Deciphering DCC — Cipher Tang’s Interview with Mars BlockchainConsidering the technology available at the moment, including the capacity of blockchain and the application of smart contracts, blockchain can be a great fit for credit loan services — this is why the DCC team decided to build an inclusive infrastructure to make finance and tokens more accessible, to activate the whole ecosystem.
— Cipher Tang, CTO of DCC
The Interview
Q: DCC is building a public chain which will ultimately become an ecosystem for banking services. Currently, DCC is positioned as the infrastructure for credit and lending. Could you share with me the rationale behind this positioning?A: We’ve been serving companies in the financial industry for a long time. We used to develop payment and settlement solutions, design accounts, construct basic services for P2P lending platforms, and work in consumer finance. Basically all of our projects fell within the scope of ecosystem development. We came to realize that most problems were caused by the ownership of data, which was usually controlled by big financial institutions. This monopoly has been shaping the financial industry, creating a subtle “confrontation” between customers and businesses.
In addition to data monopoly and informational barriers, P2P lending also has its own problems, such as the lack of data transparency, which can lead to fraud. Based on our experience and observations, we believe that the cause lies in the bottom of the whole industry, which is the system for credit record maintenance.
Since the beginning of last year, we’ve been thinking about applying the logic of bitcoin in credit. Bitcoin enables users to control the ownership of currencies. What if something similar happens in the world of credit? If individual customers can control, transfer and verify their own credit data, then the whole credit system will evolve — customers will have more power, while the power of businesses will be limited. The result will be a more thorough reformation in financial services, changing many things like the structure of costs. We want to see this reformation happen, so we started our own project with a focus on credit and lending.
Considering the technology available at the moment, including the capacity of blockchain and the application of smart contracts, blockchain can be a great fit for credit loan services. If we work to serve decentralized mass payments, judging from my own experience, there’s hardly any existing blockchain system that can meet all the requirements. Therefore we’re not in a rush to dive into payment and settlement. At the moment, we are focusing on credit and lending.
Q: The establishment of a credit system can take a long time, as it requires a mass amount of data from many dimensions. How would you tackle this challenge?A: Let me begin by explaining our logic. There are two types of data providers — those who provide credit data, and those who provide scenario data, such as travel data. Some of these providers process a lot of data for users, but not all of them are fully licensed or regulated.
What we want to do is help users maintain and share their own credit data, based on the DCC framework, which allows individual customers to interact directly with data providers. This framework also facilitates the standardization of data. Users enter their data using a template, and then maintain their information with data service providers. In other words, users provide the initial content for their own credit profiles.
This model provides multiple benefits. First of all, as the users directly confirm their information in the authorization process, there’s no need for any indirect confirmation process. Second, since the data is maintained by both sides, we can match the information with relevant people or parties, which makes the data more reliable. Third, users can delete their own credit data whenever needed, because they now control the use of their own profiles. Additionally, our framework only stores encrypted summaries of people’s credit record, so it does a good job protecting user privacy.
The construction of the DCC framework is a continuous process. We’d like to incorporate more types of data into the DCC ecosystem, instead of only including credit data. The more diverse our data sources are, the more effective and practical our ecosystem will become.
Q: If you are storing a user’s credit history on the blockchain, do you need the authorization from the user and the producer of such data?A: Yes, but this authorization doesn’t have to be permanent. If users have the right to use their data, whose validity has been confirmed, then no institutions can limit the verification and transactions of such data in the future. Even if the initial data provider has run out of business or quit the chain, the record is still theoretically valid, which contains the owner’s identity as well as the parties who have previously verified the information.
We have started to connect databases of our Vietnamese users’ personal information, such as their ID, passport and driver’s license. Our team in China has already finished the incorporation of various data points, including a social security payment record, education record and anti-fraud data supported by Tongdun. Now we’re running tests on the integrated database.
Q: The blockchain stores summaries of credit record. So where do users store their original data?A: The original data is stored on the user’s side, currently in the app. We’re now developing an IPFS-based cloud storage plan, which enables users to store their credit data in an individual space, which is completely in their control. At the same time, storing data on the cloud facilitates the interaction of data across different devices and apps.
Q: Speaking of security, we think of not losing the data while protecting privacy. How would you describe the security level of IPFS-based cloud storage?A: Decentralized data storage means the user can access data with a private key, instead of having a centralized intermediary get the information. After researching a few other options we decided to use IPFS, which is the most practical solution available at the moment. We’re testing the stability and speed of an IPFS public chain, to see if it could meet our needs.
Q: Have you launched the DCC mainnet?A: Yes. As you can see in our whitepaper, we have a two-phase plan for our mainnet. The current mainnet belongs to the first phase, and it has been up and running for over eight months. Its data can be found on the Explorer section of our website.
For the second phase, we’re developing a new public chain system, which has a structure similar to the Stellar Consensus Protocol. Moving forward, we’ll try to improve its efficiency and adjust the design of the accounts to fit the needs of the financial industry.
In the current phase, we’re focusing on the development of business logic, which can directly involve the user. Although the user cannot participate in the bookkeeping process, the user is the only authorized person who can initiate all the actions.
Q: What makes users, banks and other financial institutions want to land on the chain? How does DCC motivate them? You know, only when there are a number of members in the ecosystem, can it really form a credit network and do its job.A: If on-chain data storage is the only difference we make, service providers may not find it necessary to get onto our chain because they don’t care about this. What makes them willing to join our ecosystem is that our blockchain facilitates the lending process by enhancing data security, lowering service costs and improving efficiency. All participants can benefit from the DCC ecosystem — individual customers, lending institutions and data service companies.
Q: So how’s the onboarding process going?A: For banks, it may be hard to accept and use DCC, since there can be a lot of challenges in system integration. We did some research and found that blockchain’s strength lies in cross-border credit. The practice of cross-border data transactions are regulated by laws. However, if it is the individual that possesses the data, that person can share such data internationally without breaking any laws. In other words, users can decide how to share their own properties. The largest internet finance company in Korea is very interested in this idea because they would like to attract Chinese customers to borrow from Korean lending institutions.
However, we can only build up our competitive edge by having more institutions in our ecosystem. A single member won’t make much difference. Currently, we’re speaking with credit and lending institutions in Korea, Vietnam, Indonesia and other Southeast Asian countries, to invite them to share data using our ecosystem.
We plan to provide two sets of services — one includes data sharing and verification, and the other is providing lending. Institutions can use both sets at the same time to compare with their old ways of doing business. The incorporation of our services won’t involve much adjustment in the backend, which makes adoption easier on the institution’s side. In the beginning, we may need to help partners and users navigate the platform, but we’ll have more members moving into the DCC ecosystem in the long term, as it effectively reduces lending costs by lowering interest rates.
Q: It can take a long time to construct an ecosystem. Does DCC have a roadmap?A: In the second half of this year, we’ll connect with more data sources and interact with more potential partners. In terms of timeline, we believe that we need about three years to create a competitive edge.
From a technical perspective, we’re not in a rush. Users also need some time to accept all the changes. In China, few people fully understand what it means to maintain one’s credit data. We need to first help people realize the danger of credit data breaches, and then invite them to learn more about the authorization process and usage of credit data.
Speaking of information security, there will be more regulation for personal data protection. Therefore, I believe that the exchange of information between businesses will be more concentrated in the future. Now, it is still pretty fragmented.
Q: Are there any DApps currently connected to DCC’s chain?A: Yes. The first DApp on our chain is Haorenpin, which launched in March. It focuses on lending while also providing credit information inquiry and management services in the Chinese market. It uses the DCC network to keep and send data. In May, BitExpress launched on our chain. This is a DApp developed by an independent team, specializing in credit-based crypto loans. Users can maintain their own credit data, apply for loans in cryptocurrencies including DCC, ETH and EOS, and maintain their loan history on the chain.
Q: What’s the role of token in this ecosystem?A: Traditionally, the cost of lending consists of two parts. The first one is interest, which is related to what you borrow. For example, if I want to borrow US dollars, then the interest I pay must be in US dollars as well. If I borrow Chinese yuan then I’ll pay my interest in the same currency. The second part of lending cost is the cost of service. Lenders used to mix these two things and charge interest based on the sum.
In our system, users maintain their credit data by themselves, and may need to pay fees to various service providers, both domestic and international. Therefore, we plan to separate service costs from interest costs to make things easy and clear. Borrowers still pay their loan interest in the corresponding fiat currencies, but we want to introduce a utility token for the payment and settlement of services in the ecosystem. The incorporation of this token is very important because we can only realize decentralization when we find a way to separate the costs of loan interest and loan service fees. Otherwise we’ll become another fiat currency loan service provider.
In other words, it’s the token that supports the ecosystem while making it more flexible. As users and service providers use the token, they’re also activating the ecosystem.
Theoretically, when this ecosystem grows bigger, or generates more service fees, the token will have greater liquidity and value. Also, there will be more potential for us to explore additional value of the token within the current financial system.
Therefore, we believe the incorporation of the DCC token will help us activate the DCC ecosystem more effectively than simply using the blockchain technology. The use of tokens is highly necessary for the long-term development of an ecosystem like ours.
DCC (Distributed Credit Chain), DCC is the world’s first distributed banking public blockchain with a goal to establish a decentralized ecosystem for financial service providers around the world.
Connect with DCC (English):Telegram Group 1:
https://t.me/DccOfficialBitcointalk:
https://bitcointalk.org/index.php?topic=3206007.msg33290945#msg33290945Facebook:
https://www.facebook.com/Distributed-Credit-Chain-425721787866299/Medium:
https://medium.com/@dcc.finance2018/Reddit:
https://www.reddit.com/r/dccofficialTwitter:
https://twitter.com/DccOfficial2018
