What Is Blockchain And Why Is WeChat And UnionPay Useing It ?

Posted 2021-04-29 GuideinChina

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Chinese tech giant Tencent, which owns WeChat business, announced a blockchain research partnership with multinational tech corporation Intel at a conference earlier this month. 

Meanwhile, documents released in late September by the State Intellectual Property Office of the People's Republic of China, China UnionPay, the payment card giant, is going to patent a system for connecting a network using blockchain technology. 

It details a concept by which a group of ATMs acts as nodes within a blockchain-powered network, sharing transactions through a distributed database in a bid to achieve a higher degree of security and uptime. 

1

What Is Blockchain?

A blockchain can serve as an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.

Blockchains are secure by design, the decentralized consensus has been achieved with a blockchain. This makes blockchains potentially suitable the recording events, such as:

• Medical Records

• Identity Management

• Transaction Processing

• Documenting Provenance

• Food Traceability

2

How Does Blockchain Affect Our Life?

WeChat Pay and UnionPay serve as the third party platform recognized and authorized by Central Bank of China, providing service for financial data storage, trace, verification. 

Picture above shows the process of the transaction without blockchain

It's not deal to collect large amount of data just by its authority. Electronic records can be revised, deleted or lost.

Picture above shows the process of the transaction with blockchain.

The transaction is initially confirmed when storing into the Orphan block. Once it connects and is confirmed by 6 blocks in the main chain, the transaction becomes irreversible. By using blockchain technology, financial data, transaction becomes transparent and undeniable. 

This is one of the advantages of the decentralized consensus, you don't need a third party platform to serve as an authoritative guarantee. For example, if you have a purchase via WeChat Pay, the transaction fails if the system breaks down, WeChat may deny this transaction. As we mentioned, the transaction is confirmed and irreversible in the blockchain, every connected block has recorded your transaction, making to a more secure network.

3

Digital Currency or Cash, Which Will Vanish?

The first distributed blockchain was conceptualized by Satoshi Nakamoto, and serves as a core component of the digital currency –bitcoin – where it serves as the public ledger for all transactions.

After the crackdown on bitcoin, OKcoin and initial coin offerings (ICOs) exchanges in September, China's government still appears committed to the potential of blockchain in other areas. A variety of high-level consortia have been formed by government and business institutions to develop and implement DLT. China's own IT Ministry is backing a new blockchain lab, announced just days after the crackdown on bitcoin trading.

The People's Bank of China appears to be closer to issuing a digital fiat currency than pretty much any other central bank on the planet. It has launched its own digital currency research institute in June 2017.

China has made a big achievements with digital currency and blockchain in 2017. Will the cash be replaced by digital currency in 2018? Is it an opportunity or a threat to us in the future?

Source: HiTouch

Reference: Coindesk, Wikipedia

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