The Relationship between Operators and Block Chains

In the last week, the Bitcoin & Block Chain has become the focus of global news, and China has announced that it has shut down all the virtual currency assets exchanges, resulting in volatility of virtual currency prices. Although the block-chain assets market has evaporated more than $ 60 billion last week, it has increased several times compared to the beginning of this year. In fact, most people do not understand what is block chain, they only still staring at the price of Bitcoin soaring. The essence of the block chain is through the decentralized distributed network to achieve value transmission, it may be another major human technological revolution.

Previously I heard that Chinese operators consulted equipments suppliers what is the relationship between Operators and Block Chains, but got no answers. After a period of learning and thinking, I feel that the block chain may be an opportunity for operators. Let's take a look at the development of the communication industry these years. In the 1860s, mankind first operate telegraph service from Europe to the USA through the submarine cable . At that time the telegraph service between the Atlantic was very expensive, at least 10 words per telegraph and $ 10 per word. Since $ 10 was a reward for a skilled worker for a week, most people were unable to pay for it, and only big companies and wealthy people could afford the Atlantic telegraph. By 1870, Wall Street spent $ 1 million in telegraphic fees every year because they must know London's prices before than others, it could distinguish between getting rich and bankrupt. In 1876 Bell invented the first telephone in human history, 1920 radio broadcasting appeared. In 1936 the British Broadcasting Corporation set up the first television station. More than 100 years after Bell invented the phone, it cost $ 400 initial fee to install a telephone in Shanghai China, it need more in other mainland cities, and people have to line up to wait. The Internet appeared in the 1980s, the first time I accessed the Internet through a 56k dial-up modem in 1998, it cost me $ 20 every month. But now Telecom broadband has reached the speed of 100M, the price dropped to only $ 15. Looking back on the history of the communication industry, in fact, operators have been doing only one thing - information transmission. 1860 telegram was so expensive, why? Because the information was too valuable to pass, it can decide whether you make a fortune or bankruptcy. The reason why the phone was so expensive in 1980 is also that the information was more valuable. You can call your loved ones to know their information since you didn't meet them for serval months of years, it can reduce your fear and anxiety to your loved ones. The radio broadcasting and television through the central way to pass important information, it is also very expensive at the beginning, and then gradually reduced. The Internet makes the decentralized transmission of information more easy. With the development of technology, the bandwidth is more and more wide than before, more and more information will be transmitted through operators' networks, the value of information is getting lower and lower, resulting in each unit's price is getting lower and lower. Operators found that the revenue is more and more difficult to grow. In order to solve this problem, operators and equipment suppliers are taking actions. The first strategy is to enlarge the big pipeline, promote 4k, promote AR&VR. The second strategy is big data mining , operators hope to find treasure from the information passed their networks. The third strategy is to classify the information passed their network, give high QoS guarantee to high value information. But from the current situation, these measures seem to have no effective to help revenue to grow. The first strategy can improve the experience of users, but the value of information does not significantly increase, it only can maintain the revenue does not decline. The second strategy will face the fierce competition of vertical integration OTT company, operators basically get less than cheap. The third strategy is only to solve the problem of lack of resources when busy, it will be helpless to increase revenue. It seems a dead route to increase revenue through information transmission.

Block chain technology is accompanied by bitcoins, at first no one concerned about the the game of geek. Complex key technology, obscure mining concept, the incomprehensible POW mechanism, so that the general public participation is very low. Until the bitcoin price break 100 dollars, the block chain technology behind the bitcoin began to enter the public view. Before the emergence of the block chain, in order to solve the trust of the value of transmission, we must use a central organization to endorsement, such as banks or Alipay, the value can not be transmitted point-to-point. The block chain is a big ledger which use a decentralized distributed network and encryption algorithm, thus achieving the value transfer between point-to-point. Through continuous promotion from geeks, more and more people began to realize the value of the block chain, and understand that the traditional telecommunications network and the Internet can only solve the information transmission, and the block chain can solve the value transmission in the first, this is an epoch-making breakthrough, so a lot of people call the block chain as the next generation Internet.

As the value transmission network, the usually business model is charging based on the percentage of the transaction. I search from internet and found that the global commercial banks in 2012 handled 377 trillion dollars in non-cash trading business and received $ 301 billion in transaction revenue. If the global operator's network can not only transfer information, but also transfer value through using blockchain technology, it maybe can bring hundreds of billions of dollars in revenue growth. The operator network is only busy a few hours, if the idle network computing power is used to account, operators do not need more CAPEX investment except electricity cost.
At the beginning only personal or small company will invest mining pool to account, it meet the need of decentralized distributed network. But with the development and growth, blockchain asset prices go high, the computing power will be more and more concentrated to the large mining pool. At present, the computing power of China's major mining pools is more than 50% of the world, people began to worry that the blockchain network is centralized. From all the operators around the world, their network is also a decentralized distributed network, and many operators are private companies which are not controlled by government. At present, Sprint, Japan Telecom giant Softbank (SoftBank), one of Taiwan's largest telecoms FarEasTone has set up a new blockchain alliance, hoping to use blockchain technology to solve some problems. If all the operators around the world contribute their computing powder to account, and the entire network is still a decentralized distributed network, and operators can get more revenue and profit, why not?