Why is Alibaba delving into blockchain technology?

In October 2017, the Alibaba DAMO Academy(Academy for discovery, adventure, momentum and outlook) was established. It is dedicated to exploring the unknown in science and technology and driving research into basic science and innovative technology with a human vision as its motivating force. The DAMO Academy has set up seven research centers around the world to recruit the world's scientific elite, covering cutting-edge sciences such as artificial intelligence, semiconductors, chips and cloud computing.

On January 2, Alibaba DAMO Academy announced its top 10 trends for 2020, which is the second time that it has predicted annual tech trends after 2019. As predicted in the article, a number of technology areas, including AI, chips, cloud computing, blockchain, and quantum computing, will have a disruptive breakthrough in 2020. AI chips and embedded CPUs have been groundbreakingly developed around the AI landscape. Through joint collaboration with industry chain partners, safe, smart, and inclusive solutions are provided in many fields such as data centers, city brains, vehicle-road collaboration, and smart homes.

Comparing the predictions in 2019, trends such as blockchain commercialization speeding up, AI chips rising, smart cities being born, 5G giving rise to new application scenarios... these predictions have already come true.

Taking blockchain as an example, last year, the DAMO Academy proposed that the commercial application of blockchain will accelerate, and this assertion has been verified in reality. In 2019, blockchain technology rises to a national strategy and gradually settles down in digital finance, digital government, smart manufacturing and other fields. Internet giants are also getting into the market to explore the true value of blockchain.

DAMO Academy is able to make such accurate predictions precisely because Alibaba's Ant Financial Group has a battle-hardened blockchain team. And with their help, Ant Financial blockchain has successfully landed in nearly 50 scenarios in 2019, moreover, it was fully applied in areas such as commodity traceability, originality protection, digital identity authentication and supply chain finance during Tmall Double 11 in 2019.

The DAMO Academy believes that the threshold for enterprises to apply blockchain technology will be further reduced, designed specifically for the blockchain end, cloud, chain of various types of hardware chips that can cure the core algorithm will also emerge. And the blockchain application will be accessible to the daily life by 2020.

A team is formed to study the blockchain

Behind the judgment of the blockchain field is Alibaba's 4-year-long low-key exploration at no cost, and then take the way of Alibaba Cloud.

In 2015, after a bear market in 2014, Bitcoin started to jump at $300, spawning another wave of "credit speculation." Unlike the fervor of the currency circle, the blockchain technology was still not well known at that time. Then, Ant Financial set up an internal blockchain group to mainly study the technology, "At that time, it was not clear how valuable this thing was." It was in 2016 that the real commercial space was clearly recognized.

Like all in-house innovation squads, the Ant Financial blockchain team's "coders" are keen to engage in a hackathon. During a 48-hour non-stop activity, the team implemented a POC (proof of concept) for a blockchain charity donation tracking application. With the blockchain logo on the Alipay app's donation platform, this charity donation tracking app immediately became the highest-traffic project on the entire platform. It actually raised $198,000 for 10 hearing-impaired children, and nearly 50,000 people participated in the donation drive.

The success of this donation campaign led to the decision by Ant Financial to set up a special team for researching the blockchain.

At that time, Jiang Guofei, who had served as the director of the NEC Institute of American Studies, came to Ant Financial Group as vice president and director of the financial technology lab at Alibaba's DAMO Academy. And one of his main tasks was to lead the team to research blockchain technology and bring in blockchain talent.

According to Jiang Guofei, blockchain technology research has involved mathematics and other very basic disciplines. This kind of investment is not something that anyone is willing to keep pushing. Besides, the so-called burning-money model is essentially a determination to invest.

As with other previous technology investments, Alibaba has invested recklessly in resources and manpower to bring Ant Financial blockchain technology to an industry height. And under the dual role of capital and effort, Ant Financial blockchain has achieved a good deal of success.

According to the data released at the September 2019 Computing Conference, Ant Financial's independently developed financial-grade blockchain engine has been able to support 1 billion account size and 1 billion transactions per day, while the new blockchain storage cost has been reduced by 50% compared with Ethereum. What's more, the elastic expansion can achieve a cross-chain information processing capacity of more than 100,000 per second.

The blockchain of Alibaba takes root

When the DAMO Academy was founded, Alibaba founder Jack Ma proposed three basic requirements: "Live longer than Alibaba", "Serve at least 2 billion people around the world", and "must look to the future and use technology to solve the problems of the future". It means that research teams must not only focus on the long-term value, but also pay attention to the short-term development.

The predecessor of Ant Financial, Alipay, was originally a secured transaction function within the Taobao system. The purpose of the birth was to solve the most difficult part of online shopping - the problem of trust. As a "value Internet", blockchain technology has become another weapon to solve the trust problems existing in all walks of life by virtue of its inability to tamper and facilitate query.

In solving the trust problem, the Ant Financial blockchain team found application scenarios that are closely related to people's lives, such as cross-border remittances, commodity traceability, mutual insurance, charity, public welfare, and house leasing.

In Hong Kong, Ant Financial's Hong Kong team teamed up with Standard Chartered Bank to use blockchain technology to enable users with cross-border transfer needs to complete cross-border remittances in seconds, as opposed to similar transactions through the traditional banking system, which not only require long queues but also transfer periods of up to 10 days.

Using blockchain technology to enable real-time global remittances ultimately comes back to Alibaba's vision, that is, there's no such thing as a difficult business in the world. The "trust" system established during the Alipay period has been extended from the e-commerce network to the wider real world. For example, if you buy overseas milk powder products on Tmall now, you can clearly see the traceability of the milk powder from production, quality inspection to the logistics through the traceability code. According to statistics, in last year's Tmall Double 11, 150 million overseas goods achieved traceability of origin.

In the field of judicial certainty as well as rights protection, the Ant Financial blockchain team has created a unified blockchain platform for the Supreme Court to build people's court justice. It is reported that 21 courts and 27 links of nodes have been completed, and a total of more than 20,000 nodes have been built in conjunction with four levels of courts. 180 million pieces of data have been uploaded and stored in the system to support on-chain forensic verification. The whole process of uploading the chain to achieve trace supervision, which greatly reduces the cost of judicial rights to a large extent.

At the beginning of the year, the US social giant Facebook's Libra had caused panic among global financial institutions. From the current development of the project, its goal of becoming a new underlying infrastructure to subvert traditional finance has been difficult to achieve. In contrast, the Ant Financial blockchain team, with its solid technical strength, patiently looked for landing scenes step by step, and pushed the blockchain technology into the real world of all walks of life.

"Whether it is financial and commercial credit between individuals and businesses, or a new type of trust between individuals, society and institutions, blockchain is set to reshape existing productivity, means of production and production relationships, creating the ultimate synergistic digital economy of the future." Jiang Guofei described the value Internet brought by blockchain technology and the new "contract era." The Ant Financial blockchain team is also using landing scenarios and application areas to reflect its value, which embodies Alibaba's efforts and determination to build such a new era.

This is an article from WeChat official accounts GeekPark (ID: geekpark), translated by Chris Yuan.