Chinese President Xi Jinping has announced that his country needs to “take advantage” of blockchain technology.
In a speech in 2019, the Chinese leader said the blockchain was “an important milestone in the independent development of basic technology.” As a result of that statement, the blockchain has been promoted nationally in China, among other technologies – such as semiconductors – a country that is trying to increase its power in it.
Since then, in addition to publicity and popularity, China has built a platform aimed at facilitating the deployment of blockchain technology to companies. It is called the Blockchain-based Service Network (BSN).
Here’s what we know so far.
what is a blockchain?
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
Blockchain began to emerge as a basic cryptocurrency bitcoin technology. It is a distributed workbook that records transactions on the bitcoin network.
Divided and no single business owns or owns it. Instead, it is maintained by a network of participants using special computers.
Since then, there have been many different interpretations of what the blockchain might look like. Other companies or governments may refer to it as distributed technology. Much of that is based on whether the blockchain is public or private.
Unauthorized blockchains – also known as blockchain or public blockchains – allow anyone to join and make changes to the blockchain, as long as they use a particular software or device.
In contrast, approved blockchains are generally confidential and only allow certain participants to participate in their use.
Why use blockchain?
Proponents of her case have been working to make the actual transcript of this statement available online.
Another important aspect of blockchain technology is the so-called smart contracts. These are contracts, coded, that apply automatically when certain conditions are met. Proponents of her case have been working to make the actual transcript of this statement available online.
“We think blockchain technology is so powerful it will change the whole internet and almost every IT architecture IT,” 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 often very important in China, as government officials see it as a low barrier to entry technology, and they want Chinese companies to push the envelope in using blockchain applications to solve real-world problems,” said Paul Triolo, technology policy. who heads the consulting company Albright Stonebridge, told.
What can BSN China do?
BSN product is targeted at companies, in particular, those that operate cloud computing infrastructure. That could be a major public cloud player like Amazon or Microsoft, or it could be a company with its own private cloud or intranet.
BSN credits themselves as a “single store” to supply these blockchain applications in the cloud, a process that could be costly and time consuming.
Another selling point of a Chinese company is that it tries to solve a difficult problem in the industry: collaboration – or making different blockchains work with each other. For example, if both banks have applications built on different blockchain platforms, they may not be able to work together. But applications built with BSN infrastructure will work together as the company integrates different blockchains.
For companies that want to use a few blockchain applications in their organization, the BSN product will allow them to do that through the cloud vendor they use rather than installing a host of new servers to build a blockchain product. The idea is that a business or government can use the BSN platform to easily block blockchain applications, without incurring high costs.
Demand is now low, according to Red Date’s He, but still strong over the long-term future of the product.
“I believe that in 10 years all clouds will have a normal blockchain environment to handle all blockchain-related applications,” said the CEO.
One important point about BSN, however, is that it does not make its own blockchain.
No cryptocurrency attached to the BSN site. That is because China has successfully banned cryptocurrency-related activities and made them legal.
Jehan Chu, a managing partner at Hong Kong-based Kenetic, a business finance company and investor in Red Date Technology, told CNBC that governments and corporations do not want or need cryptocurrency connected to their infrastructure.
“This is where the case for non-crypto use comes in and BSN provides compelling infrastructure,” Chu said.
Non-crypto blockchains can attract large firms that do not want to be exposed to the dangerous and volatile nature of digital currencies.
Who is following BSN?
Start-up Red Date Technology, headquartered in Hong Kong, is one of the founding companies of BSN.
But the project is also supported by organizations with links to the Chinese government. This includes the State Information Center (SIC) under the dynamic China National Development and Transformation Commission (NDRC).
China Mobile, a state-owned telecommunications company, also supports the project.
The challenge of traveling around the world
BSN has ambitions to travel worldwide. However, its connections with the Chinese government could make it difficult.
“One of the interesting things about BSN is that it is a work of excellence. This ambition also means that we have been scrutinized because of our engagement with the Chinese government, ”said Triolo of Albright Stonebridge.
He added that BSN “tries to separate part of BSN International from domestic efforts, and [tries] away from Chinese government support.”
The challenge is not lost on Him, the CEO of Red Date Technology.
“It’s a huge, huge challenge,” he acknowledged when asked about the plan to go global and the perception of being linked to the Chinese government.
He said the international version of the platform will be open-source, allowing participants in the public domain to inspect the code for any potential backdoors.