Ant Financial: Blockchain Is More Important Than AI
Jiang Guofei, VP of Ant Finiancial, believes that blockchain is a technological revolution at the bottom. The logical confidence of Blockchain is to enable multiple parties to reach consensus. It is precisely because it’s a process that involves multiple parties that the technology is advancing slowly. And for the same reason, its impact is far-reaching. Compared to the AI technology, Jiang believes that the blockchain is more extensive, fairer and more open. Companies of different size can find their place and opportunity.
Blockchain-based flow of capital, logistics and information
Q: How does Ant Financial decide to participate in the wave of Blockchain technology?
Jiang Guofei: Everyone agree that blockchain will have a great impact in the financial industry, Blockchain solve the problem of shared ledger, smart contract, which is closely related to financial clearing, settlement and audit. It’s natural for Ant Financial to get involved in the area almost two years ago as it provides new business and opportunity.
Q: What is the biggest change brought to AF after blockchain is implemented?
Jiang Guofei: Many technologies have been implemented. We believe blockchain technology will bring more trust, including trust between various institutions and systems. In some cases, the distributed system instead of decentralized system has a great deal of connectivity. Because you need a lot of parties to participate, which requires some sort of trust between those participants. With distributed ledger and smart contracts, blockchain brings many advantages in terms of trust, which is beneficial for many of our business.
Q: In terms of decentralization of Blockchain, what kind of application scenarios that AF created?
Jiang Guofei: What we have started earlier was to integrate Blockchain with Alipay like public welfare。 Many people are willing to donate to fund veterans or children. In the past, the beneficiaries could only receive money after its being handled by agencies like the Red Cross and One Foundation etc. With Blockchain-based information flow, we know where the money come from and how it go through agencies and distributed to individuals. The flow of information and funds is very clear. The whole process is transparent.
Q: Can we achieve the same transparency with other existing technologies? Does it have to be achieved through blockchain?
Jiang Guofei: Blockchain technology itself integrates lots of other technologies. For example, it contains P2P routing, cryptography and consensus etc. From this perspective, it is more like a consensus-making technology. If blockchain was not createdThat’s how current technology evolves.
Q: Is there other application scenarios?
Jiang Guofei: We have also tried other applications that are closely related to decentralization like food security traceability. For example, Chinese are concerned about the safety of dairy products. Now the dairy products imported from Australia and New Zealand can be traced back to the very origin. Millions of products are going through the network information are stored on Blockchain. Customers just need to scan the QR code after receiving goods to learn the logistics information, including timestamp as freshness matters for some goods. The process is decentralized in its nature as it requires multiple parties to cooperate. Blockchain serve as the trust machine in the process because the records cannot be modified. It’s impossible to reverse the record. All participants can cross-examine the data so that the cargo is endorsed.
Q: From this perspective, the business scope of Ant Financial is expanding due to the blockchain?
Jiang Guofei: On the one hand, the blockchain has many applications in the financial industry. Of course, we will develop some core technology. For example, the Alipay account was originally related to our business because of the flow of funds. On the other hand, things like food safety traceability solve public concerns. New business could be developed from three levels: logistics, information flow, capital flow. Philanthropy or traceability tells you exactly how many steps you have taken, and what time each step basically takes, followed by what kind of logistics, which is itself a flow of information. Just as the traceability of a commodity is a flow of logistics, the commodity follows the flow of logistics, from one distributor to another distributor. In many cases, there are also cash flow. In a pubic welfare donation case, money goes to account of Red Cross from your account, then to the beneficiary’s account. The flow of information, funds and logistics are interlinked and involve with many of our business.
Reaching consensus with multiple parties is the difficult part
Q: What is the most difficult part for Blockchain implementation?
Jiang Guofei: The biggest challenge to promote blockchain technology, not only for Ant Financial but also globally, is that participants need to reach consensus. It can be understood that internal affairs does not need Blockchain as trust has already been established. But in reality many things often involve many parties, the issue of mutual trust involves many agencies, departments etc. So how do you get so many people involved in business discussions, that’s why consortium Blockchain is established. Consortium alliance is to solve the problem of mutual trust, I believe a lot of applications are delayed or slowed down because of this hurdle.
Q: Can you understand that blockchain is a more radical innovation than artificial intelligence?
Jiang Guofei: It can be understood that we just entered into a big topic – distributed ledger. Data is actually being circulated on distributed ledgers. It was a process to build mutual trust, which requires participants to see the value of common interest to join in. AI is a centralized place with lots of data, where a single entity or a department could make decision. Blockchain will be more influential. In theory, the data that everyone has exchanged can later go to somewhere else, producing other effects. But the process may be a little bit slower. It requires a lot of parties to see the commercial interests and common goal, and then form an organization or alliance. In recent years, Blockchain is getting more popular probably because some people may slowly begin to see clearly that it may have some subversive potential. Therefore, more and more players are getting involved for more possibilities.
Q: From the perspective of the entire industry, do you think there is a bigger opportunity for large companies or start-ups in this area? In Silicon Valley, we always like to talk about innovation dilemma.
Jiang Guofei: This is a very good question. If technologies such as blockchain are gradually accepted by everyone and solve the problem of trust, I believe there will be plenty of opportunities for both big and small companies. Basically, blockchain is an upgrade of infrastructure, a massive one. It’s not a single-point technology. There are so many scenes involved. Big companies or small companies will find their position accordingly. It is likely that many small companies will develop applications based on data while larger companies focus more on infrastructure.
Q: In the early days of the wave of AI technologies, say 2012 and 2013, big companies certainly had advantages like better machines and better data. Is this the same case in blockchain?
Jiang Guofei: I think blockchain itself may be more open, after all it is to solve the problem of facility. If blockchain grows to the scale of the Internet of Things, then it is really a huge undertaking that will involve sharing data among all industries. Applications can be found after data is shared. Small Companies can take the initiative to do applications. Large companies may pay attention to bottomlayer technology.
Q: You’ve always compared blockchain to the Internet of Things (IoT), which has been talked about for years but we didn’t see any signs of mass commercialization. Can blockchain activate the Internet of Things?
Jiang Guofei: The development of IOT to this point has been slow. We can see that the digital migration of physical world is happening. IOT has been mentioned a lot in technology discussions this year. Whether the integration between IoT and blockchain can bring both to a new level is uncertain. The integration involves the connection of the physical assets and the digital assets on blockchain. In fact, such integration relies on IOT. For example, in the “traceability” case, one need to scan the QR code to get info. The scanning created a digital asset. Another example is the combination of smart contracts and IoT. The smart lock has been deployed on a large scale in the short-term leasing market. When the leasing contract is signed, it says the tenant could stay from 1 March. Then the house is locked until that day automatically. Tenant can access the house by scanning fingerprint. It is a smart contract based on blockchain, the execution of the contract is related to IoT. We can see great potential in this regard.
Blockchain is not most efficient in some scenarios
Q: What is the core competitiveness of blockchain if we measure it within a company?
Jiang Guofei: There are several pieces. Blockchain itself has several layers, technology, system and applications, There is actually a lot of layers. There are many things that can be improved in technology level, such as the speed and performance of algorithms and some demo models. The demonstration model is to be explored by everyone. But there are many interests in the consortium blockchain. Therefore, the demonstration model will involve things like certificate of qualification. When Ant Financial is building a blockchain platform, reliability, safety and performance is of our primary concerns. The competitiveness of blockchain is related to business logic and many of its advantages are needed in systematic development of blockchain platform.
Q. What’s the dark side of the blockchain that you’ve seen so far?
Jiang Guofei: From a pure technical point of view, blockchain may not be the most effective tool in some systems. Because some centralized systems in some areas are running very efficiently. Blockchain requires a lot of machines to reach a consensus to solve the problem of mutual trust. If trust has been established in some systems, there is no need to use blockchain. Blockchain is not a panacea, it certainly has its own pros and cons.
Q: ICO bubble also bring some negative comments to blockchain technology. As a technician, are you waiting for the bubble to burst?
Jiang Guofei: As a technician, we see blockchain technology and tokens differently. But tokens are basically a incentive mechanism based on blockchain, which is difficult for public to tell the difference. We focus more on technology like Bitmain. We are not involved in any ICO or cryptocurrency. We focus on infrastructure or raising social efficiency. We believe that more applications can be developed when the technology is being improved. Then we can achieve more social value, which is what we care about more.