‘Blockchain Without A Token’ Is Growing in Popularity in China
As Chinese regulators continue to crack down on ICO and cryptocurrency tradings, many blockchain industry insiders in China believe blockchain projects without any coins or cryptocurrencies will attract more investment inflows due to their better compliance with regulatory requirements.
Now “Blockain without token” is a new development trend for the industry as China Central Television (CCTV), the country’s government mouthpiece, has highlighted the new phenomenan last night. On May 19, a $160 million(or RMB 1 billion) blockchain investment fund , dubbed Beijing Blockchain Ecology Investment Fund, was launched with the support of Beijing Municipal Bureau of Financial Work. It aims to become the first government-guided fund in Beijing focusing on blockchain applications without tokens.
The newly-launched blockchian investment fund is looking to invest in blockchain-related education and training, non-financial applications of blockchain, blockchain R&D initiatives, and the blockchain-based endeavour to expedite transformation of traditional enterprises and industries. And Star Xu, founder of the world’s largest cryotocurrency exchange OKEx, will be the manager of the fund.
Although the token-based incentive mechanism is widely considered the core value of blockchain application, in fact, not all blockchain applications need token incentives. Without token mechanism, how can be blockhcain applied to various industries? The consortium blockchain may be offer a solution. It is noteworthy that
For example, an arbitral institution, a financial service institution and a company jointly build a consortium blockchain based on an agreement, on which each transaction will be recorded by all participants.
Blockchain technology ensures that the records cannot be tampered with. When the the agreement of the financial institution or the company needs to be arbitrated, they should only initiate an online request, and the arbitral authority can determine whether the data or evidence is authentic and legal based on the common records of all participants on the blockchain. Such solution greatly saves the cost of arbitration, and therefore does not depend on token incentive any more.
“ It might take one to three months to complete an arbitration previously, but now it can be done in 7 days with the help of blockchain technology. Further, costs for it would be cut 90%.” said Li Bin, the chief researcher of We Bank’s fintech department.
Chinese bitcoin tycoon Li Xiaolai also believes that a large number of blockchain applications do not need to offer incentives for participants, and in this case, there is no reason to issue a cryptocurrency.
China’s blockchain community begins to take shape, and tech giants BATJ (BIDU, Alibaba, Tencent and JD) have already marched into the industry without issuing cryptocurrencies. Blockchain is expected to be a key pillar for digital China in the future, and we will see a wide adoption of blockchain in the next three years.