China government blockchain launching 25 April, may integrate ETH and EOS
China's blockchain launch will punctuate industry development, but question marks remain.
Tomorrow, on 25 April, an alliance of Chinese government groups, banks and tech companies is set to launch to the Blockchain-based Service Network (BSN).
It's essentially like an operating system, where participants can get into it and start using existing blockchain programs, or where they can build their own from the ground up.
In the context of the international race for blockchain adoption, it's worth considering where the BSN sits on the field.
It's here, it's real, it's presumably fast, useful and soon-to-be widely used. But it's also highly centralised.
What does change look like?
"Looking at this international competition for blockchain adoption — China's leadership is still in question," says DeFiner CEO Jason Wu. "In China, Government related R&D, think tanks, and stated owned companies are leaders in the field of blockchain. However, the general public or private sector is not as advanced as the U.S."
Without achieving true decentralisation and trustlessness, the BSN will fall short of blockchain's potential, Wu predicts, more closely resembling a jazzed up IT platform more than a groundbreaking innovation and unable to meaningfully change people's day to day lives.
By this metric of innovation — the extent to which something changes the world — the BSN might not look like much.
"The fundamental principle of blockchain is about decentralisation to achieve standardisation and to become a public commodity like oil or coal," he says.
"This usually fails if the project is led by a big organization, as the fundamental consensus is different. BSN will be like a traditional IT platform — it can’t solve the trust issue as there is still a centralised organization to manage the network. For this reason, it is not a blockchain breakthrough nor will it bring fundamental change to society. Decentralized Finance (DeFi), on the other hand, is a true fundamental change, as it will have a big impact on people’s financial transactions."
Behind the scenes
Meaningful change doesn't always start in the end user's pocket though, suggests GSX Group CEO Nick Cowan.
Sometimes it begins with changes like faster, cheap settlements in capital markets which have to work their way through the global financial system before people can start feeling the benefits.
In these cases, moves such as the BSN could throw open the doors to helping businesses develop blockchain faster, especially since the technology is still in such early days.
"We’re using blockchain to transform the capital markets legacy systems, driving efficiencies, removing counterparty risk and lowering costs, from a T+2 model to T Instant," he says. "Our work is but one area of blockchain-powered innovation, and if more countries lend their support to bespoke blockchain programmes we could see more innovations like our own across a range of sectors, empowering companies to improve the lives of millions of people around the world."
"To be clear, blockchain is still very much in the early stages of development, despite a plethora of exciting solutions that have already come to fruition," he said.
A move in any direction
Despite all the question marks hanging over it, it's pretty safe to say the BSN will spur more blockchain innovation and shift things in a positive direction, notes CoinSwitch and CruxPay CEO Ashish Singal.
Plus, word on the street is that it could be integrating the Ethereum and EOS blockchain too, he says, which raises even more uncertainties, but with a but of a positive lilt, around how this will all pan out.
"The BSN is probably not the first attempt, but may be the largest attempt at blockchain adoption by the government of a powerful nation," he said.
"This move might set off other governments in similar directions, which is a good thing. Another positive thing coming out of BSN is its acceptance of public blockchain. At first, it was widely believed that BSN would only incorporate permissioned blockchain, but it now seems that they will integrate the Ethereum and EOS blockchain too. This is a considerable move and may act as a catalyst for mass adoption."
"China, although opposed to cryptocurrency, can undoubtedly be considered as a leader in blockchain space. They have filed the highest number of blockchain patents in the world. For a while now, they have been trying to launch a blockchain-based national currency and have roped in all major sectors including payments, telecom, internet giants etc. to work on BSN," Sigal said.
"Despite this, it must be acknowledged that there are concerns that BSN is highly centralised and maybe an attempt by the Chinese government to control this new industry. There aren't many details around this concern available right now. We will have more information when it makes its public launch."
Disclosure: The author holds BNB, BTC at the time of writing.
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