Blockchain technology is open source. What supports BCOS's idea?

Blockchain technology has been developing rapidly since it was first mentioned in 2008. At the same time, a large number of in-depth articles on blockchain systems in different industries have been produced on the Internet, which have made many in-depth explanations from the underlying technology, network structure, consensus algorithm, etc. However, among these contents, in addition to the technical system of blockchain, what is its core value that is often mentioned? Is it better performance, more convenient architecture, more reliable technology, or other factors? Regarding this issue, at the blockchain open source discussion meeting on August 14, 2017, leaders from Weizhong, Wanxiang, and Matrix Yuan summed up a very appropriate word, that is, "trust".

Obviously, the blockchain open source platform BCOS jointly developed by WeBank, Wanxiang Blockchain and Matrix Yuan has integrated many very good mechanisms brought by blockchain technology, such as better data collaboration, identity authentication, asymmetric encryption algorithms, introduction of technical governance functions, real-time point-to-point clearing and settlement systems, and even some decentralized collaboration systems. However, from a technical perspective, centralized systems can actually do all of this, and even do it better from a purely technical perspective.

So how do we view BCOS's efforts to integrate trust, the core issue of blockchain technology, into users and enterprises through open source? How does open source solve a series of "trust" problems: Where does trust come from? What kind of trust does blockchain bring? Does this "trust" still have a role in the new blockchain ecosystem?

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Okay, let’s start with why the three companies want to create an open source blockchain platform BCOS.

The three companies jointly work to build BCOS, an open source blockchain platform based on trust

In the past two years, the "distributed business" model with the main features of multi-party participation, shared resources, intelligent collaboration, value integration, and model transparency has begun to rise. In order to realize the sharing and transparent rules of distributed business, distributed technology with open source as its main feature has also been able to play its advantages. Blockchain technology, distributed ledger technology, etc. have gradually become the core representatives of cutting-edge technology.

Matrix Yuan, a company led by former China UnionPay veteran Sun Linlin and a leading manufacturer of distributed ledger technology , had its first tripartite communication with WeBank and Wanxiang last year. Its clearing and settlement solutions based on distributed ledger technology were unanimously recognized by WeBank and Wanxiang. Based on the technical route and WeBank’s understanding, it maintained a high degree of consistency and launched the first trust-based, open blockchain open source platform BCOS.

Different from the traditional trust mechanism based on a single credit endorsement entity, the trust mechanism of blockchain is the common trust of multiple participants in transparent and credible rules and trust in objective information technology. Therefore, in order to increase trust and full transparency, reduce or even completely eliminate human intervention, blockchain has appeared in the form of open source technology since its birth, and most blockchain technology platforms also exist in the form of open source communities.

Ma Zhitao, Vice President and Chief Information Officer of WeBank, said that the open source of blockchain technology is a very important step for the development of the entire industry. Only with this foundation can the trust mechanism of the enterprise be established, while also meeting the various needs of the enterprise.

First: Technical requirements

In terms of blockchain technology, peer-to-peer collaboration, fairness, justice, and transparency are the characteristics of blockchain technology itself. With an open source foundation, the code is fully open and transparent to users and enterprises. Only through the participation of multiple parties and customized rules can the peer-to-peer collaborative business model be put into operation. This is also the first step that blockchain must take.

Second: Market demand

For the Chinese market, although blockchain technology is very popular in the Chinese market, more companies do not focus on scene applications, but instead focus on the research of the underlying blockchain technology. Through the combined strength of Weizhong, Wanxiang, and Matrix, the three companies have created and opened up the underlying platform, which is open source to the outside world, allowing more companies to focus more on the implementation of blockchain scene applications, which is an important foundation for promoting the development of domestic blockchain.

Third: National conditions and needs

Whether it is technology or market, the development of blockchain is still dominated by foreign institutions, but the Chinese market has its own characteristics and demands that foreign institutions cannot understand and grasp. By open-sourcing the underlying technology of blockchain, we can focus the strength of domestic enterprises and create an ecosystem that conforms to national conditions, an underlying platform that can be recognized by regulators and the market, and further help us stand at the forefront of the entire blockchain industry.

Sun Lilin, founder of Matrix Yuan, said that he hopes to create an enterprise-level blockchain open source underlying platform that is in line with national conditions, has a low entry threshold, is easy to use, and can be scalable for commercial use through the open source of the BCOS platform, so as to meet the needs of various industries in responding to the emergence of distributed business. He also hopes to form a sustainable international technology ecosystem through the construction of an open source community.

BCOS platform overall architecture diagram

Let "Trust" complete the first supply chain financial service platform

The phenomenon of credit sales is becoming more and more common in economic operations. According to data from the National Bureau of Statistics, at the end of 2016, my country's industrial enterprises above designated size had accounts receivable of 12.6 trillion yuan, and the average payment period of various industries was about 90 days, which implies huge financing needs of enterprises. Compared with the huge accounts receivable, my country's annual commercial factoring volume in 2015 was only about 200 billion yuan. It can be seen that there are still a lot of financing needs that have not been met, so the supply chain finance industry has huge room for development.

Xiao Feng, Chairman and CEO of Wanxiang Blockchain, a subsidiary of Wanxiang Group, which started out as a car parts company, believes that the supply chain for car parts manufacturing already exists in the traditional way, but because a large amount of supplier funds are occupied in the supply link, in order to solve the problem of suppliers' attitude, Wanxiang reconstructed the supply chain into a proper car parts supply chain through an agreement, and used the underlying technology of the BCOS platform to develop a supply chain financial service platform to facilitate the accounts receivable financing process.

A supply chain financial service platform built on the underlying technology of the BCOS platform

Supply chain finance business is very suitable for the use of blockchain and distributed ledger technology. First, the business involves multiple entities, including core enterprises, suppliers, financial institutions, investors, etc., and transaction information is transmitted between multiple entities through blockchain; second, transaction information on the supply chain is usually commercially sensitive information, and blockchain technology can achieve data encryption; finally, through the data immutability and traceability of blockchain technology, the common false trade phenomenon in supply chain financing can be effectively eliminated.

At the same time, Sun Lilin revealed to reporters that Matrix Yuanzheng is working with a regional equity trading center to create a new generation of equity registration and service platform serving small and medium-sized enterprises based on the BCOS platform. Starting from the corporate equity registration business, it will reconstruct the corporate credit foundation through emerging technologies, guide public service agencies and commercial institutions to participate together, and form a new ecological system that facilitates transactions and financing for small and medium-sized enterprises.

Security and maintainability upgrade trust

In the security link, the research of cryptography, zero-knowledge proof, homomorphic encryption and other algorithms plays a very important role. Many local trust points or trust bodies require a large amount of support from cryptography, homomorphic encryption and other algorithms. In the blockchain ecosystem, the research of cryptography and encryption algorithms has become one of the cornerstones of blockchain's technical trust.

In some business scenarios with strong regulation or high security requirements, BCOS can introduce official or authoritative central counterparties to provide credit endorsements. The transaction data details of the transaction participants are all visible to the central counterparty, but invisible to irrelevant participants. The central counterparty is responsible for verifying the transaction and providing credible evidence for the entire alliance chain. In this business scenario, through physical isolation and logical channel design at the communication layer, transaction details are only sent to the nodes involved in the transaction and the central counterparty, preventing the spread of private data from a basic level.

There are two very important issues in blockchain security: security and maintainability. BCOS certainly has flaws, and security is never the end, so through the open source of BCOS, we can let everyone test it together and gradually improve it together.

In terms of maintainability, BCOS is a system that emphasizes security and commercial-grade operation and maintenance. It has high consistency in construction and operation logic, and the software and hardware systems of different nodes are basically consistent. The standardized characteristics bring great convenience to operation and maintenance personnel, who use common tools, operation and maintenance strategies, and operation and maintenance fluency to build, deploy, configure, and troubleshoot blockchain systems, thereby reducing operation and maintenance costs and improving efficiency.

As for the three technical directions of blockchain applications - storage, cryptographic privacy protection, and consensus mechanism, it should not be controlled by a single enterprise, but should be open. Through open standards, the whole society can participate, benefit together, share success, improve the entire ecosystem, and promote the implementation of various distributed commercial application scenarios. This is the ultimate route for blockchain technology in the future.