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Bitcoin consensus and stakeholders

Bitcoin required consensus

Consensus of rules – which kind of block exists
Consensus of history
Consensus that coins are valuable – who owns the coins

These consensuses provide incentives for bitcoins mining. Bitcoin relies on consensus, it relies on agreement by the participants and that that consensus is a fragile and interdependent thing.

Who are the stakeholders?

Miners write history, make the blocks, record transactions. Investors decide if the bitcoin has any value. Merchants and users influence its acceptance.

FAQ: Why is blockchain attractive?

Beauty of blockchain lies in common agreement

Everyone can agree upon a single published block chain that is the agreed upon history which transactions have happened.

People can agree which transactions are valid and which transactions have actually occurred.

Ability to assign IDs to things in a decentralized way.

This means there is no need for central authority. No one has the final say unlike cash, where central banks decide the volume of money.

FAQ: How do we know if a blockchain transaction is valid?

4 premise to check for transaction validity

  • First, if the consumed coins are valid, that is they really were created in previous transactions. 
  • Second, that the consumed coins were not already consumed in some previous transaction, this is not a double-spend.
  • Third, that the total value of the coins that come out of this transaction is equal to the total value of the coins that went in. 
  • And finally that the transaction is validly signed by the owners of all of the consumed coins. 

FAQ: Who guards the creation of bitcoin?

A crypto currency transaction is always valid. This is so because the user said so. He puts it in the block's history, signs it and this has to be valid.

The beauty of cryptocurrency is here - there is no need to worry if someone is entitled to create coins. Anything that's placed in the history and signed, is valid. This is where the efficiencies of transactions are derived.

Is Tencent raising its game with its credit score system?

All eyes are now on Tencent’s credit score system. But what exactly does this mean for Tencent and its nemesis, Alibaba?

Tencent’s credit score system is stealing the limelight even as onlookers anticipate Alibaba’s monthly update of its Sesame Credit. Tencent is granting some of its users access to its credit score system in the run-up to “8.8 cashless days.” This is Tencent’s latest bid to get a slice of China’s US$5.5 trillion mobile payments market.

Only QQ super members are eligible to view their credit score for the time being. This means users must pay at least 20 yuan to view their credit score. Tencent’s strategy is similar to Alibaba’s Sesame Credit back in 2015.

Accessing Tencent’s credit score is an obscure process. Users must first take note of the “Tencent credit” public number. After selecting “my credit”, users will need to enter the name and identity number. The corresponding credit score then appears; it lies within the range of 300 to 850.

This is just another chapter in the intense battle between Alibaba and Tencent

Tencent and Alibaba have been in a longstanding dispute over payment matters. But Alibaba is advancing much faster when it comes to the credit score system. In January 2015, Ant Financial Services (蚂蚁金服) officially launched the Sesame Credit score. Over the years, it has access to more services – accommodation, travel, consumption, and loans. These rapid changes make many users pay attention to Sesame Credit’s monthly updates.

Tencent has been going all out to promote WeChat payment and QQ wallet. But it has been relatively cautious when it comes to personal credit. As early as 2015, Tencent has become one of the first batches of personal credit licensing units in the Central Bank. Its credit score system’s official website has been inactive for several years.

Tencent’s credit inquiry has been kept on such low profile allegedly thanks to “Pony” Ma Huateng.

“Isn’t such product buying and selling of personal data?” Ma retorted when he was approached by the person-in-charge of the Tencent’s credit inquiry. Ma then demanded that the distribution of the product be stopped for “protecting user’s privacy.”

Ma’s views appear to have changed. In his speech at last year’s Tencent Cloud summit, he mentioned that “Tencent will keep a long-term record of every user’s credit” to protect the rights and interests of its partners.

The absence of a credit system has always been an obstacle to WeChat’s expansion in China. Establishing an in-house credit scoring system is an imperative.

Chinese consumers are more concerned about the actual utility of Tencent’s credit score system

A user’s credit score is broken down into five categories – social index, safety index, wealth index, performance index, and consumption index. These criteria are similar to Sesame Credit’s.

Tencent and Alibaba have their own characteristics and advantages when formulating their own credit systems. Alibaba’s credit data is mainly based on the large number of e-commerce transactions and the addition of financial products such as Yu’ebao (余额宝), which is more heavily weighted towards data from Internet finance.

Alibaba is less adroit when it comes to social networking features. Alibaba has worked hard over the years but the results are not always satisfactory. The latest incident was the “Circles” event. Alipay attracted an uproar when it intended to use the Sesame Credit to enter the high-end dating market. Alipay then pivoted back to focus on payment mode and finance.

Social networking is Tencent’s natural niche thanks to QQ and WeChat. WeChat has nearly 900 million monthly active users while QQ has more than 860 million monthly active users. This can provide a large number of continuous and traceable user behaviour data for Tencent. In its introduction page, Tencent credit mentioned that the user's friendships and his circle of friends are also a factor in measuring one’s credit score.

Tencent does not have the same electronic business platform that Tmall and Taobao have. These platforms can help obtain consumption data. The evaluation of the user’s consumption index mainly comes from Tencent mobile QQ, WeChat payment, and shopping behaviour. Tencent may have access to’s consumption data thanks to QQ’s and WeChat’s connections with the e-commerce company. This means greater prospect of opening up “small credit” with

An average user is more concerned about the practicalities of the credit score. Tencent’s credit score system has limited application for the moment as it is launched not too long ago. Aside from micro credit loan products and Everbright Bank credit card application, other functions such as mobile phone repair and car insurance instalment payment are not the average user’s concern. “Mobike deposits” are capturing substantial attention even though nothing concrete has been unveiled.

How Tencent’s credit score system can sharpen its competitive edge remains up in the air

Bike-sharing companies, including Ofo and BlueGogo, have introduced the Sesame Credit to waive off deposit fees. Mobike is unlikely to tap on the Sesame Credit thanks to Tencent. Mobike’s 299 yuan security deposit continues to draw heavy criticism. Users stand to gain if their accumulated points could leverage on Tencent credit to waive off deposit fee.

Tencent credit score can also be increased through supplementary work and education information. This is not too different from Alibaba’s Sesame Credit. But Tencent risks attracting the lawbreakers’ attention as its application scenarios expand in the future. Ant Financial once refuted the “swiping scores” claim by insisting that the so-called “gaining points” method is implausible. Tencent risks facing the same fate; it must be ready for this.

Tencent and Alibaba are waging a new battle in the credit score scene. But it remains uncertain whether Tencent, who has a slower start than Alibaba, can still wield the similar counter attack move it did with its WeChat payment years ago.