Yao Qian, director of the central banks digital Monetary Research Institute: block chain landing needs a lot of improvement.

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 Yao Qian, director of the central banks digital Monetary Research Institute: block chain landing needs a lot of improvement.


First, the concept, advantages and disadvantages of block chain technology Block chain technology is the core supporting technology of digital encryption monetary system represented by bitcoin. The core advantage of block chain technology is that it no longer needs a traditional centralization mechanism. Only through the encryption algorithm, consensus mechanism, time stamp and other technical means, the point to point transaction, coordination and cooperation that do not depend on a credit center are realized in the distributed system, so as to avoid the data security prevailing in the centralization organization. Problems such as synergistic efficiency and risk control. Block chain technology originated in 2008. The narrow block chain technology is a kind of data structure combined into a specific data structure in a chronological order, which is guaranteed by cryptography and is not falsified and non forgery to centralization of the shared general ledger. It can safely store simple, successively related, and can be in the system. Internal validation data. The generalized block chain technology is a new multi centralization infrastructure and distributed computing paradigm, which uses encryption technology to verify and store data, use distributed consensus algorithm to add and update data and use code running on block chain, that is, intelligent contract, to guarantee the automatic enforcement of business logic. Compared with traditional technology, block chain has the following four advantages: First, it is difficult to tamper with, and more secure. In traditional information system security schemes, security depends on layer by layer access control. Through block chain technology, any person who records transactions can be accessed, but due to clever design and complemented by cryptology and consensus mechanism, the data recording mode of block chain makes it difficult to modify any data to change all subsequent data records. Practice has proved that such a database can ensure that the market capitalization of billions of dollars of bitcoin, under the global hacker attack, stable operation. Two is heterogeneous and multi live, and has strong reliability. Block chain each system participant is a remote multi live node, is a natural multi live system. If a node meets network problems, hardware failures, software errors or hacker controls, it will not affect the system and other participating nodes. The nodes in the block chain interact with the point to point communication protocol. In the case of the consistent communication protocol, the different nodes can use different programming languages and different versions of the whole nodes to deal with the transaction. The resulting software heterogeneous environment ensures that the overall network of block chains will not be affected even if a single version of the software appears, which is also the cornerstone of its high availability. The three is to have intelligent contract, automatic execution. Intelligent contracts have the advantages of transparent, credible, automatic execution and mandatory performance. Nevertheless, since Nick Szabo proposed in 1993, intelligent contracts have always been at the conceptual level. The important reason is that there has been no support for trusted code running environment for a long time, and it can not be automatically enforced. And the block chain is the first to make the idea of intelligent contract a reality. Four is the network direct cooperation mechanism, more transparent. The block chain provides a different way from the traditional way to connect the participants in a reciprocal way, to maintain a system jointly by the participants, and to make clear the responsibilities of the participants. It does not require the transfer of rights to the third party organizations, which is conducive to better cooperation between the parties. As a trust machine, block chain is expected to become a new cooperative mode with low cost and high efficiency, and form a new synergy mechanism with wider scope and lower cost. Although the block chain has these advantages, it also achieves the predetermined design target of bitcoin and supports the normal operation of the bitcoin system. But because block chaining technology is mainly used to serve bitcoin, there are obvious shortcomings and shortcomings in some aspects. First, performance and scalability can not meet the requirements. From the present situation, the performance of the block chain is mainly shown as the throughput and storage bandwidth can not meet the needs of the entire society. At the same time, bitcoin over time, the cumulative transaction data is growing, for ordinary computer storage, this is not a small burden. If only the size of the block is simply raised to improve the throughput, bitcoin will soon become a system that only a few large companies can run, which is contrary to the central design. In the public chain system such as bitcoin and Ethernet, these contradictions are the biggest challenges facing the system design. In the alliance chain, because the nodes involved in the bookkeeping are optional, the upper limit of the weakest nodes will not be too low, and can be improved by resource input, and then the components of the common consensus algorithm can be replaced by a full range of performance. But the alliance chain, which is supported by intelligent contract basis, has another test: intelligent contracts will be called and read and write block data each other, so transaction processing time sequence is particularly important, if only one by one, this will seriously restrict the processing capacity of the node. Two, data privacy and access control need to be improved. In the existing public chain, all participants can get complete data backup. All the data are transparent to the participants, and the participants can not obtain only specific information. Bitcoin achieves anonymous effect by partitioning the real identity between the transaction address and the address holder. So although we can see the address of each sender and recipient of each transfer record, it can not correspond to a specific person in the real world. For bitcoin, such a solution may be enough. But if the block chain needs to carry more business, such as registration of real name assets, or the implementation of specific loan contracts through intelligent contracts, how to save the contract information on the block chain and verify how to execute the contract in the case of knowing the specific contract information, and so on, there is no mature scheme in the industry at present. These problems do not exist in traditional information systems. Three, the governance mechanism needs to be improved. The public chain community has explored the upgrading mechanism of hard Forks and soft Forks, but the remaining problems need to be observed. Because the public chain can not be shut down, its error repair is also very difficult. Once problems arise, especially security vulnerabilities, it will be very fatal. In fact, by relaxing the constraint of centralization, many problems can be solved. For example, in a multi center system such as the alliance chain, it is useful to control risk and correct errors by closing the system to upgrade the bottom of the block chain, or emergency intervention, and rollback the data. For routine code upgrading, the controllable intelligent contract replacement can be realized by separating code and data and combining multi-layer intelligent contract structure. The rapid development of the Internet in recent years and its deep coupling with the physical world and strong feedback have fundamentally changed the mode of production, life and management in modern society. It is foreseeable that in the future between the two poles of centralization and de centralization, there will be a new field in which a variety of block chain systems have different degrees of non centralization to meet the specific needs of different scenarios. Two, the latest theory and practice of block chain technology With the prosperity of the community, the development of the research, the development of different applications and the deeper understanding of the limitation of block chain technology, on this basis, many solutions are put forward for the shortcomings of the block chain, mainly in the aspects of consensus mechanism, performance, privacy and security, governance mechanism and cross chain technology. First of all, look at the consensus mechanism. Consensus is the process or result that all parties agree on certain statements. In game theory, information known to everyone is shared knowledge, which is only a level of common knowledge. Common knowledge also requires everyone to know the information that others know, so that everyone knows that others know and agree with each other. Take Andersens fairy tale the emperors new clothes as an example. Everyone knows that the emperor is naked before the child pricks the truth. But this is common knowledge, not common knowledge. Block chain technology can skillfully transform common knowledge into high-level common knowledge by means of information broadcast, transaction signature and voting. Among them, node signatures and broadcasts play a role in letting others know that I know and approve the block so as to reach common understanding and acquire common knowledge. In bitcoin, the rule the longest chain is the effective chain of the whole network is a common knowledge. The miner uses the common knowledge to support the high order belief as the economic rational person, and guesses the decision of other miners, and eventually forms the Nash equilibrium. According to a follow-up study, 51% of the safety calculation hypothesis in the original paper is problematic. The existence of selfish mining strategy reduces the theoretical security threshold of bitcoin. Selfishly digging is simply saying that after digging the block, do not publish, continue digging, and dig out second blocks, then release it. If any other block is dug up in the process of digging second blocks, it immediately broadcasts the block it has previously dug. After theoretical calculation, if a miner has the power of 1/3, selfish mining is beneficial to himself. Therefore, based on the size of the calculated share, the influence of the miners is different, so we need to use the new calculation model to solve the game equilibrium point. The research of distributed system consensus algorithm has been studied for a long time. In the 80s of last century, the Paxos and all kinds of BFT Byzantine fault tolerant algorithms developed on the basis of Lamport are all belong to this kind, and the core of the distributed system is to achieve the consistency of the distributed system through the node vote. Bitcoin opens up a new path, superimposing economic incentives outside technology, and ensuring the overall consistency of the system state by consensus mechanism. The problem of the classical consensus mechanism is that, once the number of participating voting nodes is increased, the efficiency of consensus will fall so much that it can not be used; the problem of the central consensus mechanism is to waste a large amount of energy and the long time to confirm the transaction. Connell and MIT researchers have proposed a hybrid consensus scheme, which combines the Chinese consensus and BFT consensus organically. It is a new breakthrough. It is possible to have both advantages and avoid their shortcomings. The current research is still in progress. The second aspect of technological improvement is privacy and security. In the public chain, it is necessary to protect the transaction data, address, identity and other sensitive information, and also allow the bookkeeping node to verify the legitimacy of the transaction; for the alliance chain, the supervision and authorization tracking should be considered while constructing the privacy protection scheme. It is also possible to implement the privacy protection mechanism and privacy protection mechanism based on ring signature, group signature and other cryptography schemes based on ring signature, group signature and other cryptography schemes, and also the option of privacy protection mechanism based on ring signature, group signature and so on. Efficient homomorphic encryption scheme or secure multi-party computation scheme can realize privacy protection of transaction content, and the mixed currency mechanism can also be used to achieve simple privacy protection. Since the official operation of the Ethernet complex, there have been several safety incidents, the largest of which is the TheDAO incident. TheDAO is an autonomous venture capital fund managed by program code, which raised a total of 12 million ETH. Hackers exploit the security flaws of TheDAO intelligent contracts, and draw 3 million 600 thousand ETH from the ETH of contract management. Finally, the EIF foundation had to fork to solve the problem. Since the community has different opinions on the disposal of the bifurcations, there are two kinds of block chains in the ETH and ETC of the ether Fang after this event, and the people who insist that private property can not be deprived of any reason are left in the ETC. The TheDAO event reflects two problems: one is that the security of intelligent contracts, especially the public chain, is very important. After the emergence of loopholes or errors, it is impossible to fix the system, like the centralization system, by closing the system and concentrating the upgrade. Intelligent contracts often manage funds directly, and if there are loopholes, they will directly lead to economic losses. Therefore, stronger security measures are needed. At present, the focus of research in this field is to apply formal verification methods used to chip design or military control system, and apply it to intelligent contracts to avoid human error in the way of mathematical proof. The TheDAO event also reflects another problem, that is, the existing block chain lacks a complete set of governance mechanisms. When the community faces major decision-making events, how to let the community participate in the community, form a community opinion with some mechanism, and finally express it on the block chain. These decisions may be different proposals for technology upgrading, or the handling of emergencies such as TheDAO, or the adjustment of some basic rules of the block chain. If there is no governance mechanism, we can only solve the problem through soft bifurcation or hard forking, which will eventually lead to chaos and division. Chain governance is usually considered to have the following major advantages. First of all, unlike the highly conservative concept advocated by bitcoin, it can develop rapidly and accept the necessary technological improvements. Secondly, by establishing a clear de centralization framework, the known defects in informal governance can be avoided. People feel that informal governance is too unstable, and it is easy to split up or become too centralization in fact. Finally, chain governance helps to ensure the implementation of processes, thereby enhancing coordination and fairness and allowing faster decision-making. But the denouncement of the currency voting mechanism is that no matter where these mechanisms try, their voter participation will tend to be very low. Two problems are caused by low voting participation. First of all, it is more difficult to vote for legality because it reflects only a few peoples opinions. Secondly, attackers who hold only a small portion of tokens can vote around. In addition, some people believe that there are risks in chain governance, because the meta system is difficult to change once it is determined. Just like directly written code, once defective, it will be faster and easier to use. At the same time, chain governance makes it unnecessary for ordinary node operators to participate in governance. This makes the ordinary node operator do not need to make any decisions, but just follow the decisions made on the chain process. So when there is a chaebol minority chain governance, the interests of ordinary users will be incompatible and contrary to the values of public chains. Block chains belong to the public and serve the public interest. It is not to make the big money of encrypted money richer. Block chains should not be occupied by anyone, let alone a small number of super rich. Therefore, some people oppose the governance of the chain. Generally speaking, the governance mechanism on the chain is still in the process of controversy and exploration, and there is no unified opinion. We need further attention and research. Finally, the cross chain technology is discussed. The cross link technology can be understood as a bridge connecting all block chains to meet the asset flow, information interchange and application collaboration among different block chains. At present, the technology of block chain is numerous and diverse, and each of them becomes a faction, and there is no exchange of value and data between them. With the development of the industry, the interoperation between chains and chains is becoming more and more important. If the cross chain is not solved, each big block chain will be an isolated island, which will certainly reduce the vitality of the block chain community, thus limiting the development of the whole block chain network and the ecosystem. Cross chain technology can be applied to cross chain asset transfer, cross chain atomic transaction, cross chain data sharing, cross chain contract execution and central exchange. There are three kinds of Technology Models: The two is the side chain / relay (Sidechains/Relays). The side chain is a chain structure of anchoring original chain, but it is not the bifurcation of the original chain, but it extracts specific information from the data stream of the original chain, and forms a new chain structure, while the relay is the channel of cross chain information interaction and transmission. Whether it is side chain or relay, the function is to collect data from the original chain and play the role of listener. The side chain and the original chain can not directly verify the state of the square, because this will form a cycle, but it is feasible to contain only light nodes, and the corresponding validation logic can be realized by the chain protocol itself or the application contract. Generally speaking, the main chain does not know the existence of the side chain, while the side chain must know the existence of the main chain. The representative solutions are BTCrelay, RootStock, Polkadot and so on. The three is the hash locking (Hash-locking) technology. It sets interoperability triggers between different chains, usually a hash value of random numbers to be exposed in plaintext. The hash value is equivalent to the transfer code, and only the person who gets the code can get the money. At the same time, it also constructs two Redeem contracts, the two contracts need double signatures and time limits, the other signature, their own unsigned, and when their own signature, the assets returned to the original. One of the key technical designs is that a refund contract for the person who makes the hash language of the transfer is longer than the other person, thus protecting his rights. The representative scheme is a bitcoin lightning network. It is worth mentioning that cross link technology has also received the attention of some central banks. For example, the Stella central bank digital money test project, which was operated by the Bank of Japan and the European Central Bank, focused on single chain and cross link DVP solutions in the second phase. Three. Summary The progress of block chain technology, there are many aspects can be elaborated, in view of the relationship of time, I will do a brief report, misfit, please be criticized and corrected. It should be said that the current task of the regulator is not easy. In the face of the evolving block chain technology, the corresponding laws and regulations and technical standards should be considered synchronously, so as to strengthen supervision and prevent risk. In summary, the block chain is a new technology that may become a future financial infrastructure. It is the proper meaning of the financial science and technology work in China to carry out a thorough study of it. Block chain technology has advantages and disadvantages, and is still evolving. At present, if we want to realize the real landing of the block chain and support the actual business, we still need a lot of improvement at the technical level. At the just held National Conference on network and information work, general secretary Xi Jinping made a very important speech. He pointed out: the core technology is the important weapon of the country. We must make a determination to keep perseverance, find the center of gravity, accelerate the breakthrough of the core technology in the information field, to grasp the construction of the production system and in the technical industry policy. We should follow the law of technological development to make systematic technical layout, choose the best, and focus on breakthroughs. The general secretarys speech is a long term, we should be aware that the application of block chain in our country has gone through the curve, so the president of the Yi class also points out that the positive energy of the block chain technology and the better service to the real economy are also pointed out. We must conscientiously carry out the important spirit of the general secretary of the practice of falling into practice, work hard on key key technologies and not be made up by others. At the same time, we should promote the healthy development of the whole market and the ecological environment of the block chain technology. (the writer is director of the digital Monetary Research Institute of the peoples Bank of China)