As virtual currency bitcoin has gradually become a household name, there has been much discussion about the potential of blockchain, the digital technology that underpins such cryptocurrencies, emerging as the next frontier of innovation.
Blockchain’s hallmark is decentralisation. Data can be shared among a distributed network of computers with no need for middlemen. Once recorded in a blockchain-based ledger, data is hard to tamper with.
“In the next three years, blockchain technology is forecast to be widely adopted in sectors such as product traceability, copyright protection, bill verification, precision marketing, energy and healthcare in China,” said Yu Jianing, director of the Institute of Industrial Economics at the Ministry of Industry and Information Technology.
Steve Larke, partner in the technology consulting at Deloitte, said in a recent report: “Blockchain has the potential to transform the way that individuals and organisations interact, the way that businesses collaborate with one another, the transparency of processes and data, and ultimately, the productivity and sustainability of our economy.
“It can be used across the entire value chain, benefiting businesses and consumers alike.”
So far, a complete value chain for the blockchain sector has emerged in China, ranging from hardware manufacturing, platform and security to application services, investment, media and human resources, according to a white paper released by the Information Centre at the ministry.
According to the report, the number of blockchain technology companies in China exceeded 456 by March. They are exploring ways to apply blockchain in a wide array of areas.
Some start-ups hope the technology can help transform the intellectual property industry. With blockchain tech, online content such as novels and musical compositions can be copyrighted as soon as the owner creates them. Reprints or citations are only allowed with the owners’ approval, and those guilty of infringements can be sued.
Chinese start-up companies Beijing Banquanjia Tech and Yuanben Blockchain are at the forefront of creating such solutions.
Blockchain technology could also bring widespread adoption in intelligent industries, according to Wang Feiyue, director of the State Key Laboratory for Management and Control of Complex Systems of the Chinese Academy of Sciences.
Mr Wang said blockchain technology could lay a solid foundation for the development of automation and intelligent industries, in terms of data security and trust.
He said smart contracts－the coding on the blockchain that allows transactions to take place－can help deal with the uncertainty and complexity of the real world, while enhancing reliability.
Mr Wang likened innovations in blockchain to the groundwork for the construction of tall buildings.
Last year brought a peak for blockchain development in China, with 178 new companies in the sector. Investors flocked into the market, with almost 100 equity stock investment deals in the 12 months, a record in recent years. Between January and March this year, the number of equity investment deals exceeded 68.
Besides start-up companies, technology giants such as Alibaba Group Holding are exploring blockchain’s potential uses. In June, Alibaba’s Ant Financial Service Group partnered with Philippine telecommunication giant Globe Telecom to offer real-time cross-border remittance services for individuals and small and medium-sized enterprises.
The new service, claimed to be the first of its kind in the world, tests the huge potential of blockchain technology, allowing users to send and receive money within seconds.
Jack Ma, Alibaba founder and executive chairman, said at a launch event that such a service helps realise the company’s vision to make financial services accessible and affordable for every consumer. “This heralds the beginning of great times. This marks the beginning of great innovation,” he said.
Li Bin, assistant director of the China Information Technology Security Evaluation Centre, said the gradual adoption of blockchain technology across diverse sectors would truly realise cross-industry digital collaboration. It could reduce operational costs while further improving efficiency.
“At the same time, such technology can help establish a reliable platform for government supervision of food safety. The quality of life of Chinese and even global consumers can be improved,” Mr Li said.
Blockchain technology is in its nascent stages. A report from Deloitte said a return on any investment and the full value of implementing a blockchain strategy might not be felt for a number of years, given that the tech has only reached its early stages, and expertise in the area is limited.
Yuan Peizhang, product manager of Beijing Chilun Yichuang Technology, said blockchain technology in itself is not a problem, but companies should not use it as a gimmick to commit fraud.
“Most people lack basic understanding of this new technology, as hardly any courses on it can be found in higher education institutions,” he said. “Many companies are using the blockchain concept as a gimmick, but what they actually do has nothing to do with blockchain.”
To further drive the sustainable development of blockchain, the central authorities have expedited the creation of guidelines and standards for the technology. Last December, the Standardisation Administration of China approved a project to establish the country’s first national industry standards for blockchain technology.
The standards are expected as soon as the end of next year, according to the Economic Information Daily, citing Li Ming, director of the blockchain research institute at the Ministry of Industry and Information Technology. They will cover operations and applications, processing and methodology, and information security.
This article was originally produced and published by China Daily. View the original article at www.chinadaily.com.cn