China has made blockchain technology a strategic priority. The blockchain-based service network (BSN) is part of an effort to build capacity in this area.
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President of China Xi Jinping His country has declared that it needs to “seize the opportunity” presented by blockchain technology.
In a 2019 speech, Chinese leaders said blockchain is “an important breakthrough in independent innovation of core technology.” As a result of that speech, blockchain has been raised to a national priority for China, among other technologies that China is trying to enhance its capabilities, such as semiconductors.
Since then, without much publicity and fanfare, China has built a platform aimed at facilitating the deployment of enterprise blockchain technology. This is called the blockchain-based service network (BSN).
This is what we have ever known.
Blockchain became the first to stand out as the underlying technology for cryptocurrencies Bitcoin.. This is a distributed ledger that records transactions on the Bitcoin network.
It is decentralized and no single entity owns or runs it. Instead, it is maintained by a network of participants running a dedicated computer.
Since then, there have been many different definitions of what a blockchain looks like. Some companies and governments may call this distributed ledger technology. Much of it comes from whether the blockchain is public or private.
With permissionless blockchains (also known as trustless blockchains or public blockchains), anyone can join the blockchain and make changes as long as they are running specific software or devices.
In contrast, authorized blockchains are usually private, allowing only certain participants to be involved in their use.
Technology advocates say blockchain helps bring transparency and speed to normally slow and costly processes such as cross-border remittances.
Another important aspect of blockchain technology is the so-called smart contracts. These are contracts written in code that are automatically executed when certain conditions are met. Proponents believe these are important in areas such as trade finance.
“I think blockchain technology is very powerful and will change almost everything in the Internet as a whole and in IT system architecture,” Yifan He, CEO of Red Date Technology, told CNBC.
Red Date Technology is one of the founding members of China’s blockchain-based service network.
“Blockchain technology is generally very important to China. Government officials consider it a low barrier to the entry technology sector, and Chinese companies use blockchain applications to solve real-world problems. We want to push the boundaries of what we do, “the leader of technology policy consulting firm Albright Stonebridge told CNBC.
BSN’s products are aimed at enterprises, especially those operating cloud computing infrastructure.It could be a large public cloud player such as Amazon Also MicrosoftOr a company running its own private cloud or intranet.
BSN is proud to be a “one-stop shop” for deploying these blockchain applications in the cloud. This process can be costly and time consuming.
Another selling point for Chinese companies is trying to solve the industry’s difficult problem of interoperability: making different blockchains work together. For example, if both banks have applications built on different blockchain platforms, they may not be able to work together. However, applications built through the BSN infrastructure are interoperable because the company bridges the various blockchains.
For companies that want to use multiple blockchain applications within their organization, BSN’s products allow it through the cloud vendors they use, rather than installing a large number of new servers to build the blockchain products. You can do it. The idea is that companies or governments can easily deploy blockchain applications using the BSN platform without incurring high costs.
According to Red Date He, current demand is low, but he is bullish on the long-term future of the product.
“Within 10 years, we expect all clouds to have a standard blockchain environment to handle all blockchain-related applications,” said the CEO.
However, one of the key points of BSN is not to create your own blockchain.
No cryptocurrency is connected to the BSN platform.That’s because China has virtually banned it. Cryptocurrency related activities And made them illegal.
Jehan Chu, a Hong Kong-based managing partner of venture capital firm and investor in Red Date Technology, does not want or need cryptocurrencies to connect to infrastructure by governments and large corporations. I told CNBC that I wouldn’t.
“This is where non-cryptic use cases are emerging and BSN provides a compelling infrastructure,” Chu said.
Uncrypted blockchains can be attractive to large companies that do not want to be exposed to the dangerous and volatile nature of digital currencies.
Headquartered in Hong Kong, Start-up RedDate Technology is one of the founding companies behind BSN.
However, this project is also supported by an organization affiliated with the Chinese government. This includes the National Information Center (SIC) under China’s Powerful National Development and Reform Commission (NDRC).
China mobileThe state-owned telecommunications company, also supports this project.
BSN has an ambition for globalization. However, ties with the Chinese government can make it difficult.
“Part of the interest in BSN is that it is such an ambitious business, which also means that it is under close scrutiny due to the ties of the Chinese government. “Albright Stonebridge’s Triolo said.
He added that BSN is “trying to separate the BSN International part from domestic efforts.” [trying] To stay away from the support of the Chinese government. “
For him, CEO of Red Date Technology, this challenge has not been lost.
“This is a huge challenge,” he admitted when asked about his plans for globalization and his perception of the connection with the Chinese government.
He said the international version of the platform is open source, allowing public domain participants to inspect code for potential backdoors.
On the other hand, centralizing BSN’s blockchain efforts could be a global challenge.
“There is a fundamental incompatibility between China’s expressed ambition to support the domestic blockchain development ecosystem and the decentralized nature of blockchain technology,” said Blockchain.com’s Research Responsibility. Garrick Hileman told CNBC.
“Unless China somehow finds a way to get used to the destructive forces inherent in blockchain adoption and the loss of centralized control, China will become a global leader in this strategically important technology sector. The chances are zero. “
The CEO of Red Date also acknowledged that having no cryptography on the platform was a challenge. He said that “many people are not interested” in offering non-cryptographic blockchains.
Over the past few years, the United States has been engaged in fierce technological competition.
Chinese tech companies have also put a lot of emphasis on international expansion, a move favored by Beijing in the context of the global technology battle with the United States.
“The importance of the blockchain service network is that it is an attempt by the Chinese government to support the development of the blockchain ecosystem on its own terms, given regulatory approaches in different jurisdictions,” Triolo said. Mr. says.