What exactly is blockchain? Double-spending problem, timestamps, mining... How to understand these keywords of blockchain? What is the relationship between blockchain and Bitcoin? Why is Bitcoin so hyped? Is blockchain a great revolution leading mankind towards an intelligent society? What kind of talents are needed to build a blockchain? Everything you don’t know and want to know about blockchain can be found in the eighth issue of "Rational Party New Technology News Hall".
Popular science writer at the University of Chinese Academy of Sciences
(middle) Zhu Xiaowu
Professor at China University of Political Science and Law
(right) Wang Feiyue
Researcher at the Institute of Automation, Chinese Academy of Sciences
Director, State Key Laboratory of Complex Systems Management and Control
What is the relationship between Bitcoin and blockchain?
Wu Baojun: What is blockchain?
Wang Feiyue: Everyone’s most basic understanding of blockchain starts with Bitcoin, but blockchain is not equal to Bitcoin. It is the technology that powers Bitcoin.
The building opposite is called Sigma Tower. It used to be the earliest research institute headquarters of Microsoft China. At the time, Sigma Building referred to Microsoft Research. The relationship between Bitcoin and blockchain is the relationship between Microsoft Research and Sigma Tower.
Wu Baojun: What is Bitcoin?
Wang Feiyue: Bitcoin is a peer-to-peer digital currency. Peer-to-peer is between you and me, with no other participants. Now that the Bank of China has issued currency, all circulation has regulatory agencies and is implemented through banks and stores. Individuals cannot print their own banknotes.
The circulation of Bitcoin means that if we want to transact, that is between us and has nothing to do with the bank. It's completely decentralized, and that's ideal, as long as we recognize each other. This is called peer-to-peer.
Wu Baojun: What if there is one more person?
Wang Feiyue: If everyone joins, this Bitcoin will be common to everyone, and the technology that supports this environment is the blockchain.
Blockchain technology can be understood as distributed accounting in a narrow sense. Everyone involved in the ledger is keeping accounts. Everyone has a ledger and it's all the same. If you lose me, I still have one, no one else to rely on.
The difference is that everything you remember is private. I can't see what you're memorizing, but I'll know it once you change it.
Wu Baojun: The underlying layer that Bitcoin relies on is the blockchain. Blocks are strung into chains. In other words, I or the three of us can form a block, right?
Wang Feiyue: But generally speaking, it needs to be scalable. Just the three of us are useless. Information is recorded in blocks, so blocks act like storage units. The way blocks are constructed is through mining, which is a mathematical method of generating blocks. A person or thing can form a block. The block is the carrier of information. Everyone has this carrier, and then they are strung together to form a blockchain.
What we remember on this carrier is the same, but what I give you is encrypted. To see the contents, you must have my private key. Once I change my stuff, everyone in the entire chain knows about it, so there's no way the content can be tampered with.
What problem does blockchain solve?
Wu Baojun: What does chain mean?
Zhu Xiaowu: Let me give you the simplest analogy. In the real world, if I give you a cup of tea, I lose it. After I give you this cup of tea, we can barter.
But in 2008, Mr. Satoshi Nakamoto came up with a new idea. If the amount in my account does not decrease after I give you my digital cash, but the amount in your account increases, then there is a problem. I can also pay this digital cash to Teacher Wang. This is known as the double spending problem. Spending the same amount of money twice is a false account.
In the digital world, the easiest way to do this peer-to-peer is to transfer money via WeChat using two mobile phones. WeChat will reduce the money in the account and credit it to the bank. But without the Internet, WeChat transactions would not be possible. How to achieve point-to-point transmission in the digital world without network?
Satoshi Nakamoto proposed a new method. Teacher Wang just said, if I want to pass a string to you, I must first pass the public key and private key encryption system. However, encryption alone is not enough. An important issue that easily arises is mutual accounting. Error or tampering.
Then Satoshi Nakamoto came up with a new idea. There is only one thing in the world that is irreversible, and that is time. So, he added another very interesting thing called timestamp. A timestamp is a date or time stamp that proves the order in which each account occurred. This is irreversible.
Recording timestamps requires what is called a proof of work. How do you prove you are qualified to record timestamps? You have to work your hardest and be honest. How do you prove that you work your hardest and are honest? You need to prove your ability by solving mathematical problems and solving long hash algorithm mathematical problems, and prove that you are honest and trustworthy.
Wang Feiyue: This is “mining”. The most important thing is to let everyone understand. What if I give you money and you don’t acknowledge it? Or what if I said I wanted to give you money but didn’t and gave it to someone else instead? If everyone on the chain is required to keep accounts, then no one can deceive others.
Wu Baojun: Everyone must record every transaction.
Wang Feiyue: Yes, this is the most basic form of a public chain. Later, private chains and alliance chains were developed. What we build is a federated chain between what everyone remembers and what only a few big shots remember.
Wu Baojun: All personnel involved in accounting are units that have joined the blockchain, and those who have not joined will not be counted.
Zhu Xiaowu: This is called a node.
Wu Baojun: Each unit added is called a node. Every action made by everyone must be recorded. Is this recorded automatically?
Wang Feiyue: It is recorded by a computer and there is a mechanism.
Wu Baojun: Does it mean that the more computers that join this team, the more stable the system will be?
Zhu Xiaowu: Yes.
Wu Baojun: If there are only two computers and one of them is broken, the blockchain will be useless. Therefore, blockchain is particularly dependent on the large scale of the Internet.
Wang Feiyue: This is the stupidest method. Originally, you could trust a person and let him keep the accounts, but what if one day you find that he is sick or has taken away the accounts? So it went to the extreme and everyone started keeping accounts. This is what decentralization means. Not decentralized, but completely centralized, with everyone at the center.
blockchain, infrastructure
Wang Feiyue: Everyone must remember a transaction, timestamp it, and give it an ID. Doing it again and again consumes a lot of resources. Therefore, the largest energy consumption in the future may be mining and accounting. Last year, the mining and accounting industries consumed one thousandth of the world's electricity. It will be even bigger in the future, and more than 90% of the electricity in the future is likely to be consumed on it.
But this is the price that should be paid. We want to enter a smart society and make everyone's life easier. We don’t have to worry about which central bank will issue more money, or how much more currency will be issued to devalue us... These problems can all be solved.
Just like building a highway now, it costs more than Qin Shi Huang spent to build a palace two thousand years ago. If you told people at that time that it would cost so much money to pave roads, they would definitely find it difficult to accept. But now a developed country cannot be called a developed country without highways. This is the price to pay for building social infrastructure.
To build a smart society in the future, this type of blockchain must be laid. This will be the highway of the future.
Wu Baojun: This is a kind of infrastructure.
Wang Feiyue: Just like the construction of the Internet, think about the development level of the Internet in the 1990s and 2000s. How far has the Internet developed today? I don’t know how much money was invested, but nothing was wasted. What it brings in exchange is the convenience of life and the improvement of efficiency. You don’t have to worry about your money being scammed or losing value for no reason, and you’ll live healthier.
It is precisely because of computers that everyone can keep accounts. Without computers, there is no point in having people in a village or a building keep accounts together.
Why is everyone mining like crazy?
Wu Baojun: Just now, Teacher Zhu said that you have to solve problems to prove your qualifications before you can keep accounts. Does this mean I have to prove myself by solving a problem before every accounting?
Wang Feiyue: No. Blockchains are not created haphazardly. The solution is to solve the problem of public and private keys. To solve a problem like this, given a number, ask which two numbers this number is multiplied by.
When this number is large, at least the current mathematical proof is unsolvable, so you have to try desperately to try these two numbers. Whoever tries first gets the right to build the next block.
Wu Baojun: Do you think my understanding is correct? As long as he solves this problem, he is qualified to solve other problems. This is a one time thing.
Wang Feiyue: You understand, someone has given a product of A multiplied by B. You must find A and B. Whoever finds it first will get the mine.
Wu Baojun: The computer used to mine this mine is qualified for accounting.
Wang Feiyue: Yes, if you build a block and others can use it to keep accounts, you will be rewarded with a Bitcoin.
Wu Baojun: That computer can only solve one problem, right?
Wang Feiyue: So there are many mining companies and tens of millions of servers to solve these problems. Given C, find A and B. Mining means finding A and B.
Wu Baojun: For example, if I solve a problem and get the result, I will be rewarded with a Bitcoin, and I will be eligible. If I get a C and then I find A and B again, I'll get another qualification. Does this mean I qualify once? Bitcoin?
Wang Feiyue: It will tell you how many gold coins it will give you after solving a problem, and how many gold coins it will give you after solving the next problem. Gold coins will become less and less.
Wu Baojun: What does this have to do with accounting?
Wang Feiyue: Accountants need notebooks. The number of pages in this notebook is specified. The question is who will make this page? Just through mining. Mining a block is equivalent to adding a page to the ledger.
Wu Baojun: Then turn on the computer and waste time.
Wang Feiyue: Yes, so at that time, mining consumed the most electricity in cities such as Ordos and Yunnan because water and electricity were cheap there.
Wu Baojun: During that time, they built a big Internet cafe and connected all the computers to mine.
Wang Feiyue: No, they built the computer room directly under the reservoir or next to the power plant.
Wu Baojun: Then let the computer solve problems 24 hours a day, and you will get a Bitcoin for each problem you solve.
Wang Feiyue: The reason why GPU sales have been so good in the past two years is because of the craze for mining.
Wu Baojun: How to get Bitcoin? Do you put the results online?
Wang Feiyue: No, as long as you are the first to solve it, you must post it immediately after solving it, otherwise others will beat you to it.
Wu Baojun: Once you solve a problem, declare it and let the other party recognize you.
Wang Feiyue: No declaration is required, everything is automatic. Automatic uploading and automatic authentication.
Zhu Xiaowu: Mining depends on how much time and energy you invest to prove that you are an honest person.
Wang Feiyue: Actually, it is to find out what the key of each blockchain is.
How does blockchain achieve decentralization?
Wu Baojun: Bitcoin is actually a derivative of blockchain technology. Can you say that?
Wang Feiyue: To be fair. To establish Bitcoin, blockchain was invented, but logically there is no necessary connection between the two. For example, a building that could house Company A, Company B, and Company C now houses a Bitcoin company. This building can be rented to anyone, but it was really built to build a Bitcoin company.
As soon as this building was designed, everyone discovered that they could also design such a building and do other things, so blockchain technology can do more than realize digital currency.
Wu Baojun: Does Bitcoin have a double-spend problem?
Zhu Xiaowu: No, Bitcoin has solved this problem.
Wu Baojun: Using global accounting to solve the double-spending problem is equivalent to establishing a financial system, right?
Zhu Xiaowu: Yes. In fact, I don't really like using the concept of decentralization.
Wang Feiyue: I use the entire center.
Wu Baojun: Can the two teachers explain what decentralization is and what full centralization is?
Zhu Xiaowu: Actually it’s in English. In other words, its original text is a third party, which means no third party is needed. For example, if you are a bank, the transaction between me and Teacher Wang does not require you. I would give the money directly to him.
Wang Feiyue: We trusted each other enough, so we traded directly. But if we are meeting for the first time, to prevent being deceived, it must be verified by someone we both trust.
Zhu Xiaowu: Assuming we don’t need a bank now, everyone here can prove that I have given money to Teacher Wang now. Everyone saw it, everyone agreed.
Wang Feiyue: There is also something to prove.
Wu Baojun: The so-called center refers to the authoritative organization that testifies for everyone. Decentralization means there is no need for a center and everyone can witness it.
Wang Feiyue: Everyone must witness it. I want to return the money to him, so I will tell everyone that I have returned the money to him, and you all should note it down. If you write it down, it proves that I have returned the money to him.
Wu Baojun: My understanding of decentralization is that everyone is the center.
Zhu Xiaowu: But my opinion is that this should be called an intermediary. Of course, I also agree with Teacher Wang’s views on the entire center. In fact, the original intention is to eliminate the need for third parties, which in the precise sense is disintermediation.
Wang Feiyue: Through complete decentralization, the purpose of disintermediation has been achieved.
Wu Baojun: The word "chain" refers to the reliance on the Internet to connect all blocks.
Wang Feiyue: No, it means the Internet, but it can be used without the Internet.
Wu Baojun: Not necessarily the Internet. Can I set up a LAN?
Wang Feiyue: If everyone kept accounts, there would be no need for the Internet. If you want to automate, you have to have this network.
Wu Baojun: It is a way of behavior that does not depend on the current Internet. A group of people sit in a room and use each other's notebooks to keep accounts. This is also a blockchain.
Zhu Xiaowu: Get the stapler and staple the ledger pages together. This ordering process is a chain process.
Wu Baojun: The three of us are now a blockchain. We only need to establish a trust system.
Wang Feiyue: If there were only three of us in the world, that would be enough.
Wu Baojun: And we don’t need mobile phones or computers. The three of us each take a piece of paper and write down any transactions that have occurred.
Wang Feiyue: So the most original definition of blockchain is distributed accounting.
Wu Baojun: Can blockchain technology replace Alipay and WeChat after its birth?
Wang Feiyue: That’s for sure. I believe that online banking, Alipay and other institutions are also thinking about how to use this technology. This is the question of who will build this blockchain.
Why is Bitcoin so hyped?
Zhu Xiaowu: In fact, Bitcoin’s white paper first defines it as a cash system. The original text is called cash, not cash. Why did Bitcoin appear later? Because we have to prove on the blockchain that you found this block, we will reward you.
First, to encourage people to be the first to find the block; second, to make people willing to record accounts on the discovered ledger when making transactions.
Bitcoin is actually an incentive system, just like a real economic system. Bitcoin was created when it was announced that a series of Bitcoins would be issued. Previously, what was recorded in the block was just a string of characters, just information. However, Bitcoin was created to reward people who record information on it.
Wu Baojun: The purpose is to hope that more people will enter this system.
Zhu Xiaowu: The white paper of Bitcoin calls it cash, an electronic cash system. It's not a coin.
Wu Baojun: After the reward is over, whether you can use it to buy things is a follow-up matter.
Zhu Xiaowu: Yes. In 2010, someone traded Bitcoin for pizza. This is the first time Bitcoin has been priced at roughly the equivalent of a few cents.
Wang Feiyue: At the beginning, no one knew how much Bitcoin was worth, and no one set a price for it.
The reason why Bitcoin rose was because it designed a mechanism to issue 21 million Bitcoins and then told everyone to obtain Bitcoins through mining. I also tell you a rule: after these mines are mined, the entire Bitcoin system will be built. It's still under construction, but no one knows how much Bitcoin is worth.
I'm just saying some people use it to buy pizza. Bitcoin has just come out, and no one knows what Bitcoin is. Anyway, it has been in the news, and someone is willing to be the first to eat the crab. You give me Bitcoin and I give you some pizza. Anyway, pizza is not a particularly valuable thing, so just treat it as a souvenir. But now he is rich.
Bitcoin itself is also a product. Having deceived so many people into mining, the news value is so great that the price is getting hotter and hotter. To a certain extent, it is even more nonsense than the tulip incident and the South China Sea stock market when the stock market first started. But now so many people know it, various currencies similar to Bitcoin have appeared.
Zhu Xiaowu: This is actually a bit like when people dug for gold in the early days. No one knew how much it was worth at first. From a practical perspective, gold is soft, inedible, and cannot be used to make cups, so it is of little use. But why did it become valuable later? Because it is particularly difficult to mine and very rare, it is easy to preserve and is not easily oxidized like iron.
As soon as people saw that this thing was good, they used it as an intermediary for physical exchange, and gold became a form of currency. But I think at first it was just a piece of gold exchanged for a cup of tea or a fried dough stick. In the end, I found that this thing became more and more important because of its scarcity, so the equivalent items in exchange became more and more expensive and abundant.
This is the same with Bitcoin. Initially, 10,000 Bitcoins were exchanged for two pizzas. After conversion, one Bitcoin is worth about 0.000 cents, but at its peak it rose to nearly $20,000.
Blockchain, a revolution towards an intelligent society?
Wang Feiyue: The reason why Bitcoin is great is that it is supported by a large system like the blockchain. Blockchain actually establishes a new banking justice system in the virtual world. The person known as Satoshi Nakamoto was dissatisfied with traditional national banks' behavior of randomly issuing coins and launching QE, and wanted to take back this power.
Wu Baojun: The so-called taking this back is not just for himself. He wanted to create a very objective system.
Wang Feiyue: Yes, no one should be fooled by this system.
Zhu Xiaowu: What he said in the original article is that it does not rely on trust, but is based on cryptographic verification. Traditional trust is based on trust between people. For example, we trust intermediaries and government powers. But blockchain is based on cryptographically verified trust.
Wang Feiyue: Looking only at Bitcoin or blockchain itself is to underestimate blockchain. In fact, it was a real revolution, turning something that was not a commodity into a commodity. For example, fashion was not a commodity in the past. Fashion became a commodity through textiles and the Industrial Revolution came.
Sima He, the founder of artificial intelligence, once said that there are two major things in the world that cannot become commodities. One is credit. How many people can one person trust at the same time? Equivalent to one person, 7 plus or minus 2. The average person can trust up to 7 people at the same time, the powerful person can trust 9 people at the same time, and the worst person can only trust 5 people. This comes from one of the most cited papers in psychology written by George Miller ( ).
How many people can a person trust in his life? There is one called 's, 150 plus or minus 50. You can only trust an average of 150 people in your life. Add 50 to a great one, and it becomes 200; add 50 to an excellent one, and it becomes 200; and reduce it by 50 or 100 if it's not so good. Of course this is just an approximate number.
Sima He won both the Turing Award and the Nobel Prize. Trust and attention, he said, can never become commodities because they cannot be mass-produced or circulated. However, blockchain uses artificial intelligence and knowledge robots to transform attention and trust into commodities that can be mass-produced and circulated.
Companies such as Taobao, Tmall, and Google are the first manifestations of this revolution. Then this expands the space for commodities - things that were not commodities before become commodities; it expands the ways to improve efficiency - you don't have to worry about this or that, you trust them all, and achieve the so-called decentralization, the cost is will be greatly reduced.
In this way, mankind found the north, a new "north". This "North" pinyin is called BEI, the big one. This is the smart economy. Unlike food, there is no diminishing marginal utility. Food does not have a long shelf life. If you eat too little, you will starve to death. If you eat too much, you will starve to death. This is called the Malthusian Trap.
The result is a world of increasing marginal utility from nothing. Last year's Nobel Prize was awarded to the increasing usefulness of borders. Because of the knowledge economy, we have completely entered a new era. Simply put, we are on the road, we are on the true road.
Real English is called TRUE - T is trustworthy (), R is reliable (), U is available (), and the last E is the two E taught in economics and management, one is called (effective) , one is called (efficient).
Do the right thing in the right way. Do the right thing in the right way. This is the core concept of the second generation Ethereum blockchain. The most important content is the smart contract. Although it is neither smart nor a contract now, it can be realized by adding knowledge robots and DAPP in the future.
Wu Baojun: What is DAPP?
Wang Feiyue: Distributed APP is DAPP. Mining is actually like this. This is a completely centralized APP. In this way, you are on the real path, and you are on the road to the second generation of blockchain.
D represents a kind of distributed complete centralization, and A represents autonomous automation. Everything is decentralized and more organized. What is achieved is organized order, order. This is DAO, the only way to go.
Transforming the philosophical concepts in the Tao Te Ching into engineering technology is the future, and this is the true meaning of blockchain. From the perspective of human social organization, this is a major change over thousands of years. From the perspective of human development, I think this is a major change that will take thousands of years to move towards an intelligent society.
Zhu Xiaowu: We used to say that we trust people, but actually we trust in mathematics. Our trust is in a mathematical sense.
Wu Baojun: In other words, traditional trust between people is subjective and particularly dependent on individuals, but individuals are not necessarily absolutely reliable. But if we have technology like blockchain, and we rely on natural language, mathematical language, a very objective system, then this trust will be upgraded and greatly improved. Improve our efficiency.
Wang Feiyue: Yes, but there are some valuable things that cannot be completely entrusted to machines, nor can they be completely entrusted to mathematics. Zhang Shousheng advocates In Math We Trust (our mutual trust is based on mathematics). I once told him, do you remember Gödel's incompleteness theorem? In math we trust. In the end, we can only believe in ourselves. At the end of the day, it's still about quality. It's quality not math. We can trust in ourselves, in everyone, in the public, but the most effective way is to combine it with "In Math", that is, with "in math".
Wu Baojun: Pure mathematics also has its own shortcomings. We still have to rely on the broad masses of the people, but we must also make use of mathematics.
Zhu Xiaowu: The integration of people and society, the integration of technology and society.
The socioeconomic value of blockchain
Zhu Xiaowu: General Secretary Xi mentioned in his speech that blockchain should be used as an important breakthrough, because if we combine these three things, it will become a focus of governing the country according to law.
What is the rule of law? Our society needs to establish legal and business systems, which means using law as the basic rules of the market to achieve an orderly and effective market economy.
How to achieve this goal?
First, pursue the greatest economic value;
The second is to pursue governance value. Governance means clarifying property rights;
The third is to confirm the development value. In other words, it must have both economic value and governance value, as well as a future for development.
Therefore, if we combine these points, from the perspective of the consensus itself, from the deep integration of the digital economy and the real economy mentioned by the 19th National Congress, to the improvement of the socialist modernization governance system and governance capabilities mentioned by the 19th National Congress. The final destination of the Fourth Plenary Session of the 19th CPC Central Committee is blockchain.
Blockchain has broad prospects, what kind of talents are needed?
Wu Baojun: The two teachers imagined the future of blockchain technology from a personal perspective.
Wang Feiyue: It has only been ten years since the birth of blockchain technology. We shouldn’t expect that many of the problems we face will be solved quickly by this technology. it's out of the question. This is a relatively long-term problem.
But I firmly believe that blockchain is the infrastructure for building a future smart society, just like highways, high-speed rails, airports, and docks. Without technologies like blockchain to build social credibility, establish social consensus, and achieve effective social governance, it is impossible to enter a smart society.
Blockchain is far beyond Bitcoin, far beyond digital currency. Its greatest effect is the intelligent governance of society and improving the efficiency of production and services. This is the core of it.
Wu Baojun: Mr. Zhu, how do you feel?
Zhu Xiaowu: Blockchain technology is in the ascendant, and I think it has great potential in the future. Today, there are many series of fake air coins and other issues. We just need to go back to the original scientific papers and remove the falsehoods while retaining the truth. Read the full text of the Bitcoin white paper written by Mr. Satoshi Nakamoto, and you will be able to understand a series of issues such as what consensus is, what is timestamps, and more.
We have huge potential in cultivating blockchain talents in the future. Now is the era of great development of blockchain, so I think we need to make great efforts in five aspects.
The first aspect is politics. We must understand the global landscape of blockchain and the new opportunities it creates in the digital economy era.
The second aspect is understanding the law. Because new technologies bring new challenges, some new requirements need to be put forward in terms of supervision, such as the recently proposed sandbox supervision.
The third aspect involves finance. Back to the blockchain, it is a kind of cash, a cash system, so it has a natural connection with finance. From the past fiscal finance, to monetary finance, to capital finance, to the current digital finance or token finance era, we need to understand some characteristics of finance.
The fourth point is to be good at management. Blockchain technology has brought some new changes, such as the new management model and new business model changes mentioned by Teacher Wang just now.
The last point is Akatsuki technology. The Academy of Sciences has a very deep foundation in technology, so we need to do in-depth research on the encryption algorithm and consensus mechanism of the blockchain technology itself.
Only by driving these "five categories" of capabilities can we lay the best talent foundation for the future development of the blockchain industry.
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标签： #Wang Feiyue #Wu Baojun #Blockchain #Mining #Bitcoin
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