China’s BSN to Face Two Key Issues After Global Launch
The question of what could be the primary problems of China’s Blockchain-based Service Network (BSN) project and what such portends for the global blockchain industry has arisen as the April 25 launch date draws near.
Spearheaded by government groups, banks, and technology companies, the BSN aims to help Chinese companies adopt blockchain faster and for less cost, which has triggered the view that it could make China become a leader in the international race for blockchain innovation.
“The creation of the BSN indicates the importance China has put on taking a leading role in the development of blockchain, at a time when swift, decisive action will be key to making a large impact in the future digital global economy,” Nick Cowan, CEO of the GSX Group said, also noting that China’s increased appetite for blockchain exploration is a recognition of the tremendous value the nascent technology can bring to practically every industry.
China – although opposed to cryptocurrency but has had the highest number of blockchain patents filed in the world and is pushing to launch a blockchain-based national currency – roped in all major sectors including payments, telecom, internet giants, etc. to work on BSN, according to Ashish Singhal, CEO of Coinswitch and CRUXPay, to offer a positive environment for the development of a blockchain solution for as low as $300.
Global blockchain competition may start
Further to its positive implications for blockchain adoption in Chinese enterprises, the launch of BSN may kickstart a global race among countries over time.
“The launch of China’s Blockchain-based Service Network (BSN) will increase the blockchain adoption competition between countries,” Jason Wu, CEO of DeFiner said, citing how the advance announcement of the BSN forced the Facebook blockchain project, Libra, to settle with the U.S. Congress to move forward and launch a U.S. dollar-pegged stablecoin.
“This move might set off other governments in similar directions, which is a good thing,” Singhal adds though he believes the BSN is probably not the first but may be the largest attempt at blockchain adoption by a powerful nation’s government.
Mistrust for BSN
Competition will have a long-term educational impact on helping people become more familiar with digital assets and growing the industry but the impact will be limited in the short term because subsequent Chinese blockchain projects on BSN will all be led by a centralized organization and not be wholly supported by the current blockchain consumers-based community, Wu adds.
“Looking at this international competition for blockchain adoption — China’s leadership is still in question. In China, government-related R&D, think tanks, and state-owned companies are leaders in the field of blockchain. However, the general public or private sector is not as advanced as the U.S.,” Wu said pointing out how the centralization feature contradicts the fundamental principle of blockchain which is about decentralization to achieve standardization and to become a public commodity like oil or coal. “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 centralized organization to manage the network. For this reason, it is not a blockchain breakthrough nor will it bring fundamental change to society.”
Singhal likes that BSN accepts public blockchains – Ethereum and EOS – contrary to previously-held belief that it would only incorporate permissioned blockchain describing the move as likely to “act as a catalyst for mass adoption” but points out centralization too.
“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,” Singhal said. “There aren’t many details around this concern available right now. We will have more information when it makes its public launch.”