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The greatest value of the blockchain lies in the realization of distributed assets



November 30, 2017 BlockShow ASIA Conference came to an end in Singapore. BlockShow is the world's top blockchain event hosted by The Cointelegraph, attracting nearly 50 heavyweights and more than 1,000 blockchain industry practitioners.


During this meeting, Prof. Li Guquan, a professor of finance technology and blockchain technology at Singapore's Shin Yue University, accepted an interview with Babbitt Information about the reason why he value the blockchain and the ways in which countries regulate cryptocurrencies differently. The figures The relationship between currency and legal currency society, and many views on the investment in blockchain.


Professor Lee early contact blockchain and digital currency is in 2012. After retiring from the financial sector, Li Guoquan studied finance in universities. With a double background in mathematics and finance, at first glance, bitcoin came into contact with Bitcoin. Li believes that Bitcoin is not only a tokens but more profound and will make a great contribution to human society. " It is something we deserve to promote by turning everyone into a banker. "


Therefore, starting from 2013, Li Guoquan will devote himself to the research and popularization of digital currency and blockchain encryption, as well as to the change of digital currency and blockchain in various countries' policy environment.


The following is part of the interview, Babbitt did not change the original intention of the editor:




The greatest value of blockchain lies in the realization of distributed asset ownership


Li Guoquan first of all essentially from the interpretation of the value of the blockchain, he believes that the most important contribution of the blockchain is to help people who do not have assets have assets in order to truly achieve inclusive finance:



"Through the blockchain and smart contracts, people are able to realize distributed asset ownership at a very low cost. Poor people are not poor because they have no job, but because they have no assets. In the social pyramid, our financial system is just the client who serves the top, The blockchain can solve this problem, so that everyone has their own assets.Through the Internet and the blockchain, things that were not previously exchangeable are now exchangeable and at very low cost. Give an example, the bullpen. A farmer borrows with usury loan to buy more than 30% of cattle, but after a cow is denominated, several of us subscribe for it. The farmer takes the cow, gives the calf, produces the milk, or sells the beef Back to us Farmers can cheat us, but because of the blockchain network certification, everyone knows about his cheating. Therefore, through the Internet and blockchain, P2P trading and value exchange can be carried out all over the world.
The blockchain has made work that previously had no way to pay for everything that is now paid for; transactions that were previously impossible to trade can now be traded; values ​​that were not valuable nowadays are worth the price of a real P2P transaction.
Many people will face unemployment after the AI ​​is developed in the future. Therefore, the low cost of the blockchain solves many problems, such as the unemployment problem and helps the government to solve the problem of aging. At first, many people in the bitcoin community were anti-government, but I think we should not think so. In fact, the government is our best partner. You can see the blockchain technology, great social significance. We should cooperate with good government.
Fifty per cent to 60 per cent of the world's people do not have a bank account and 80 per cent do not have access to complete financial services. These people are not in our financial circle or in the fabric of our social organization. So you need something to help 80% of people.
We need an inclusive society and a growing society, so we are studying how to achieve inclusive finance with a decentralized or decentralized financial technology, and only the blockchain can achieve this end. increase. "



Blockchain and tokens are indivisible



As an emerging global financial technology center in recent years, Singapore has always taken an inclusive approach to the blockchain and its regulatory policies are relatively clear and liberal. China took a completely different attitude. Since September this year, China has explicitly banned ICO. Li Kwok-chuen has regularly conducted blockchain popularization and research work in both China and Singapore since 2013, and he is deeply aware of the regulatory changes in the blockchain and encrypted digital currencies in both countries:



"China's growth in the blockchain industry is very fast, and China's most enviable business model is that although technology was not as good as that in California and Eastern Europe at the time, innovation in business model was very fast, so I am very envious China. I often go to China to give lectures, make lots of friends and admire them very much, in a country that supports the development of the blockchain and cryptocurrency.Therefore, in September this year, I feel very much pity when it comes to ICO. Because the blockchain and the ICO are indivisible. Without the cryptocurrency, the blockchain loses its biggest function - value exchange.
Why say blockchain can subvert the entire financial system? The existence of ICO and cryptocurrency can better reduce trading friction, enable very little value exchange, and distribute asset ownership.
There are three kinds of digital tokens, one is purely functional tokens, such as Ethereum, Zcash, etc., to carry out the token sale is completely outside the supervision of the Monetary Authority; one is the securities of tokens, such as the real estate fund packaging Into tokens assets, similar to the IPO, this type itself by Singapore law management, in accordance with the law to carry out business; the middle one is just the example I have a 'bovine', between the two, a not a bond, not a stock Even the original can not be traded, can not accurately define the nature of the now packaged as a token can be traded. This is a great contribution to humankind, because we have transformed this part of the entire economic system from inefficient to efficient.
Therefore, Singapore set up a special "regulatory sandbox" for this part of the middle that encourages innovation on the one hand while ensuring controllability while studying new ones. "



Why China will sell "across the board"?



So why China's regulators on the ICO "one size fits all"? Li Guoquan summed up the reason for "the contradictions of China's innovation."



"There is a contradiction in innovation in China, which has the best innovation capacity in the world, China is the largest sandbox in the world and China has a strong commercialization capability, which is also a drawback of China's innovation because innovation and commercialization The ability is too strong, investment is easy to quickly become speculative.This is a big issue that the Chinese government is facing and how to solve the very test-ability. Therefore, it is not wrong for the Chinese government to do it. From the perspective of social efficiency, the ICO is indispensable and really beneficial to people. The biggest problem is how to minimize speculation, so only through a clear law. And China has its own problems, because the country is large, which is a challenge to the rulers and policymakers. "


Blockchain project investment principles

This year, Li Guoquan and Shen Bo and other well-known community investors formed BlockAsset company, has invested 22 ICO, Prior to this, Li Guoquan as a personal angel investors also invested about 20 ICO projects. What is his investment principle? How to treat blockchain investment? Li Guoquan introduced to Babbitt:



"Investment is mainly invested in two aspects: decentralized technology and inclusive finance.Our investment is investment ecosystem, we view the return on the project is from the value of the cryptocurrency community, not the value of the legal community. The blockchain and the cryptocurrency community are isolated from the legal community, and we look at what we are creating and what we value if we can serve more people.
Many people do not understand this idea, they will ask how many dollars you make? not like this. The return on investment in the blockchain sector is not measured in terms of the return of the legal currency, but the value of the blockchain and the encrypted digital currency can not be measured by the value of the legal currency society. The most valuable time to encrypt monetary assets is when the legal currency is worthless; at the same time, it is of no value in the legal currency society when the cryptocurrency is of great value. So what will we do in the end return on investment? This is a network effect, and the more people benefit from it, the more community involvement it gets, the greater our return will be.
Why in some areas, some people are scrambling to buy bitcoin because of losing their worth in the local currency. So there is turmoil, when the government credit crisis, encrypted currency will be more valuable. Nakamoto original meaning is that the legal value of the lack of social value, Bitcoin will appear.
Another point, cryptocurrency itself is very valuable, it may not have the value of legal currency, the relevance is zero, because at that time to encrypt digital currency does not require legal currency to measure. "



Encryption of digital currency and the relationship between legal currency: parallel or counter?


According to Li Guoquan, although there is a counterbalance between digital currency and legal currency, the future will tend to go side by side and its relevance may be weaker and weaker:



"Because the definition of 'money' can change, money is a tool for the exchange of values ​​between people in the future in the Internet society, the currency is not the same, the value of the exchange is not necessarily the need for legal tender, the token will be It becomes a tool of value exchange between the Internet and the blockchain society, and is an asset owned by oneself.So we do not necessarily need 'money', but we need value. Prices are not the same as the value of the place, the price is in a unified market, we deal in the formation of the price, value is the value you agree with me. In a P2P environment, the exchange of value rather than price.
Assuming a glass of water is not the same value for everyone, it is certainly not the same in the general environment as in the desert. So in the world of cryptocurrencies, the price of each exchange is not the same. Therefore, in the world of digital currencies, exchange of value through smart contracts is not an exchange of prices. Now we also need to trade on the same exchange, in a single currency, at the same time, but in the future we can achieve a zero-value exchange without time and place restrictions.
Is there any trade-off between digital currency and legal currency? The ability of government to be decentralized is weakened. At a time when government capabilities are perfect, it does not make sense to decentralize. However, the status quo can not do this, so to have its center in the social status. When the entire financial system is perfect, you do not need to have bitcoin. Is there any resistance in the implementation of bitcoin? Sure there, but it sure will exist. "



Bitcoin and blockchain, and token sale bubble?



This year, token sale set off a wave of blockchain boom, and just recently, Bitcoin market capitalization has exceeded 1 trillion US dollars, so fast growth is there a bubble? Li Guoquan gave his view on the rapid growth of the cryptocurrency market:



"In fact, from another point of view, the total amount of bitcoin really only 21 million it? In fact, after the decimal point can have unlimited digits, while there are so many forked bitcoin. No problem, bifurcations can even countless.But where is the focus? Different fundamentals, the value of tokens is actually the community have the final say. Encrypting the digital money community is an inclusive and open community. We support anyone to fork, respect anyone's decision, welcome anyone with an inclusive heart, and welcome trial and error. If bitcoin is not good enough, then there should be tokens with better technical features, such as forking, but losing support if not shared with the community.
Shen, Lee's BlockAsset believes that the principle of cryptocurrency community is: wisdom, crowdsourcing, public comment, public enjoyment. In the community, there should be no exclusion and a competitive psychology. Instead, the community should be united to improve the community and serve the community. They should not bring in the bad habits of the legal community. "



Singapore Shinue University blockchain and financial science and technology professor, former Singapore Management University Principal adviser, Singapore Shen Jiwen Dean of Financial and Economic Institute, Singapore Economic Society vice president, Alternative Investment Management Association Singapore branch founding vice chairman, Singapore shares A member of the Exchange Security Committee, and a member of the Financial Research Council of the Monetary Authority of Singapore (PBoC). Professor Li is also the founder of several other financial and educational institutions, including the left bank of the United States and Singapore Fu Yee Financial Group.
The main research directions: blockchain and cryptocurrency, digital finance and online banking, digital banking, Asian macro finance, social effects investment, inclusive finance and global asset allocation.