis of blockchain technology.

On January 3, 2009, Satoshi Nakamoto created the first block in the Bitcoin world, the “Genesis Block”, and mined the first batch of 50 bitcoins.

On May 21, 2010, a Florida programmer used 10,000 bitcoins to buy $25 worth of pizza coupons, creating the first fair exchange rate for bitcoin.

In July 2010, the first Bitcoin platform was established, with a surge in new users and a surge in prices.

In February 2011, the price of Bitcoin reached 1 US dollar for the first time, and then the exchange and trading platform with the British pound, the Brazilian real, and the Polish zloty opened.

In 2012, Ripple (Ripple) released, as a digital currency, the use of blockchain to transfer foreign exchange in various countries.

In 2013, Bitcoin skyrocketed. The U.S. Department of the Treasury issued the Regulations for the Personal Management of Virtual Currency, clarifying the definition of virtual currency for the first time.

In 2014, the mining machine industry chain represented by China became more and more mature. In the same year, the American IT industry realized the cross-generational innovation significance of blockchain in the digital field.

In 2015, the Nasdaq stock exchange launched the blockchain-based digital ledger technology Linq to record the transaction and issuance of stocks.

The principle of blockchain can be clearly understood from the application cases, and the application of the principle of blockchain is becoming more and more popular. Recently, Citigroup, Japan’s Mitsubishi UFJ Financial Group, Switzerland Large global financial institutions such as Union Bank and Deutsche Bank will also apply “blockchain” technology to createA fast, convenient and low-cost transaction operating system. In addition to the financial field, blockchain technology has also begun to be applied to the protection of intellectual property rights, lawyers’ notarization, online games and other fields that require transparent information and permanent records.

Ⅱ Development Status and Prospect of Blockchain Technology

Development Status and Prospect of Blockchain Technology
Blockchain technology originated in 2008 by the pseudonym “Nakamoto”. The groundbreaking paper “Bitcoin: A Peer-to-Peer Electronic Cash System” published on the cryptography mailing group by scholars of Satoshi Nakamoto. In the past two years, the research and application of blockchain technology has shown an explosive growth trend. It is considered to be the fifth subversive innovation of the computing paradigm after mainframes, personal computers, the Internet, and mobile/social networks. It is the evolution of human credit. It is the fourth milestone in history after blood kinship credit, precious metal credit, and central bank banknote credit. Blockchain technology is the prototype of the next generation of cloud computing, which is expected to completely reshape the form of human social activities like the Internet, and realize the transformation from the current information Internet to the value Internet. The technical characteristics of blockchain

Blockchain has the characteristics of decentralization, time series data, collective maintenance, programmability, security and trustworthiness. Decentralization: The processes of verification, bookkeeping, storage, maintenance and transmission of blockchain data are all based on the distributed system structure, and pure mathematical methods are used instead of central institutions to establish trust relationships between distributed nodes, thereby forming a decentralized system. Centralized and trusted distributed system; Time series data: The blockchain uses a chain block structure with timestamps to store data, which adds a time dimension to the data and has strong verifiability and traceability; Collective maintenance: The blockchain system adopts a specific economic incentive mechanism to ensure that all nodes in the distributed system can participate in the verification process of data blocks (such as Bitcoin’s “mining” process), and select specific Nodes add new blocks to the blockchain; Programmable: Blockchain technology can provide a flexible script code system that supports users to create advanced smart contracts, currencies or other decentralized applications; Secure and trustworthy: Blockchain technology adopts The principle of asymmetric cryptography encrypts data, and at the same time uses the powerful computing power formed by consensus algorithms such as workload proof of each node of the distributed system to resist external attacks and ensure that blockchain data cannot be tampered and forged. safety. Blockchain and Bitcoin Bitcoin is by far the most successful blockchain application scenario. Blockchain technology solves the double payment problem and the Byzantine general problem that the Bitcoin system has to face for a long time in the field of digital cryptocurrencies. Different from the credit endorsement mechanism of traditional central institutions (such as central banks), the Bitcoin blockchain forms software-defined credit, which marks a fundamental change from centralized national credit to decentralized algorithmic credit. In recent years, by virtue of its first-mover advantage, Bitcoin has formed a complete ecosystem and industrial chain covering issuance, circulation and financial derivatives markets. Development Context and Trend of Blockchain
Blockchain technology is a universal underlying technical framework, which can bring profound changes to various fields such as finance, economy, technology and even politics. According to the current development of blockchain technology, blockchain technology will experience the blockchain 1.0 mode with programmable digital encryption system as the main feature, the blockchain 2.0 mode with programmable financial system as the main feature and the The blockchain 3.0 model with programmable society as the main feature. However, the above models are actually developed in parallel rather than evolutionarily, and the digital cryptocurrency system of the blockchain 1.0 model is still far from mature, and is actually farther and more difficult from its vision of global monetary integration. At present, the blockchain field has shown a clear development trend driven by technological and industrial innovation, and related academic research is seriously lagging behind and needs to be followed up urgently. The basic model and key technology of blockchain
Generally speaking, the blockchain system consists of data layer, network layer, consensus layer, incentive layer, contract layer and application layer. Among them, the data layer encapsulates the underlying data blocks and related data encryption and timestamping technologies; the network layer includes distributed networking mechanisms, data dissemination mechanisms, and data verification mechanisms; the consensus layer mainly encapsulates various consensuses of network nodes Algorithms; the incentive layer integrates economic factors into the blockchain technology system, mainly including the issuance mechanism and distribution mechanism of economic incentives; the contract layer mainly encapsulates various scripts, algorithms and smart contracts, which are programmable features of the blockchain. The application layer encapsulates various application scenarios and cases of the blockchain. In this model, the chain block structure based on timestamp,The consensus mechanism of ��-type nodes, economic incentives based on consensus computing power and flexible and programmable smart contracts are the most representative innovations of blockchain technology. Application Scenarios of Blockchain Technology
Blockchain technology can not only be successfully applied in the field of digital cryptocurrency, but also has a wide range of application scenarios in economic, financial and social systems. According to the current status of the application of blockchain technology, this paper generally summarizes the current main applications of blockchain into six scenarios: digital currency, data storage, data authentication, financial transactions, asset management and election voting: Digital currency: Bitcoin As a representative, it is essentially a digital currency generated by a distributed network system, and its issuance process does not depend on a specific centralized institution. Data storage: The characteristics of high redundancy storage, decentralization, high security and privacy protection of blockchain make it especially suitable for storing and protecting important privacy data to avoid the damage caused by the attack of centralized institutions or improper rights management. Massive data loss or breach. Data Attestation: Blockchain data is time-stamped, verified and recorded by consensus nodes, and cannot be tampered with or forged. These characteristics make the blockchain widely used in various data notarization and auditing scenarios. For example, blockchain can permanently and securely store various licenses, registration forms, licenses, certifications, certifications and records issued by government agencies. Financial transactions: Blockchain technology and financial market applications have a very high degree of fit. The blockchain can spontaneously generate credit in a decentralized system, and can establish a financial market without central institutional credit endorsement, thus realizing “financial disintermediation” to a large extent; at the same time, the use of blockchain to automate smart contracts and The characteristics of programming can greatly reduce costs and improve efficiency. Asset management: Blockchain enables the identification, authorization and real-time monitoring of tangible and intangible assets. Intangible asset management has been widely used in intellectual property protection, domain name management, point management and other fields; tangible asset management can be combined with IoT technology to form “digital intelligent assets” to achieve distributed authorization and control based on blockchain. Election voting: The blockchain can realize political elections, corporate shareholder voting and other applications in a low-cost and efficient manner. At the same time, based on voting, it can be widely used in fields such as gambling, prediction markets, and social manufacturing. Existing Issues with Blockchain Technology
Security threats are by far the most important issue facing blockchains. Among them, the blockchain based on the PoW consensus process mainly faces the problem of 51% attack, that is, nodes can successfully tamper and forge blockchain data by mastering more than 51% of the computing power of the entire network. Other issues include the potential threat of emerging computing technologies to break asymmetric encryption mechanisms and privacy protection issues. The efficiency of blockchain is also an important factor restricting its application. The blockchain requires each node in the system to keep a data backup, which is extremely difficult for the growing mass data storage. While lightweight nodes can partially solve this problem, industrial-grade solutions suitable for larger scales remain to be developed. Currently, the Bitcoin blockchain can only process 7 transactions per second, and the transaction confirmation time is generally 10 minutes, which greatly limits the application of the blockchain in high-frequency trading scenarios in most financial systems. The PoW consensus process is highly dependent on the computing power contributed by the blockchain network nodes. These computing powers are mainly used to solve SHA256 hash and random number search, and do not produce any actual social value. Therefore, these computing powers are generally considered to be Resources are “wasted”, and at the same time, a lot of power resources are wasted. How to effectively pool the network computing power of distributed nodes to solve practical problems is an important problem that blockchain technology needs to solve. As a decentralized distributed system, the blockchain network will inevitably have a game relationship of mutual competition and cooperation in the interaction process of each node, such as the block interception attack game of the Bitcoin mining pool. The blockchain consensus process is essentially a crowdsourcing process. How to design an incentive-compatible consensus mechanism so that self-interested nodes in the decentralized system can spontaneously perform the verification and accounting of block data, and improve the non-profitability in the system. The cost of rational behavior to suppress security attacks and threats is an important scientific problem to be solved by blockchain. Smart contracts and blockchain technology
Smart contracts are a set of scenario-response programming rules and logic, and are decentralized, trusted and shared program codes deployed on the blockchain. Usually, after the smart contract is signed by all parties, it is attached to the blockchain data (such as a bitcoin transaction) in the form of program code, and is recorded in a specific block of the blockchain after being propagated through the P2P network and verified by nodes. . Smart contracts encapsulate a number of predefined states and transition rules, and scenarios that trigger contract execution (such as reaching a specific time or happeningspecific events, etc.), response actions in specific situations, etc. The blockchain can monitor the status of smart contracts in real time, and activate and execute contracts by checking external data sources and confirming that certain trigger conditions are met. Smart contracts are of great significance to blockchain technology. On the one hand, smart contracts are the activators of the blockchain, which endow the static underlying blockchain data with flexible and programmable mechanisms and algorithms, and lay the foundation for the construction of programmable financial systems and social systems in the blockchain 2.0 and 3.0 eras. On the other hand, the automation and programmability of smart contracts make it possible to encapsulate the complex behavior of each node in the distributed blockchain system and become a software agent robot in the virtual world composed of blockchain, which helps Promote the application of blockchain technology in various distributed artificial intelligence systems, so that various decentralized applications (Decentralized application, Dapp), Decentralized Autonomous Organization (Decentralized Autonomous Organization, DAO), Decentralized Autonomous Corporation (DAC) and even Decentralized Autonomous Society (DAS) are possible. The main development trend of blockchain and smart contract technology is the evolution from automation to intelligence. The essential logic of various existing smart contracts and their applications is still based on the “IF-THEN” type of conditional response rules in predefined scenarios, which can meet the current needs of automated transactions and data processing. Future smart contracts should have the functions of “WHAT-IF” deduction based on unknown scenarios, computational experiments and a certain degree of autonomous decision-making, so as to realize the leap from the current “automatic” contract to the real “smart” contract. Blockchain-driven parallel society
In recent years, a parallel society based on CPSS (Cyber-Physical-SocialSystems) has emerged, and its core and essential features are virtual-real interaction and parallel evolution. Blockchain is one of the infrastructures to realize the parallel society of CPSS. Its main contribution is to provide a set of effective decentralized data structures, interaction mechanisms and computing models for distributed social systems and distributed artificial intelligence research. And it has laid a solid data foundation and credit foundation for the realization of a parallel society. As far as the basis of data is concerned, management scientist Edward Deming once said: Everyone except God must speak with data. However, in a centralized social system, data is usually in the hands of “a few people” such as the government and large enterprises, and “speaks” for a few people, and its fairness, authority, and even security may not be guaranteed. Blockchain data is stored in highly redundant distributed nodes and is in the hands of “everyone”, enabling true “data democracy”. As far as the credit basis is concerned, a centralized social system will inevitably have the characteristics of a “Mertonian system” due to its high engineering complexity and social complexity, that is, uncertainty, diversity and complexity, the center of the social system. Institutions and rule-makers may have untrustworthy behaviors due to individual interests; blockchain technology helps to realize software-defined social systems. The basic idea is to eliminate centralized institutions and convert unpredictable behaviors into smart contracts. The form is deployed and solidified in the blockchain data in advance, and cannot be forged and tampered with and executed automatically after the event, so that the “Merton” social system can be transformed into a fully observable, actively controlled, and accurately predictable “Newton” social system to a certain extent. “Social System. ACP (Artificial Societies, Computational Experiments and Parallel Execution) method is the only systematic and complete research framework in the field of parallel society management so far. Innovation. The ACP method can be naturally combined with blockchain technology to achieve blockchain-driven parallel social management. First of all, the mechanisms of blockchain’s P2P networking, distributed consensus collaboration, and contribution-based economic incentives are themselves natural modeling of distributed social systems, in which each node will act as an autonomous and autonomous system in the distributed system. Agent. With the improvement of the blockchain ecosystem, the consensus nodes of the blockchain and increasingly complex and autonomous smart contracts will form DACs and DAOs in specific organizational forms by participating in various forms of Dapps, and finally form DAS, that is, in ACP. artificial society. Secondly, the programmable nature of smart contracts enables the blockchain to carry out various “WHAT-IF” types of virtual experiment design, scenario deduction and result evaluation, and through this computational experiment process, optimal decisions are obtained and automatically or semi-automatically executed. Finally, the intelligent assets formed by the combination of blockchain and the Internet of Things make it possible to connect the real physical world and virtual cyberspace, and can interact and parallelize the virtual and real world through real and artificial social systems.Harmony realizes the coordinated optimization of social management and decision-making. It is not difficult to foresee that in the future, when all physical assets in the real physical world are registered as smart assets on the chain, it will be the arrival of a parallel society driven by blockchain.

Ⅲ The status quo and future development trend of blockchain

Blockchain develops to 3.0, and application exploration is the goal at this stage

According to the definition of IDC, blockchain Refers to a distributed ledger that records information and data. The ledger is stored among multiple participants in the peer-to-peer network, and participants can use encrypted signatures to add new transactions to the existing transaction chain to form a secure, continuous, and immutable chain data structure; from a data perspective From the point of view, the blockchain is a distributed data that cannot be changed.

In 2008, an article “Bitcoin – A Peer-to-Peer Electronic Cash System” marked the birth of Bitcoin, and the global blockchain industry also kicked off. Up to now, the blockchain has developed from 1.0 to 3.0, characterized by digital currency, and developed to the stage of application exploration.

The above data comes from the “China Blockchain Industry” published by Qianzhan Industry Research Institute. In-depth Analysis Report on Business Model Innovation and Investment Opportunities”, and Qianzhan Industry Research Institute also provides solutions such as industrial big data, industrial planning, industrial declaration, industrial park planning, and industrial investment promotion.

ⅣHow has blockchain technology developed in the past year

At the 2017 Global Blockchain Finance Summit held in Hangzhou, it was pointed out that the global blockchain technology is developing at an alarming rate , a large number of applications to accelerate the spread. It is expected that in 2020, the blockchain industry will generate revenue of 80-110 billion US dollars, and Internet finance, which is at the forefront, is expected to benefit first. At present, my country has 105 blockchain enterprises, ranking second in the world after the United States. With the development of domestic blockchain enterprises, my country has a high probability of becoming a new growth pole of the global blockchain industry.
However, there is currently a lack of top-level planning and design, and the development of the blockchain industry is greatly restricted. However, blockchain technology is too professional and changes too fast, and it is difficult to introduce precise supportive policies in the short term. From the perspective of application fields, the blockchain is the most suitable and most likely to cause changes in the financial industry. The development of finance and technology has always been inseparable, and financial innovation with the help of modern information technology has become the main way of competition in the financial industry.
In view of the bright prospects of the blockchain, capital has long been moved by the wind and preempted the layout. According to the “In-depth Analysis Report on Business Model Innovation and Investment Opportunities in China’s Blockchain Industry” by the Prospective Industry Research Institute, the global blockchain venture capital scale has increased from US$2 million in 2012 to US$484 million in 2015, approximately There are 205 venture capital institutions involved, which shows the high enthusiasm of capital.
In the face of the opportunities brought by blockchain technology, relevant enterprises in my country must continue to practice “internal strength”, increase investment in research and development, boldly cut into the underlying technology reconstruction, and establish industry standards, in order to be successful in the global blockchain industry Strive for a greater voice.

ⅣWhat is blockchain technology and what is blockchain? A chained data structure composed of sequential connections, and a cryptographically guaranteed untamperable and unforgeable distributed ledger.

In a broad sense, blockchain technology is the use of blockchain data structures to verify and store data, the use of distributed node consensus algorithms to generate and update data, and the use of cryptography to ensure data transmission and access. A new distributed infrastructure and computing method that uses smart contracts composed of automated script code to program and manipulate data.


Generally speaking, blockchain system consists of data layer, network layer, consensus layer, incentive layer, contract layer and application layer. layer composition. Among them, the data layer encapsulates the underlying data blocks and related basic data and basic algorithms such as data encryption and timestamp; the network layer includes distributed networking mechanisms, data dissemination mechanisms and data verification mechanisms; the consensus layer mainly encapsulates network nodes The incentive layer integrates economic factors into the blockchain technology system, mainly including the issuance mechanism and distribution mechanism of economic incentives, etc. The contract layer mainly encapsulates various scripts, algorithms and smart contracts, which is a blockchain The basis of programmable features; the application layer encapsulates various application scenarios and cases of the blockchain. In this model, the timestamp-based chain block structure, the consensus mechanism of distributed nodes, the economic incentives based on consensus computing power, and flexible and programmable smart contracts are the most representative innovations of blockchain technology.

Extension information:

[Blockchain core technology]

Blockchain mainly solves the problem of trust and security of transactions, so it proposes four technological innovations:

1.Distributed ledger, that is, the transaction accounting is completed by multiple nodes distributed in different places, and each node records a complete account, so they can all participate in monitoring the legality of the transaction, and can also jointly testify for it .

The uniqueness of the distributed storage of the blockchain is mainly reflected in two aspects: First, each node of the blockchain stores complete data according to the blockchain structure. Data is divided into multiple copies according to certain rules for storage. Second, the storage of each node in the blockchain is independent and has the same status. It relies on the consensus mechanism to ensure the consistency of storage, while traditional distributed storage generally synchronizes data to other backup nodes through the central node.

No node can record the ledger data alone, thus avoiding the possibility of a single bookkeeper being controlled or bribed to keep false accounts. Also because there are enough accounting nodes, in theory, unless all nodes are destroyed, the account will not be lost, thus ensuring the security of the account data.

2. Asymmetric encryption and authorization technology, the transaction information stored on the blockchain is public, but the account identity information is highly encrypted and can only be accessed with the authorization of the data owner , thus ensuring data security and personal privacy.

3. The consensus mechanism is how to reach a consensus among all accounting nodes to determine the validity of a record, which is not only a means of identification, but also a means of preventing tampering. The blockchain proposes four different consensus mechanisms, which are suitable for different application scenarios and strike a balance between efficiency and security.

The consensus mechanism of blockchain has the characteristics of “minority obeys the majority” and “everyone is equal”. “Minority obeys the majority” does not completely refer to the number of nodes, but also the computing power and the number of shares. Or other feature quantities that can be compared by computers. “Everyone is equal” means that when a node meets the conditions, all nodes have the right to give priority to the consensus result, which may become the final consensus result after being directly recognized by other nodes.

4. Smart contracts, smart contracts are based on these credible data that cannot be tampered with, and can automatically execute some pre-defined rules and terms. Taking insurance as an example, if everyone’s information (including medical information and risk occurrence information) is true and credible, then it is easy to automate claims settlement in some standardized insurance products.

In the day-to-day business of insurance companies, although transactions are not as frequent as in the banking and securities industries, the reliance on trusted data continues unabated. Therefore, the author believes that the use of blockchain technology, from the perspective of data management, can effectively help insurance companies improve their risk management capabilities. Specifically, it is mainly divided into the risk management of policyholders and the risk supervision of insurance companies.



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