Blockchain is known as a disruptive technology that will reconfigure the key underlying infrastructure of Internet finance and even the entire financial industry, and its value in the financial field is waiting to be discovered. Specific applications are reflected as follows:
One, the application of the banking industry
Wallet and payment are the first areas in which blockchain technology is involved, however, this is also the traditional scope of business of the banking industry. What kind of changes can the arrival of blockchain technology actually bring?
Cross-border payments - a case in point:
CircleFounded in October 2013, Circle aims to make bitcoin "simple and easy to use, similar to the way that Gmail (Google's email address), Skype (Microsoft's VoIP phone), and other customer service tools are. ", the company quickly received significant funding. It received a $27 million investment in mid-2014, making it one of the most well-funded companies in the digital cryptocurrency space.
In 2015, Goldman Sachs and IDG Capital Partners led a $50 million round of funding for Circle, which in June 2016 received $60 million led by a Chinese investor and declared that it had set up an independent company in China, Circle China, and formed a local team, with Baidu and Everbright reached a strategic cooperation.
Circle utilizes Bitcoin blockchain transactions to provide instant, free money transfers around the world.Circle hopes to utilize Bitcoin as a free Internet payment network to enable the smooth and unimpeded flow of national fiat currencies around the globe. By partnering with overseas companies like IDG, Circle can offer financial services to users who use the legal tender of each country.
Despite the complexity of each country's regulatory structure for payment systems, progress has been made in cooperation between these countries. in April 2016, Circle received the first e-money license from the UK's Financial Conduct Authority (FCA), which sparked widespread interest in the industry. Subsequently, Circle announced a partnership with Barclays Bank, officially entering the UK market, since then consumers in the UK can enjoy the same fast transfer payments and buy and sell bitcoin and other services as consumers in the United States.
To make it easier for users, Circle has partnered with Apple. In iOS 10, Apple's iMessage supports users using Circle's bitcoin payment system. Jeremy Allaire, Circle's CEO, said:
"Consumers will benefit from iMessage's access to payment services, and it would be more difficult to install a separate app in order to pay for them. It's harder to install a separate app and go through a complicated setup process for transferring payment behaviors with friends, but having direct access to the iMessage service simplifies it a lot."
On September 13, 2016, Circle announced that users could pay anyone in the world via iMessage.
The advantages of blockchain for cross-border payments: low cost, real-time transactions, and high security.
Smart bills-application case:
Complex U.S. blockchain bill project bills and blockchain technology can be well combined, after the adoption of blockchain decentralized distributed ledger, changed the existing system storage and transmission structure, to establish a more secure mode of operation, to solve the problem of forged bills.
The complete reflection of the process of bills from their creation to their demise through timestamps, with their traceable history, gives this model a brand new continuous endorsement mechanism, which truly reflects the process of transferring the rights of bills.
The domestic Hangzhou Complex Beauty Blockchain Research Center has also preliminarily developed an open-source project of blockchain lending and borrowing note exchange based on Ether, which integrates the concept of using blockchain technology in multiple segments such as finance, catering, enterprise management and express tracking. Complex beauty blockchain network lending note exchange open source project as shown in the figure, the application of blockchain technology network lending exchange, can complete the claimed 150,000 transactions per second, no fee online transactions.
Blockchain-based note business has four advantages:
From the viewpoint of moral risk, the phenomenon of "one vote for many sales" in paper notes and the phenomenon of unsynchronized endorsement of payment in electronic notes occurs from time to time, but blockchain, due to its tamper-proof timestamps and openness across the entire network, no matter whether it is a paper note or electronic note, once the transaction is made, there will be no renegotiation of the transaction, and there will be no reneging on the transaction. , once the transaction, there will be no renegotiation phenomenon.
From the perspective of operational risk, since the electronic bill system is centralized operation, once the central server has problems, it will have catastrophic consequences for the whole market, and at the same time, the access of the enterprise net banking will transfer the risk to the bank's own network security problems, and the whole risk chain will be longer and longer.
From the credit risk point of view, with the help of blockchain data, it is possible to collect and evaluate the credit of all the participants and control them in real time.
From the perspective of market risk, a large number of asset mismatches in the intermediary market not only lead to their own losses, but also tie up the interests of banks. With the programmability of blockchain, not only can it effectively control the balance of participants' assets and liabilities, but also promote the authenticity of the whole market's transaction prices in response to the demand for funds by means of the transparency of the data, and then form a more realistic price index, which is conducive to controlling the market risk. The market risk.
Bank Settlement-Application Case: VISA
Bank settlement refers to the act of receiving and paying through the transfer of funds in bank accounts, i.e., the bank accepts customers' entrustment to receive and pay on behalf of the customer, and transfers the money from the payer's deposit account to the payee's deposit account in order to complete the liquidation of debts and liabilities between customers or the transfer of funds. In this process, the bank is not only the medium of exchange of goods, but also the intermediary of the liquidation of funds in social and economic activities.
Unlike domestic banks, which rely mainly on deposit and loan differences to make a profit, half of the profits of multinational banks come from intermediary settlement business, which is directly related to their fundamentals if they open up new business areas and reasonably reduce settlement costs.
VISA is the world's largest credit card company, and there is no doubt that the rise of digital cryptocurrencies will inevitably have an impact on its credit card payment business. Yet VISA has not always been resistant to e-currency and blockchain, but has adopted an open attitude.
In October 2015, VISA and DocuSign jointly launched a "proof of concept" project that uses the Bitcoin blockchain to record and store car rental data. The program combines DocuSign's Digital Transaction Management (DTM) platform and electronic signature solution with VISA's secure payment technology. It allows consumers to configure rental, insurance and other daily purchases, such as parking fees and tolls, in their cars and allows users to pay directly with their VISA card.
The peripheral applications didn't satisfy VISA. That same year, VISA partnered with Coinbase to launch the first Bitcoin debit card available in the U.S. On Nov. 30, at the UnBound conference in London, VISA's European Innovation Lab demonstrated a "proof of concept" money transfer app that allows people to send money over the Bitcoin blockchain to send money.
In September 2016, VISA launched Interbit, a blockchain-based payment system for interbank settlements, in partnership with digital payments startup BTL Group, to evaluate whether blockchain technology can reduce costs, settlement times, and credit risk for international transfers between banks.
A series of major moves in the last two years shows that VISA is beginning to recognize the value of blockchain technology and is working to make it a powerful tool for expanding its sphere of influence.
The advantages of blockchain in bank settlements: secure, convenient and smart.
Banks issuing digital cryptocurrencies internally In addition to leveraging blockchain technology in their established operations, the world's major banks have launched their own crypto-digital currency programs in order to reduce their own operating costs.
Advantages of blockchain in digital cryptocurrencies for banks: cost reduction.
Two, securities investment market application
Securities trading-application case: Linq
Securities trading market is an important application field of blockchain. The application of blockchain technology not only accelerates the speed of clearing and settlement, but also reduces the number of books that financial institutions need to maintain and ensures a more accurate audit trail.
The Nasdaq exchange (NASDAQ) was the first to take a bite out of the stock exchange market. In late 2015, it launched Linq, a trading platform that is based on Bitcoin trading technology for primary market companies. As shown in the chart below, Linq has the ability to record pre-IPO equity transactions of companies, which allows it to track transactions, shareholder and investor information, etc., which is valuable for analyzing assets in the private placement market.
Fredrik Voss, head of blockchain strategy at Nasdaq, is confident that the efficiencies offered by blockchain-based technology will be able to significantly enhance Linq's strengths as a private equity trading platform. Until now, no technology has really been able to move people away from paperwork, and blockchain technology will take it a big step forward and will drastically reduce the possibility of mistakes compared to manual processing methods.
Advantages of blockchain in securities trading: faster settlements, simplified accounts, easier tracking and auditing.
Equity Crowdfunding-Application Case: Little Ant
Funding has always been a chasm in front of creative ideas as well as entrepreneurship, and it is this chasm that has given birth to the world's first crowdfunding platform, Kickstarter. Kickstarter's operation is a typical platform business model, the platform's users on the one hand are eager to create and create people, on the other hand is part of the funds and is willing to provide financial support for new ideas, both sides *** with the same desire is to hope that the new ideas become a reality, and can be realized to continue to promote.
Blockchain-based crowdfunding platforms can raise funds by creating their own digital cryptocurrencies or digital assets, and by distributing their own "digital stakes" to early supporters, which are certificates for investors to receive shares in the startups they support.
Blockchain crowdfunding platforms usually have a three-layer structure:
The bottom layer is the blockchain network, which builds a decentralized distributed ledger;
The middle layer is the combination of the business logic and the blockchain,*** with the establishment of the account center, equity registration, equity certificates, equity transactions, equity management and other functions;
The top layer is the customer-oriented services provided by the various crowdfunding platforms. platforms' customer-oriented services.
In China, Ant is the first company to utilize blockchain technology to register company equity. Although this is an innovation, it is not an easy task to achieve legal compliance in China and interface with the physical world in terms of underlying logic and various details. After thorough research and analysis of our current legal environment, Little Ant has the potential to become a practical blockchain application.
Small Ant is a blockchain protocol based on blockchain technology that registers the issuance, management, and trading of various equity shares through a peer-to-peer network. Initially, it will use the equity of unlisted companies as an entry point, provide digital share incentive solutions for startups and equity management solutions for equity crowdfunding companies, and in the future, it will go over to the tradability of equity, i.e., "blockchain IPO", gradually blurring the boundaries between unlisted companies and listed companies.
The advantages of blockchain in equity crowdfunding: crossing time and space limitations, optimizing crowdfunding organization, and reasonable equity and benefit distribution.
Three, the insurance industry applications
Policy sales-application case: Bubi aviation accident insurance
Traditional aviation accident insurance has always been the existence of insurance counterfeiting, intermediaries raise prices and other issues. As the saying goes, "the fleece comes off the sheep's back", which is ultimately passed on to the consumers. And blockchain technology can provide an effective means to solve these problems.
On July 29, 2016, Bubi Blockchain cooperated with Sunshine Insurance to launch the "Blockchain+Air Accident Insurance Card", which is the first domestic mainstream financial assets to circulate on the blockchain.
Most aviation accident insurance policies only pay out when an airplane accident occurs, so it is not easy for customers to find out that they have bought fake insurance in most cases. In order to prevent the purchase of "fake policies", Bubi blockchain, relying on its multi-party data **** enjoyment characteristics, can trace the whole process of the card from the source to the customer flow, all parties can not only check the authenticity of the card, and to ensure the authenticity of the card, but also to facilitate the follow-up process, such as claims, and so on.
In order to prevent being middlemen to raise prices passed on to consumers, aviation accident insurance card list set up in the Bubi blockchain, there is no middleman, the insurance card list price will be very obvious down. According to information, this product 60 yuan to buy a copy, can be used 20 times, each time you can get up to 2 million yuan of aviation accident protection, equivalent to spending 3 yuan each time to get 2 million yuan of protection.
The advantages of blockchain in the insurance industry: real transparency, information security, traceability, clear claims process, low cost.