Time back to the end of 2017, when I talked to a CEO of an Internet company in China on topic of blockchain, we generated a bit of disagreement. Although there are different opinions, the spark of the collision inspired me think deeper. In this wave of technology innovation, what is the major impact difference between blockchain and other technologies, such as big data, cloud computing, and artificial intelligence. What is the value to the enterprises from these technologies? In my opinion, the blockchain is not just a technological innovation, but more importantly, a new mode of mindset.
In the past 10 years, our well-known advanced technology representatives are big data, cloud computing, and artificial intelligence. These technological innovations have set off a wave of entrepreneurial waves, attracting countless investments and encouraging the digital transformation of traditional industries. In the case of Alibaba, it announced the “BASIC” strategy in 2017, B stands for Blockchain, A is for artificial intelligence(AI), S is security, I is Internet of things(IoT), and C stands for cloud computing. If you add the term that created by Jack Ma earlier — data technology (DT), it should be said that the most mainstream technologies at the moment is all covered by Alibaba.
This article shares a view on my understanding of the value of these technologies.
Big data is corporate asset, which is widely accepted. From operation perspective, more importantly, it is also a cost. Data collecting, cleaning-up, storage, and data analysis are all required investment in resources. If it does not utilized properly and generate enterprise value, then it will be considered as the operating cost. Although enterprises know that we are in this big data era, the value of data to enterprises is huge, but how to monetize data resources to generate profits is still a problem for many.
Cloud computing is a service, a kind of light asset investment for enterprises. The emergence of the cloud has made it possible for companies to implement pay-as-you-go Internet services. Prior to this, Internet product development were a heavy-asset investment. Think about 10 years ago, operating an Internet product requires tech or IT managers to survey on server hosting suppliers and their physical location. Startups had to install and debug the server software. In Chinese, we say ‘Soldiers and horses have not moved, but the grain and grass go first’, which means it is really that the project will not initiated before money set. Running an Internet business is money fighting(of course, more refers to the need for operations), and how many projects with potential have been backed off because of lack funding to just kick off. Cloud services are so convenient, it provides opportunities for start-ups and a less expensive switching model for traditional enterprises in transition.
Artificial intelligence research work made it possible to apply AI to the product level after the breakthrough in technology around 2010. Later, AI attracted a lot of eyeballs with Deepmind‘s AlphaGo and Lee Sedol‘s impressive five-set go game, which strongly promoted the concept of artificial intelligence. After that, artificial intelligence companies have sprung up. If big data is enterprise assets and cloud computing is mainly for enterprise services, then artificial intelligence has a broader consumer market apart from business customers. For a time, all kinds of intelligent hardware devices claimed to integrate artificial intelligence technology, and they consumed the IQ tax of non-technicals. Artificial intelligence is a technological revolution. Although it has experienced several waves, it has not been able to truly turned into commercial value because of its poor usability. Its improvement on products or services is mainly performance, which depends on big data resources, and only enough data for self-learning process can be gradually optimized to achieve a superior user experience. This article focuses on the blockchain, so I don’t go further on artificial intelligence, but the core of it is that I think it is a technological revolution in productivity, not a way of thinking.
Finally, I will talk about the blockchain. Because of the 5-year stable operation of Bitcoin — a project running without any centralized authorities, the blockchain technology that was underhood popped up and attracted attention. In the first few years, blockchain, the technology part is the community’s most concerned topic. Therefore, talking about the blockchain is all technical(if not cryptocurrency). Before 2017, I always looked at the blockchain from a technical level and provided technical training/consulting services — such as cryptographic encryption techniques, hash algorithms, digital signatures, consensus protocol algorithms, data storage structures, smart contracts, channel technologies, security features, and more. However, with the deep understanding of the blockchain, I pay more and more attention to the mindset behind the blockchain. This kind of thinking is reflected in the level of governance and operational mechanisms.
As an emerging technology and idea, blockchain has yet to be further understood and explored. Take Alibaba as an example. Big data is its important asset. Artificial intelligence is a tool to improve its operational efficiency. Cloud computing services provide value to enterprise customers while bringing direct economic income to enterprises. Then, what about blockchain? Yes, the blockchain has no good profit model except for the cryptocurrency exchange and ICO(which are all banned in China). It can’t directly create profits for the company, because its original intention is not for a centralized enterprise. So, after the exploration, the tech giants have adopted a similar BaaS strategy, which is to create value through technology services. As you may know, in addition to a mass entrepreneur in the Dapps field, another major push on blockchain development is the technology giants. IBM, Microsoft, Amazon, and BATJ(Baidu, Alibaba, Tencent, JD), all of them take the so-called BaaS(Blockchain as a Service) approach, while passes the task of exploring the value of blockchain to their customers.
Blockchain is decentralized and operates under a mechanism without a central power entity. This mechanism is revolutionary in thought. A blockchain system achieves security and stability through information sharing of the participants in the system and multi-party consensus, without relying on any trusted central organization. It is expected to push the traditional centralized management model to fade out and be replaced by consensus governance, which is subversive. Under this guidance, a new combination of mature technologies created blockchain technology, but the problem of decentralized decision-making cannot be solved only by computer technology. Therefore, it is innovatively combined with economic incentives to improve implementation. This way of interdisciplinary research work on solving problems in computer science is also subversive.
The blockchain is not essentially serve for a single entity. Ideally, it’s served for an ecosystem. For companies, co-opetition will be more important in the blockchain era. The “chain” reminds me of the value chain theory of the strategist Michael Porter. The blockchain is a win-win embodiment of many enterprise value chains. Only the horizontal and vertical enterprises cooperated in the system, with fairly equal accountability and mutual benefits can lead to a valuable blockchain ecosystem. The network enhances the operational efficiency of the entire ecosystem which in turn benefits each participate members, respectively. It is hard to imagine that the original Didi Group and Kuaidi(both were compete in taxi-hailing market in China), Dianping and Meituan(compete in consumer review and group buying), 58 and Ganji can establish a win-win cooperation. Ideologically, companies hope to maximize their profits and return investor expectations by eliminating competitors, monopolizing the market and consumers. This kind of business mindset is difficult to change at once. Even if the blockchain technology is adopted in the product level(which is on the surface), it is facing great challenges to be thoroughly taken in operation mode(which is deep in mind).
Blockchain is a combination of computer technology and economic theory. It involves the integration of computer networks, cryptography, game theory, economics, etc.. According to the interpretation of disruptive innovation from the book ‘The Innovator’s Dilemma’ by Christensen, blockchain is a disruptive innovation in the true sense.