China’s Blockchain Agenda Could Happen Sooner Than You Think
In this concluding report from a recent RMIT Europe workshop on blockchain held in Barcelona, the focus is on China and blockchain. In the first post, the main speaker shares how blockchain stands to capture an estimated 35% of global economy cost – about $27 trillion.
China seems to be looking at blockchain as a part of the Belt and Road Initiative – like a trade infrastructure, the RMIT University professor surmised in Barcelona. Jason Potts notes that it is “absolutely a standards game and the standard China is – I’m just speculating here – looking into is basically using 5G and other types of standards being pushed through Belt and Road supply chains.”
He suspects that China could push blockchain standards next citing Alibaba as already doing that “on a huge scale.” So, as China operates in an export industry and trade globally, more large retail supply chain consortia could see blockchain as a trade infrastructure standard for payments, record keeping and standardisation of information moving between contracts.
The blockchain-as-a-trade infrastructure viewpoint trounces its use for digital money for China, Pott opines, and the technology is going to transform the global economy sooner than expected, explaining:
“Every major general purpose technology that we know about – from electricity to lasers to plastics and so on – has somewhere between 50 and 30 years. Mobile phones were the previous fastest. Nothing short of a few decades. But every single one of those started somewhere, let’s say America or Manchester and then spread to the rest of the world. It started in an industry, let’s say automotive, and then spread to the rest of the world. This technology isn’t like that. This is borne out of open source software so the costs of getting involved are relatively low. It’s borne on the internet and it is borne globally. So what you’ve got now is a technology that comes out of open source software; being experimented in every country you can think of; in every industry you can think of simultaneously. That’s why it’s happening so fast, not because of huge government support or enormous excitement in one industry. It’s just massive grassroots low-cost experimentation everywhere. Everyone is learning from everyone else.”
The China factor
Most of the world’s experimentation with blockchain is now happening in China. Aside that, Pott maintains that the massive learning about the open source technology with less right stopping anyone from using it, continues to grow globally including China.
He views that China, as “a country with lots of broken ledgers”, is looking at the technology to fix ledgers right from the start. This creates business opportunities from the bottom up and has seen a lot change in the last three years as Chinese entrepreneurship – not the government – put a lot of investment into the space.
“A few months ago, I was looking at a lot of (Chinese) startups in the space. “What are you working on? and they are like ‘nursing homes.’ And I was like, seriously, ‘what?’ ‘Nursing homes.’ Keeping track of the hundred million old people that are about to descend and none of them have social insurance and we need to know who they are and figure what property they have got,” Pott notes about emerging blockchain-based opportunities in China. He likened these opportunities to going back 60 or 80 years in any country to look at the basic problems that needed to be and got solved by governments.
“It’s a different entrepreneurial mindset. (China) is not seeing this as a cutting edge technology to sell to millennials. It’s basically: what are the big social properties that have broken and that involve keeping track of stuff and knowing who is who and what is what ….”
However, if the blockchain technology takes longer to spread, it would be for cultural, psychological or regulatory reasons but not technical reasons, Pott claimed.