Expert interpretation: China pushes blockchain technology for independent innovation

China is pushing for global dominance in blockchain, according to a recent report in Wired magazine. Since last year, more than 500 blockchain projects from many powerful Chinese companies have been registered with China’s National Net-a-Porter. Chinese Bank of China is stepping up efforts to launch the Digital Money Electronic Payment System (DCEP), which could replace cash with blockchain solutions that would make China the first major economy to adopt its own digital currency.

Expert interpretation: China pushes blockchain technology for independent innovation

The Chinese government is creating its own digital currency issued by the central bank to reduce the cost of paper money and tighten policymakers’ control over the money supply, Reuters reported.

China, once seen as an imitator in technology, is seeking to become a global leader in areas ranging from blockchain to artificial intelligence, according to a recent report on the Website of the Us Consumer News and Business Channel.

On October 24, the Politburo of the CPC Central Committee held its 18th collective study on the current situation and trends of blockchain technology development. Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, stressed that the integration of blockchain technology plays an important role in new technological innovationand and industrial change. We should take blockchain as an important breakthrough in independent innovation of core technology, clear the direction of attack, increase investment efforts, focus on tackling a number of key core technologies, accelerate the development of blockchain technology and industrial innovation.

According to the definition in the Blockchain White Paper (2019) issued by the China Information and Communications Research Institute (“White Paper”), blockchain is a kind of information-based technology that is maintained by multiple parties and uses cryptography to secure transmission and access, enabling consistent data storage, difficult to tamper with, and preventing credit, also known as distributed ledger technology.

From a target perspective, blockchain is designed to solve the “trust” problem. Under the original model, interactions between people or between two entities were to establish “trust” on third-party individuals or organizations. For example, in online money transfer operations, various payment platforms are third-party entities trusted by both parties to the transaction. It is not difficult to imagine that in the case of third parties are heavily dependent on the transaction process will face a variety of risks. Applying blockchain technology can build a trusted platform, transfer the trust of the original interaction parties to the third party to the platform, and provide technical guarantee for the “trust” of the interaction.

From the method point of view, blockchain technology through the use of distributed ledger, so that each authorization node to save and maintain the same consensus transaction information, thus effectively avoiding the third-party entity centralization of the accounting model existing in the single point of failure, security risks and privacy leakage and other issues. Based on blockchain technology, this trusted platform is built by the power that brings together all nodes. Compared with the past, this new approach re-establishes the trust relationship between unfamiliar interactive entities.

The White Paper notes that blockchain has pioneered a new computing paradigm and collaboration model for low-cost trust in an untrustworthy competitive environment, enabling penetrating regulation and trust-to-step delivery with its unique trust-building mechanism.

Blockchain technology has not yet become a “must-” option in the Internet space, but over time, its importance will gradually become apparent. Throughout the world, major powers are accelerating the development of blockchain technology. Blockchain technology applications have now expanded into digital finance, The Internet of Things, intelligent manufacturing, supply chain management, digital asset transactions and other fields. The development of blockchain technology is of far-reaching significance. On the one hand, the application of blockchain technology is conducive to reducing the cost of “distrust” in the process of entity collaboration, on the other hand, blockchain technology in the “value Internet” era is highly anticipated, or will become the foundation platform of the next generation of Internet.

In the field of blockchain, China not only has a good foundation for development, academic research is becoming more and more active, but also has made some achievements in application. In terms of the number of patents filed and granted, China is a global leader. From the point of view of output value, the relevant enterprises in technology research and development, industrial application has made a series of achievements. From the point of view of technical characteristics, blockchain can be integrated with many fields, resulting in better economic benefits. At present, blockchain is the most in-depth application in the financial field, in the supply chain, social public services, education, health care, industry and other fields there are many attempts and demonstration applications, blockchain technology is accelerating the pace of landing.

Blockchain technology has broad prospects for development and a wide range of applications, but still faces many challenges.

First, the issue of integration remains to be explored. The key word for blockchain is “platform”. To play the role of blockchain, we need to give full play to its platform functions. How to combine blockchain technology with other emerging technologies such as Internet of Things, Big Data, artificial intelligence and so on to maximize its effectiveness is still a question to be explored.

Second, the core technology is the key. China in the development of blockchain more emphasis on application, compared with western countries, there is still a certain gap in the core technology, the lack of key technologies will lead directly to the new “card neck” link. As the development of global blockchain technology is still in its early stages, if we can grasp the opportunity, further increase investment, give more policy support, attach importance to basic research and multi-faceted attempts, attack the core technology, occupy the active position, will greatly enhance China’s international discourse and rule-making power in this field.

Third, the regulatory capacity needs to be strengthened. The benign development of blockchain needs to rely on the improvement of regulatory capability, especially in the context of national conditions, strengthen the protection of data and privacy.

Fourth, the urgent need for high-end talent to continue to help. Blockchain is a multidisciplinary fusion technology such as cryptography, computer science, economics, and so on. This requires a large number of high-end composite talent. Only by strengthening the construction of the talent team, establishing a perfect blockchain talent training system, and increasing the introduction and training of international high-end blockchain talents can we continue to contribute to the development of blockchain in China.

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