Blockchain is like a “war”, why has it been sacrificed without bleeding!
The concept of blockchain has been hyped up by the media in the past two years, just like a vigorous war, but it was sacrificed before it shed blood. Suddenly, like a leaf on a tuyere turned into a free-falling shot ball, it disappeared as soon as the wind passed.
I personally think that smart contracts should be the business scenario where blockchain technology is most likely to be widely used in the future.
Let’s assume a scenario. For example, I am a contractor and undertook a project to build a library for Zhejiang University. The contract amount is 10 million yuan. Assuming that the cost of the project is 8 million yuan, it is mainly used to buy machinery and equipment and pay workers’ wages, but I don’t have that working capital to advance this cost. Therefore, I must borrow from the bank, suppose I borrow 6 million yuan from ICBC. Since I am a private contractor and my credit rating is not high, the bank requires me to pay 15% of the loan interest. Assuming the construction period is one year, then I have to pay bank interest for 900,000 yuan out of the 2 million yuan I earn, and the interest paid is almost the same as the actual profit.
Today, many small and medium-sized enterprises in coastal areas such as Jiangsu and Zhejiang are similar. But in this example, the first part of my contract is Zhejiang University, which has a very high credit rating. If Zhejiang University can lend me its credit, and I can guarantee that once Zhejiang University pays, I can even return the loan to the bank, then the bank is willing to give me a lower loan interest rate, say 8. %.
At this time, the application scenario of smart contracts has appeared. By setting up certain algorithms, banks can verify the authenticity of the contract without seeing the specific content of the contract; and once the contract is signed, the algorithm can be automatically executed. No manual intervention is required. This can be said to have achieved a win-win situation for the three parties: the bank lends me a loan at an interest rate of 8%, and I can pay 420,000 yuan less interest, which is equivalent to an increase in profits; because my profit has increased by 420,000 yuan, I The quotation for Zhejiang University can be lower, such as 200,000 yuan less (so my profit still increases by 220,000 yuan), which is also good for Zhejiang University; for ICBC, because the contract is automatically executed, once Zhejiang University When the money paid to me arrives, the 6 million yuan principal and 480,000 yuan interest will be automatically transferred to the bank account, so that the bank will reduce the debt risk.
From this example, you can see the main differences between smart contracts and traditional contracts:
First, smart contracts can better solve the problem of information asymmetry and help establish market credit. In many cases, the biggest problem with traditional contracts is the information asymmetry between the participating parties or even multiple parties, and the resulting series of contract disputes. Through smart contracts, all parties involved transfer part of the authority to the algorithm. Through the setting of the algorithm, all parties have the right to verify the authenticity of the contract. This can effectively solve the problem of information asymmetry in the market and contribute to the establishment of a market credit system.
Second, smart contracts can be executed automatically without manual intervention. The core of the smart contract is the algorithm. Once the contract is confirmed, the algorithm will be executed automatically without human intervention. In this way, some problems caused by human interference in the execution of traditional contracts can also be avoided.
Third, smart contracts can reduce transaction costs more effectively. Because the smart contract incorporates various preconditions into the algorithm, there is no need to spend a lot of manpower, material resources and financial resources during the execution process.
Finally, for smart contracts, I personally think there are two potential risks:
First, because smart contracts are automatically executed by setting algorithms, there is no way for human intervention. If smart contracts become popular all over the world in the future, once there is a problem with the algorithm, it is likely to be a systemic risk or even a more serious crisis.
Second, smart contracts must be completely decentralized, that is, they must be completely separated from the existing clearing system. I think there is no possibility of realization in a short period of time, and it may take a long period of time.