The blockchain landscape has experienced waves of excitement and skepticism over the past decade. While early enthusiasm centered on cryptocurrencies like Bitcoin, the focus has gradually shifted toward real-world applications—especially in finance. But for blockchain to achieve mainstream adoption, one critical evolution is necessary: the shift from anonymous to real-name blockchain systems.
In a recent episode of Zhiyong Dialogue, Luo Zhiyong sat down with Cao Hui-Ning, Professor of Finance at CKGSB and founder of Usechain—the world’s first self-sovereign identity blockchain ecosystem. Their conversation offered deep insights into the future of blockchain, regulatory challenges, and how identity-integrated chains can unlock scalable, trustworthy financial innovation.
The Identity Problem in Blockchain
Blockchain was originally designed for anonymity. While this protects user privacy, it has also enabled rampant fraud, speculation, and money laundering—issues that triggered strict government oversight globally.
"Anonymous chains have their benefits, but large-scale, legitimate applications must be transparent to regulators," said Cao. "Otherwise, they can't survive."
True trust in financial systems depends on verifiable identity. Without it, building credit history, ensuring compliance, or preventing malicious activity becomes nearly impossible. This is where real-name blockchains come in.
👉 Discover how identity-powered blockchain networks are reshaping trust in digital finance.
Why Real-Name Chains Are the Future
Cao argues that real-name chains are the only viable path for mass adoption, especially in regulated industries like banking, insurance, and capital markets.
But “real-name” doesn’t mean public exposure. Instead, it refers to a distributed identity verification model:
- Each user has a verified real-world identity linked to their blockchain account.
- Sensitive data is stored across decentralized nodes, not centralized servers.
- Users control which parts of their identity to reveal during transactions.
- Regulatory authorities can access linkage data through trusted third-party custodians—only when legally required.
This hybrid model ensures privacy for users, compliance for regulators, and trust for counterparties—a balance that anonymous chains cannot achieve.
Solving Blockchain’s Trilemma with Identity-Based Design
One of the biggest hurdles in blockchain development is the so-called "impossible trinity": achieving scalability, decentralization, and security simultaneously.
Most projects sacrifice one for the others:
- Bitcoin prioritizes security and decentralization but suffers from slow speed.
- EOS boosts performance by relying on 21 elected nodes—effectively creating centralization.
Usechain takes a different approach: embedding identity at the protocol level to redesign consensus and sharding mechanisms.
Revolutionary Consensus: RPOW & TPOS
Instead of energy-intensive Proof-of-Work (PoW) or wealth-biased Proof-of-Stake (PoS), Usechain introduces:
- Randomized Proof-of-Work (RPOW): Miners are selected randomly via cryptographic functions. Only real-name accounts are eligible, eliminating bot farms and ASIC dominance.
- Time-based Proof-of-Stake (TPOS): Rewards depend on stake duration, not just amount—reducing wealth concentration and promoting long-term participation.
Because mining doesn’t rely on computational power, energy consumption drops dramatically—solving Bitcoin’s environmental concerns.
Scalability Through Identity Sharding
Traditional blockchains struggle with scalability because every node processes every transaction. Usechain uses identity-based sharding:
- Transactions are grouped by geographic or institutional identity.
- Only relevant nodes validate local transactions.
- Results are later aggregated into the main chain.
This allows throughput of tens of thousands of transactions per second, with potential for millions in sub-chains—making real-time payments and high-frequency trading feasible.
Bridging Blockchain and Traditional Finance
Cao believes blockchain will fundamentally reshape financial markets:
1. Decentralized Exchanges (DEXs)
Current crypto exchanges suffer from manipulation, fake volume, and lack of transparency. A real-name DEX built on a compliant public chain can ensure:
- All trades are verifiable.
- Liquidity and reserves are publicly auditable.
- Market manipulation becomes technically difficult.
2. Disruption of VC/PE Models
Blockchain enables new fundraising models:
- Tokenized crowdfunding allows small investors to participate.
- Smart contracts automate investor rights and profit distribution.
- Reputation systems based on verifiable identities reduce information asymmetry.
While this disrupts traditional venture capital, Cao emphasizes that expert guidance remains irreplaceable. The future may see "expert offices" offering advisory services within decentralized ecosystems.
3. Global Payments Without Intermediaries
Imagine paying anyone worldwide instantly—without banks, credit cards, or payment gateways. Usechain aims to enable this via:
- Identity-verified wallets.
- Sub-chains optimized for micropayments.
- Cross-border settlement in seconds.
FAQ: Your Questions Answered
Q: Isn't anonymity a core principle of blockchain? Isn't moving to real-name chains a betrayal of decentralization?
A: Not necessarily. Real-name chains don’t eliminate privacy—they reframe it. Identity verification happens off-chain or through zero-knowledge proofs. The goal is trustworthy anonymity, not complete obscurity.
Q: Can real-name blockchains resist government overreach?
A: Yes, through distributed custody models. No single entity holds full access. Regulatory requests must go through multi-party verification, preventing abuse.
Q: How does Usechain prevent centralization if only verified users can mine?
A: Verification doesn’t equal control. The random selection process ensures no predictable pattern. Thousands of real-name users participate globally—maintaining decentralization while enhancing security.
Q: When will real-name blockchains see widespread use?
A: Cao estimates 2–3 years for broad adoption. Pilot applications in digital identity and payments are expected by late 2025, with decentralized exchanges launching in 2026.
Q: Is government support essential for success?
A: Absolutely. As Cao notes, “Blockchain needs regulatory embrace to reach maximum consensus.” Governments aren’t against the technology—they oppose fraud and financial instability. A compliant chain aligns with both innovation and oversight.
Building a New Financial Infrastructure
Usechain’s vision goes beyond technology—it’s about building a trust layer for the digital economy. With innovations like:
- Identity Virtual Machine (IVM)
- Identity Network Sharding
- Patented consensus algorithms
…it aims to surpass Ethereum and EOS in performance, compliance, and usability.
Applications span:
- Financial services (lending, insurance, asset management)
- Healthcare (secure patient records)
- IoT (device identity verification)
- Gaming (true digital ownership)
All built on a foundation where identity = trust = value.
👉 Explore how self-sovereign identity is unlocking the next wave of blockchain innovation.
Final Thoughts: A Revolution Rooted in Trust
Cao Hui-Ning’s journey—from academia to blockchain entrepreneurship—reflects a broader shift. The era of speculative crypto is giving way to purpose-driven innovation.
Real-name blockchains aren’t about surveillance—they’re about accountability. They enable transparency where needed, privacy where desired, and speed where demanded.
As governments explore digital currencies and institutions seek secure infrastructure, the fusion of identity and blockchain will become the standard—not the exception.
The future of finance isn’t just decentralized. It’s verifiable, scalable, and human-centered—and it starts with real names on the chain.