New Forefront, Internet Finance Revitalized with Blockchain Transformation
Since the People’s Daily published on October 26, “Blockchain as an important breakthrough for independent innovation of core technologies,” the increasing companies have begun to focus on using blockchain technology to promote product iteration and industrial upgrading.
As a new generation of technology, blockchain has many irreplaceable powerful functions, such as distributed data storage, point-to-point data transmission, etc.. Because of its immutable underlying logic, it also gives the blockchain plenty of room for development in many application scenarios such as traceability, certificate-saving, and trust mechanisms etc.
According to a report released by Spain’s largest bank Santander, if banks around the world use blockchain technology around 2020, it will save about 20 billion US dollars in costs each year. Internet finance can also rely on blockchain technology, leaving huge operating and research and development costs.
The Hashgard Blockchain team has built a complete set of blockchain systems based on blockchain technology, including a new generation of digital financial public chain, smart contract graphical deployment system, token candy airdrop system, and equity incentive token system, blockchain wallet GARDBOX and many other products.
Actively responding to the national call, the Hashgard blockchain team is committed to achieve the landing of the blockchain, providing a one-stop solution of “blockchain +” for Internet financial companies.
In this article, we will introduce in detail how the Hashgard blockchain provides a one-stop solution of “block chain + Internet finance”:
01 Problems Existing in the Internet Finance Industry
At this stage, the domestic Internet finance industry is facing multiple issues. In this article, we have selected four problems that are common and difficult to solve in the current industry:
a. Business scale and asset quality decline
Due to the great effect on the scale of Internet financial business caused by the pressure of the economic environment, the bad debt rate has risen, causing the entire industry to face significant pressure.
b. Tighter supervision and stronger risk prevention awareness in general
From 2017 to 2019, the intensive introduction of standardized policies in the field of Internet finance segmentation has led to the reduction of business scale and the increase of business pressure for Internet finance companies.
c. Lack of trust and rapid loss of users
With the recurrence of problems in the Internet financial industry in 2018, users have lost their irresistible trust in the industry, so the losing of large number of users and reducing traffic has become an industry problem.
d. The crowded track , and the seriously insufficient active users
With the rapid development of the industry after 2015, giants have gathered in all segment fields of Internet finance. The overlapped businesses between the giants with the expansion of business scale result in the increasing pressure of business competition and fiercer battle of traffic and high-quality assets.
(The above content is from iResearch: China Internet Finance Industry Monitoring Report 2019)
02 What problems can the blockchain solve for the financial industry
First of all, blockchain is not a panacea. It cannot solve all the problems of the Internet finance industry. It only provides a series of support for the Internet industry from a technical level and provides new ideas in business logic.
For the current problems of the Internet finance industry, we have summarized them into: poor environment, strict management, people who lose trust, tough opponents. Among these problems, the blockchain cannot solve the first two problems, but it may help and promote the latter two problems.
a. Blockchain can solve the problem of lack of trust
The mutual distrust between users and Internet financial platforms is an industry-recognized fact: users worry that the platform may disappear, or the project may take shoddy goods for quality goods, which will eventually lead to a break in the capital chain and damage to user interests. The platform is worried that a large number of econnoisseur and bad creditors will gain profits through illegal means.
Under the influence of bad currency expelling the good currency effect, some non-compliant platforms have also affected the reputation of the compliant platforms, and some good credit users have also been affected by the benefits brought by bad creditors.
So, how does the blockchain solve it?
We can use blockchain and strong encryption to create an authentication infrastructure that can control complete credit records, asset transfer status and transaction records, digital files containing basic personal information, such as credit status, the entire process of funds from initial, investment, dividends to return to the users, the user’s real income, etc .; second, use the private key to encrypt and sign the certificate; then create a hash value to verify whether the content of the certificate has been tampered with;
Finally, a private key is used again to create a record on the blockchain network to prove what the certificate has reached at some time.
Let’s take a simple example:
The user A is considering investing on the blockchain network, and platform B has a full record of the funds of a certain target in the past, from the scale of the fund, the flow of funds, the dividends of the investment, and the specific information of the investment target, all of which are open and transparent to user A, so it is easy for A to judge the quality of the investment target, and then decide whether to invest or not. The past phenomenon of “the platform providing the information without transparency” is gone.
For Internet companies, let’s see another example:
Platform B received a loan request from user A. Based on the information on the chain, such as his past use of funds, credit history, income and expenditure status, and where the funds are going, platform B can immediately determine whether A has a good credit, improving the efficiency and quality of risk control, and blocking “econnoisseur” and “bad users” .
This set of processes look so complicated, so wouldn’t it be troublesome?
Of course not. In practical applications, the above work can be completed with one-click operation, which is simple and efficient.
Therefore, the blockchain can help solve the problem of lack of trust between users and the platform through certificate storage and on-chain data.
b. Blockchain can solve the problem of insufficient user activity
Due to the rapid development of the industry, more and more players appear in various segments, user diversion is serious, and the stickiness and activity of users have dropped significantly.
The decline in user activity means that for Internet finance companies, there are fewer purchasers of investment targets, and the corresponding targets will naturally decrease, and the vitality of the platform will continue to decline, eventually forming a vicious circle.
So, what can a blockchain do?
We can make a blockchain token system that improves user stickiness!
The platform can create its own token system through the Hashgard public chain and give corresponding token rewards based on the user’s behavior. The token will be valued according to the platform itself. For example, in platform B, users will explore investment targets, introduce the investment target to enter the platform, participate in investment and other activities, and confirm the hash value to obtain a quantitative token. The entire token system will be built on a decentralized public chain, which is visible across the entire network.
To put it simply, it is to integrate the point system of the previous platform on the blockchain to implement tokenization construction. So what’s the difference between tokens and points?
The credit itself is a set of virtual products issued by the platform. There is no value to rely on, and the platform can be issued indefinitely. It cannot form a self-owned currency system. The platform decides the value of the credit that can be modified willfully. The users hardly have the chance to express their opinions.
The token has its own economic model. Modifying the token system requires the votes of the token holders to pass. The value of the token is not constant, but it is constantly improved as the platform grows and the consensus of the community is established.
For users, different operation behaviors can bring different levels of Tokens, and corresponding profits can be obtained. For the platform, the user’s activity has increased, and the value of the token has increased, which has also brought the value and income increase to the enterprise correspondingly.
In addition to the above two general directions, blockchain can actually do a lot for the Internet finance industry.
Below, we talk about some application scenarios of blockchain + Internet finance
Blockchain + Internet financial information security: Information leakage is a significant pain point of current Internet finance. Blockchain technology is used to strengthen information security protection. User information protected based on asymmetric encryption algorithms is more secure and reliable.
At the same time, in view of the open and transparent nature of the blockchain, any resource creation information can be queried, tracked, and obtained by users. Once information is leaked or stolen, past query records can be found by tracing the source, thereby helping to get to the source. It solves the problem of information leakage, which not only protects user information and risk control rules, but also improves the credibility of the platform.
Blockchain + Financing: By using blockchain technology to bring enterprise information to the chain, including the verification and confirmation of the true validity of creditor’s rights certificates, the non-tamperable characteristics of blockchains ensure that creditor’s rights certificates cannot be faked, and achieve core credit penetration, in order to solve the problem of corporate financing difficulties.
Blockchain + Borrowing: Borrowing can be said to be one of the most suitable financial services for blockchain. Through the disclosure of on-chain data and information, the funder can judge the condition of the borrower to the greatest extent, improving the risk control efficiency, and no longer need to constantly adjust the risk control rules to fight against dishonest people and the econnoisseur.
In addition, if the borrower fails to repay on time after borrowing, he will face the entire network broadcast on the blockchain network and directly affect credit information and personal information on the chain. A single dishonesty may result in never being able to borrow in the future, and the cost of dishonesty is extremely high, leading to a significant decline in the bad debt ratio of borrowing.
Blockchain + bills: As an important part of the current Internet financial landscape, electronic bills and blockchain technology are also a good combination. The core of this application lies in the issue of counterfeit bills and other issues.
The block chain completely reflects the process from the generation to the expiration of the bill through the time stamp. It has the characteristics of traceability history, so that the entire bill has a new continuous endorsement mechanism, which truly reflects the transfer process of bill rights, and solve the problem of counterfeit bills in the process.
03 Hashgard Blockchain + Financial Solution
The above mentioned a lot of applications and scenarios of blockchain in the Internet financial industry. I believe you must have a consensus with me now: the financial industry needs blockchain.
So, how can the Hashgard blockchain fulfill these requirements and achieve landing in different scenarios?
We will mainly implement it from two parts: R & D and token economy:
R & D areas:
The Hashgard Blockchain team independently developed a complete set of blockchain technology systems, including a new generation of digital financial public chain, smart contract graphical deployment system, token candy airdrop system, equity incentive token system, blockchain wallet GARDBOX, etc. These functions and technologies can be used in the application of blockchain + finance.
a. Hashgard public chain can realize distributed storage
1) Distributed ledger technology shares, replicates, and synchronizes databases among network members (nodes), and any network participant can obtain a unique, true copy of the record.
2) All data changes in the ledger will be reflected in other copies. In the Hashgard blockchain, it only takes about 3–6 seconds.
3) The assets stored in the ledger can be logical or electronic assets, and the ledger records can be managed and updated by one or more participants.
b. The POS consensus mechanism of the Hashgard public chain is more efficient
1) At the beginning of each block, Tendermint pseudo-randomly arranges a validator to propose the block. After the proposal, it needs to be formally submitted as a block after 2/3 of the validators’ pre-voting and pre-signing signature. If the submission fails, the protocol will reschedule a new validator proposal block.
2) Tendermint can tolerate failures below 1/3, including failures or malicious users
3) However, the block generated by Tendermint is finalized and the network will not be forked
c. Hashgard public chain achieves data on-chain:
1) The financial platform built on the Hashgard public chain can be stored according to the data file type and data size
2) Data related to business document status, issuance, and important document deposit certificate are directly encrypted and uploaded on the application side and signed
3) The data that does not involve the storage of important data and has a large storage space will store the original in the local server, and at the same time, encrypt the result of the file and the storage address and upload it to the chain.
d. Smart contract of Hashgard public chain
The virtual machine Hashgard VM independently developed by the Hashgard blockchain team supports a number of exclusive smart contract functions, which can effectively support the development of more complex financial services
At present, HVM virtual machines have a series of functions including protocol instruction set, random numbers on the chain, smart contracts able to be updated and upgraded, and smart contracts able to be automatically executed at regular intervals, which can be applied to financial services in different scenarios.
Token Economy System:
Hashgard blockchain can build a complete set of token economic systems for the financial industry and directly issue tokens for enterprises.
In the future, the Hashgard token economy will realize the combination of blockchain + finance from three directions:
1. Use tokens to encourage content producers:
Through smart contracts, each user opens their own wallet account, and uses the network’s exclusive token for financial content production operations, including publishing investment targets, evaluating investments, and analyzing trends, etc., and the network will conduct the token incentives for them, the corresponding proceeds will be immediately distributed to the user’s account.
This mainly solves the problem of user enthusiasm on the financial platform. On the one hand, the chain of the financial system is shortened, and on the other hand, users can be motivated to produce higher-quality knowledge content.
2. Use tokens to motivate excellent communicators
For each account, after attracting more users to join the platform through excellent communication, the blockchain network will give incentives which will be credited immediately.
Through the form of incentives, it will promote users to spread excellent content and promote the platform.
In the entire incentive process, the incentive ratio will change over time. The ratio will be discussed and modified through the regular voting mechanism in the community. Once it is determined, it will be automatically executed within a specific period. Finally, the non-decreasing returns sharing will be realized through smart contracts.
3. Use tokens to stimulate ecological users
Based on the smart contract method, the token rewards certain user behaviors in the system, such as investments, transfers, transactions, and loans, to further stimulate user activity in the system.
04 Why choose Hashgard Blockchain
At present, the Hashgard blockchain can provide services including blockchain main chain development, blockchain virtual machine development, blockchain smart contract development, and token application system development.
Hashgard public chain:
Smart contract deployment system:
Equity token incentive system:
Stronger Research & Development capabilities
More technical innovation and better application experience
Hashgard Blockchain looks forward to working with you!
Hashgard is a new generation of digital financial public chain invested first by Fenbushi Capital and BKFUND, followed by 80 well-known investment institutions. The public chain developed based on the Cosmos-SDK, the independently developed high-performance virtual machines to support multiple programming languages, and the implementation of cross-chain interaction through the IBC protocol, ultimately creates an open and highly scalable ecosystem. The public chain will promote the healthy development of the digital financial industry through technological innovation and ecological construction.