February 20, 2025 Dr. Xiao Feng, Chairman and CEO of HashKey Group, delivered a keynote speech titled Blockchain: Starting from the Origin at the Web3 Voyage event hosted by HashKey Chain. Below is the full text of the speech, transcribed and organized from live notes, with some minor edits that do not alter the original meaning.
Good afternoon, everyone. First of all, I’d like to welcome you all to today’s event.
On August 28, 2023, we gathered at this very same venue—the Hong Kong Maritime Museum—for the launch ceremony of our Hong Kong-based exchange, HashKey Exchange. Hong Kong is a port city, steeped in maritime heritage, which is why we chose this symbolic location for our opening event. Today marks the second time our group has held an event here. HashKey Exchange represents one wing of HashKey, while HashKey Chain is the other. In today’s speech, I’ll explain in detail why the HashKey Chain is so vital to us.
Blockchain: The New Financial Infrastructure
Let’s start from the origin of blockchain—from first principles, from the ground up. We need to examine the much-discussed topic of crypto assets, or virtual assets as they’re sometimes called. All of this is built on blockchain technology. So, let’s return to the basics and ask: what exactly is blockchain?
The Three Elements of Human Social Evolution
Before diving into the main topic, I’d like to reference the work of a Nobel Prize-winning economist who studied the Industrial Revolution. He concluded that “an Industrial Revolution had to wait for a financial revolution.” His research covered the first three industrial revolutions, and now we’re in the midst of the fourth—the era of intelligence and digitization. He argued that every industrial revolution relies on new financial innovations to thrive and expand. Without a financial revolution, the industrial leaps of human society might not have succeeded.
Many people shy away from admitting that blockchain is a foundational infrastructure for the fourth industrial revolution. That’s why we often hear about “consortium blockchains” or “coinless blockchains.” But the past decade has shown that these approaches largely fall flat. We must boldly acknowledge that blockchain, as a tool for reshaping production relationships, finds its core application in finance. Without financial demand, there’s no need for blockchain. This means that as humanity enters the fourth industrial revolution—marked by digitized, intelligent innovations in production—a new financial revolution is essential. Without it, this transformation might falter or fail entirely.
The Four “Industrial Revolutions”
This economist further noted that every industrial revolution is a convergence of an energy revolution, an industrial revolution, and a financial revolution—with the financial revolution often serving as the prerequisite.
This reminds me of studies in physics: societal progress and technological advancement hinge on the interplay of energy, power, and information. This aligns closely with the concepts of energy revolutions, industrial revolutions, and financial revolutions in certain contexts. Let’s look back at the past three industrial revolutions:
The first, marked by the steam engine, emerged in Britain;
The second, driven by electricity and wireless communication, rooted in the United States;
The third, defined by computers, code, and the internet, also rose in the U.S.
Another scientist once pointed out that humanity has undergone three cognitive revolutions:
The first was the invention of language, enabling person-to-person communication;
The second was the creation of writing, allowing knowledge to be recorded and passed down;
The third, in the last century, was the invention of code. Code, as a new language, has exponentially expanded human communication, coordination, and connectivity.
Without code, there would be no AI, no blockchain, no internet. Code created a language for humans and machines, and between machines themselves, vastly expanding the scope of information and economic activity. This explains why today’s listed companies can reach market caps of $3 trillion, while in the industrial economy era, the ceiling was around $600 billion—think ExxonMobil or General Electric. Now, trillion-dollar companies are commonplace, and some predict Nvidia could hit $5 trillion or even $10 trillion.
The Fourth “Industrial Revolution”
The fourth industrial revolution began in the early 21st century, characterized by blockchain, AI, and cloud computing. If I were speaking in January, I wouldn’t have dared to tie it to China, but now I can confidently say that China and the U.S. are jointly driving this wave. From the internet to AI, the top ten platforms and large-scale model developments are almost exclusively concentrated in these two countries—Europe and Japan are barely in the picture. China has firmly boarded this fast-moving train.
Yet, the fourth industrial revolution requires a financial revolution to sustain it. Britain relied on credit and bond markets; the U.S. leaned on investment banks and capital markets; the third revolution was fueled by venture capital, birthing Silicon Valley and China’s internet giants. Doesn’t the fourth industrial revolution deserve its own financial paradigm?
The greatest value of AI lies in embodied intelligence and spatial intelligence, which depends on vast numbers of robots. So, let me ask: what currency will robots use to pay each other, or for humans to pay robots? Dollars? Chinese Yuan? Only programmable money based on smart contracts can meet this need. This suggests that the fourth industrial revolution demands a new financial revolution—without it, its potential will be severely constrained.
The Fourth “Financial Revolution”
The fourth industrial revolution is inseparable from blockchain, smart contracts, digital wallets, and programmable money. Blockchain is a transparent, global public ledger. In human history, accounting methods have changed just three times in millennia: single-entry bookkeeping from Sumerian times, double-entry bookkeeping from 14th-century Italy, and distributed ledger technology ushered in by Bitcoin in 2009. Distributed ledgers emerged to meet the cross-temporal, cross-spatial, and cross-organizational demands of digital existence, forming the financial backbone of the fourth industrial revolution.
Compared to traditional finance, this new financial system brings three major shifts:
Accounting evolves from double-entry to distributed ledgers;
Accounts shift from bank accounts to digital wallets;
Units of account move from fiat currencies to digital currencies. This has given rise to crypto assets—a new asset class based on distributed cryptographic algorithms and ledgers.
Blockchain’s First Principles
What is the first principle of finance? It’s the intertemporal and cross-spatial mismatch of value—a core essence unchanged for thousands of years. But the methods of delivery have evolved: from no banks to banks, from no central banks to central banks. Some argue that finance’s essence remains constant, and banks or exchanges are just tools. In a digitized world that transcends time and space, payments have become peer-to-peer, distributed, and self-organized. A remittance from Hong Kong to the U.S. now takes minutes, without five institutions reconciling accounts. Which system better serves human nature—near-instant settlement with near-zero fees, or the old way?
The Essence of Finance
Decentralized finance (DeFi) on blockchain offers yields of 10%-20%, sometimes even 30%-40%. Traditional finance often warns that returns above 7% signal a scam, branding DeFi a Ponzi scheme. After years of reflection, I’ve concluded that regulated DeFi projects offer risk-free returns with leverage lower than banks—whose capital adequacy ratio is just 12%—yet achieve high yields through over-collateralization. The key lies in capital turnover efficiency: banks might manage 12 turnovers a year at best, while DeFi can hit tens of thousands, with flash loans settling in seconds. This efficiency is the allure of new finance.
From Digital Native to on-chain representations
Let’s touch on a few hot topics, starting with Real World Assets (RWA). A decade ago, stablecoins like USDT (launched in 2015) kicked off currency tokenization. By 2024, their transaction volume hit $16 trillion with a market cap of just $300 billion—far more efficient than traditional finance’s $300 trillion in volume. Since 2024, tokenization of financial assets has taken off, with U.S. asset managers minting fund shares on public blockchains, a market poised to outstrip stablecoins. The third wave—tokenization of physical assets—requires solving the oracle problem to bridge offline assets to on-chain digital twins.
Five Types of Tokens
Tokens come in many forms, each serving distinct purposes. They can be categorized into five types:
Payment tokens (e.g., stablecoins);
Reserve tokens (e.g., Bitcoin);
Utility tokens (e.g., Ethereum’s ETH);
Security tokens (e.g., ETF shares);
Meme coins (e.g., tokens issued by Trump).
Finally, I’d like to say that we’re entering an era of “off-chain to on-chain.” In 2025, this trend will hit us full force, driven by U.S. legislation and presidential support. Once the U.S. grants legitimacy and compliance to the crypto industry, other nations will follow—Hong Kong has already taken the lead with its own laws. Global financial institutions will then flood into the crypto space, building new payment and settlement systems on blockchain or issuing new financial assets via token economies.
The “on-chain” era is about to explode.
That’s all from me. Thank you, everyone.
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