Deng Chao, managing director of HashKey Capital, and Shen Kang, managing partner of Longwin Capital, discussed the differences in the development of Chinese and foreign blockchain infrastructure and investment opportunities.
Original title: “Included in the “New Infrastructure” Where is the application of China’s blockchain technology? 》
Author: Ma Jie’s article is reprinted with permission from the Chinese version of Bloomberg Businessweek
In recent years, blockchain has continued to become a hot word in various fields. In the first half of 2020, the National Development and Reform Commission also officially included blockchain in the field of “new infrastructure”. Due to the technical characteristics of openness, transparency, multi-center, and traceability, the important role and value of blockchain have gradually become prominent. What is the difference between the current Chinese blockchain infrastructure development and overseas? What is the future development trend of blockchain? Where is the biggest investment opportunity in the blockchain field? On December 11, 2020, at The Year Ahead Outlook Forum hosted by Business Weekly/Chinese Edition, Liu Feng, editor-in-chief of Lianwen, Deng Chao, managing director of HashKey Capital, and Kang Shen, managing partner of Longwen Capital The topic of “Blockchain Infrastructure Construction and Investment” was discussed and prospected.
From left to right: Deng Chao, Managing Director of HashKey Capital, Shen Kang, Managing Partner of Longman Capital, and Liu Feng, Chief Editor of Lianwen (host)
The following is a record of the content of the round table discussion:
- Moderator: Liu Feng, Chief Editor of Lianwen
- Guest: Deng Chao, Managing Director of HashKey Capital
- Guest: Shen Kang, Managing Partner of Longman Capital
Liu Feng: I am very happy to invite two guests today to discuss topics related to blockchain infrastructure construction and investment. In the morning, we heard quantum computers, robots, and traditional financial institutions like HSBC talking about the topic of “new infrastructure.” Since the end of 2019, both the central and local governments have been discussing the topic of “blockchain”. Blockchain has become a buzzword for many people. It is related to technological innovation and is inseparable from innovation in the financial field. Today’s two roundtable guests, both of whom have been engaged in traditional finance, and later devoted themselves to blockchain-related investments, with remarkable results. First of all, please introduce yourself, and answer a question during the introduction: What is the difference between blockchain investment and currency speculation? When it comes to “blockchain investment”, there are many “coin speculation” topics. You can introduce yourself from your experience and clarify this concept for everyone.
Liu Feng, editor-in-chief of Lianwen
Deng Chao: Hello everyone, I’m Deng Chao , managing director of HashKey Capital. I used to work in traditional finance, first in fund companies, then in financial holdings, and also in financial big data companies. About five or six years ago, under the premise of group strategy deployment, I entered the field of blockchain investment. .
Teacher Liu wants me to share with you what is the difference between “coin speculation” and “blockchain investment”? On the whole, I think blockchain investment is a large range. From the perspective of professional investors, investments in traditional fields are mainly divided into primary and secondary markets. If it is an individual or retail investor, it is more involved in the secondary market. Taking institutions as an example, we have taken blockchain as a strategic business since 2015, with a dedicated blockchain investment fund, a dedicated blockchain research and development team, and a dedicated blockchain incubation system.
In China and even Asia, we (HashKey Capital) should be the first professional institution engaged in blockchain-related investments. In the past six years, we have invested in more than 200 companies worldwide, and more than half are overseas. Of course, this is the primary market for blockchain investment.
Deng Chao, Managing Director of HashKey Capital
As Mr. Liu said, the big difference between blockchain and traditional technology is that blockchain has financial attributes since its inception. We first came into contact with the blockchain and learned about this field through Bitcoin or information related to speculation, but I want to clarify: Just like the early days of the Internet, the birth of the blockchain will be accompanied by some misunderstandings by the traditional mainstream media. Or prejudice, there is a certain cognitive or understanding difference. In fact, most individual users first learned about the “blockchain” technology through Bitcoin, but the real subjects participating in this market are not individuals, but institutions. In the early days, most institutions gathered in the primary market, and the compliant secondary market should only appear after 2018, mainly in the United States, Europe, Japan, Singapore, and Hong Kong. Yesterday there was a piece of news in Singapore that DBS and Singapore Exchange launched a new compliant secondary market platform for encrypted assets, which allows professional investment institutions or investors to enter the field of digital assets in compliance. In contrast, “coin speculation” in the traditional sense is more about the participation of individual investors.
Shen Kang: Hello, everyone. I am Shen Kang , the managing partner of Longman Capital. We do equity investment in China, mainly focusing on the fields of blockchain, Internet of Things, and big data. We have also made some blockchain investments overseas. “Blockchain investment” is a very broad concept, including some “coin speculation” that everyone understands, such as Bitcoin and Ethereum, which are also very valuable in our opinion. We are also trying to give Bitcoin, The value of a blockchain public chain network like Ethereum is to be evaluated in the long-term or mid-term, because it is difficult to judge in the short term. Whether it is looking at the primary market or the secondary market in the blockchain field, whether it is looking at equity projects or looking at the native tokens or tokens with financial attributes of the blockchain, it is completely possible to invest in accordance with the concept of value investment of.
Liu Feng: Bitcoin has become a type of asset in the blockchain that many people are familiar with. At the same time, when everyone talks about blockchain, they will treat it as a future-oriented technology. As an emerging technology, blockchain is obviously not just digital assets or investment products with financial attributes, there should be real application cases. Can the two guests share with you the existing blockchain technology application cases you have seen?
Deng Chao: I think your topic is very good. Most people’s understanding of blockchain actually mixes two concepts together: one is assets and the other is technology.
Assets are what many people talk about. You buy bitcoin, this coin, and that coin. What is Bitcoin? Bitcoin is digital gold. Other digital assets are more like stocks, which can be regarded as proof of income for blockchain startups. The names “digital currency” and “bitcoin” are definitely misleading, and should be called “digital assets” to be accurate. It turns out that many colleagues in traditional finance would challenge me and say, “Why do you create so much’currency’?” In fact, the name is translated from English, and it is called “digital assets” to be precise.
From the perspective of “digital assets”, how to value or judge assets is the same as traditional finance. The current research director of our team used to be the research director of a securities firm. How he sees the market is the same as before. For example, looking at the industry is macro research, looking at subdivisions and tracks is sector research, and looking at projects is individual stock research. So no matter from the methodology or from the practice, it is the same.
From the perspective of the development of blockchain technology, it is like the early days of the Internet. At present, the maturity of the blockchain is about at the stage of Internet development from 2000 to 2002. Technology has begun to take shape, business models have begun to be promoted and explored, and some of them have already seen the prospects and produced actual social value.
Blockchain technology itself may not be able to create new fields or new industries, it should create some new value together with many other stored technologies. There are many things in the financial field, such as making payments, making transfers, and cross-border payments. In other financial fields, such as the underlying facilities related to transaction settlement, there are also some typical cases. There is also a more traditional one, which is in the field of data, such as data security, data privacy, and data traceability. For us, it is not only for the blockchain technology itself, but also for the traditional data-related technology. We are very fortunate to have participated in the investment in a secure multi-party computing (MPC) project PlatON with Mr. Shen Kang in China. This is very influential in the global privacy field and has great significance for data verification and privacy protection. There are also many Applications.
Shen Kang: I recently read a research report on Ubin, a “digital currency” promoted by the Bank of Singapore. Ubin conducted tests and research in five years and five stages. This year is the fifth year and the tests are all completed. This test report analyzes there are about 150 or 60 blockchain projects in the world, mainly in the case of blockchain applications in Asia. The report also analyzed if these application projects are based on Singapore’s digital currency Ubin, what will be the effect of payment and settlement with digital currency at the bottom. We can see that the efficiency improvement is very powerful.
Kang Shen, Managing Partner of Longman Capital
I think Wanxiang should be the best for domestic blockchain applications. Because Wanxiang has not only the industrial side but also the financial side. After they apply blockchain technology to the industry, they can connect financial resources to help companies reduce costs and increase efficiency. The most direct of these is to help companies reduce financing costs. These applications have actually occurred and are very practical. Land is creating value. Chairman Xiao Feng of Wanxiang Blockchain proposed the concepts of “Internet of Things 3.0” and “Distributed Cognitive Industrial Internet”. Whether it is Internet of Things 3.0 or distributed cognitive industrial Internet, they all need a combination of technologies To achieve this, there is a common core technology in it is the blockchain. You can’t do without a blockchain. I think in the future, everyone may talk more about what the blockchain application is. Just like when we talk about Amazon and Meituan now, we will not say that it is an application of the mobile Internet. The blockchain will sink and become an infrastructure. , Will become ubiquitous and senseless, but you can’t leave it.
Liu Feng: When talking about technological innovation, we often involuntarily compare China with overseas, especially Silicon Valley) =. When we list technology like blockchain as a very important technology for the future of the national economy and people’s livelihood from the national level, we have been emphasizing the concept of “self-intellectual property rights. I personally feel that the blockchain itself is a technology based on the open source community, saying that it should be borderless, but in fact, there are indeed different teams and different cultures that influence the development of this technology. . Can you please share with you from the perspective of your own experiences and different projects: Do you see any gap between China and the world in terms of blockchain technology research and development? In other words, what are the advantages of China?
Shen Kang: In terms of blockchain technology, if you look at the technological development of public chains, such as the design of consensus mechanisms, overseas is indeed a lot ahead of us. But China has taken the blockchain as one of the core facilities of the new infrastructure, or one of the core innovation breakthrough technologies. In terms of the underlying technical design and implementation of the “consortium chain”, I think we are no worse than foreign countries. Because many “chain” technologies themselves are also open source, you can take them and use them and change them to see what you can use. China Electronics and Information Technology Standards Institute recently made an evaluation, and the PlatONE alliance chain of Matrix Yuan and Wanxiang ranked first. Whether in terms of performance or reliability, it can already support a large-scale business scenario and application requirements, and it is based on national secret standards.
On the other hand, China has the world’s largest and most complete industrial Internet and Internet of Things system, as well as the world’s leading 5G base station construction. Once the People’s Bank of China launches DC/EP digital currency, there will be no second country in the world. Push with such intensity. In some respects, China has very strong institutional advantages. Under the superposition of these institutional advantages, we will see a huge market and a huge application environment supported by, brought and given to these blockchains. Opportunities for technology companies to try applications. In these fields, we will accumulate and form a technological advantage. For example, we now see that there are some projects in the Internet of Things industry and at the hardware level of the communication module to achieve data on the chain, and even to the chip level, to solve how the data is reliable , Safety on the chain, I believe that after some time accumulation, in these areas of blockchain technology, we will lead the world.
Deng Chao: In the past two years, we have seen more than 1,000 blockchain projects worldwide. Basically, we have seen more than 10 projects every week, and more than half are in the United States. One obvious difference is that overseas projects are more low-level, while Chinese or Asian projects are more applied.
I think this is very similar in the Internet field. Our strength lies in the ability to apply and play a basic technology well, and we have trained many good product managers and engineers in the Internet era. The technology can be well commercialized and promoted well on the basis of sufficiently mature technology. This is a difference I have seen from the product direction.
Second, in terms of application landing in China, it has a great advantage over the United States or other markets. The way Chinese industries are promoted is different from overseas. For an early-stage industry, the government-led promotion will support some advantages that are very suitable for its development. Such as the advantages of the development environment.
Before October 24, 2019, before the Political Bureau of the Central Committee did not raise the blockchain to a national strategic level, many traditional institutions were “talking about the discoloration of the blockchain”. After October 24, 2019, we joked that colleagues who have not dealt with for many years can proudly tell him what I do. They used to wear colored glasses to see blockchain investment.
Since then, blockchain investment has had a good development environment. There are now a lot of government-backed industrial funds that are beginning to invest in blockchain projects. Several traditional industrial funds and government-supported industrial funds that I have contacted are beginning to set up special blockchain funds, and have invested in many companies in the blockchain field. These companies are technology-driven companies with a very long-term layout. Correspondingly, there are some business scenarios that may not be open to such an early technology, but will now be open, such as the aforementioned robot. In the field of data, blockchain may be used in people’s livelihood and government affairs. This is a very large scenario, and it is a very favorable environment for the implementation of the blockchain industry.
On the other hand, in foreign countries, more companies are fighting alone and need to create such an environment by themselves. A single company pushes from bottom to top, and the resistance is very large.
Liu Feng: The last question, please draw a key point for investment opportunities in the blockchain field: What are the most noteworthy points for the future development of this industry?
Deng Chao: In our perspective, we will not call a field that has not yet become an “industry”, but we will still regard it as a subdivision. Our perspective is more to invest in blockchain as an emerging ecology.
Our investment is mainly two pieces: technology and commercial applications. Before 2019, we will invest more in technology, and after 2019, there will be more business applications. At the technical level, the basic technology has basically taken shape. We will focus on the performance-enhancing technology. For example, how can the blockchain system TPS (transactions per second) be upgraded to be able to carry real commercial application scenarios and support Reaching 100,000 or more than 200,000 transactions per second-this is one of our investment directions.
The second direction is commercial applications. There are two business applications. One is the blockchain financial infrastructure. This field has transactions, custody, clearing and even insurance. If this field is regarded as another emerging financial market, the underlying infrastructure of this market is very much in need. of. In addition, some of the above financial activities, such as transfer, payment, and lending, are real applications and needs. We invested in a cross-border transfer company in Southeast Asia and a digital asset lending company in the United States. From the perspective of volume, it may not be as big as the traditional financial market, but it should not be ignored. The market value of the entire digital asset is close to the trillion dollar level, which is worthy of attention.
Shen Kang: We are very concerned about the combination of the Internet of Things and the Industrial Internet and blockchain. Why is the business model of the Internet of Things difficult? On the one hand, whether the Internet of Things or Industrial Internet 4.0 is good, the basic technology combination it needs is not mature before. For example, it turned out to be 4G, the network is unstable, and it cannot meet the very stable and timeliness slicing network environment required by industrial or IoT equipment. On the other hand, the Internet of Things lacks a “commercial soul”, which is actually what blockchain technology can give. The business model of the mobile Internet can come out, but the business model of the Internet of Things cannot. It is because in the Internet of Things industry, unlike individuals in the C-side business environment, companies need data to be completely credible. After data collection, how can the data be completely credible? How can data form a data asset so that companies are willing to share it? How can people be willing to use the data for transactions and liquidation under the premise of privacy protection? A certain company can sell data assets, and I can also buy the data assets I need. You will find that the underlying facility for this transaction must be a blockchain, which other networks cannot do. We believe that innovative companies that can solve these problems or are committed to solving these problems and can connect the business models of the Internet of Things and the Industrial Internet are of great value. If we look in this direction now, I believe we will see many good investment targets.
Finally, I want to say, what will I focus on in the next two years? I think one of the biggest concerns is the central bank’s digital currency. Tomorrow is “Double 12”, our country will start to try “Double Offline” payment in Suzhou first. You may not feel this deeply. There are Alipay and WeChat. Why do you need this? But you can experience it, it is not just for the C side. We have envisaged many business scenarios, which are application scenarios that use blockchain technology to reduce costs and increase efficiency and improve efficiency. If you have a central bank digital currency at the bottom, then the original blockchain technology only increases your efficiency from “1” to “2” and solves some problems. But if your bottom layer is “central bank digital currency” instead of With the current financial payment and settlement system, your efficiency increase will be “2” to “5”, or even “2” to “10”.
I think the central bank’s digital currency is China’s most important blockchain infrastructure construction work in the next two years, and there is no “one”. Someone might say that DC/EP did not follow the blockchain technology route. I think this argument is not important. DC/EP’s point-to-point, token paradigm, programmable, distributed network, and verifiable bank nodes determine this. It is a “blockchain-style” payment network that can perfectly support various blockchain applications. It can be imagined that if everything can be paid in the Internet of Things environment, and transactions are cleared, and settlements are completed in real time, and naturally cross-border, what efficiency and energy release will this Internet of Things be like? This is not something the existing financial system can support. I think the country wants to understand this, so it spares no effort to push the RMB digital currency, not just for us to receive a red envelope or pay for a transportation card.
Liu Feng: Both of you worked in China’s largest and most successful fund company before, and then moved to the field of blockchain investment. The blockchain investment field is still at a very early stage, with many pits, but the opportunities are also very large. I hope that the sharing of the two will give some very good inspiration and enlightenment to the friends present today. Thank you again, and thank you everyone here. thank you all!
Source link: www.bbwc.cn
