China has been quietly developing a framework to make blockchain technology deployment easier for businesses, with little fanfare. Blockchain-based Service Network is its name (BSN).
Xi Jinping, the President of China, stated that China must “seize the opportunities” that are brought to the table from blockchain technologies.
Xi Jinping said that blockchain has become an “important breakthrough in independent innovation of core technologies.” As a result of that speech, China has elevated blockchain to a national priority, among other technologies like semiconductors, in which the country is attempting to improve its skills.
Blockchain proponents claim that the technology can help bring transparency and speed to procedures that are traditionally cumbersome and expensive, such as cross-border money transactions.
Smart contracts are another key feature of blockchain technology. These are code-based contracts that automatically run when certain criteria are met. These, according to proponents, are critical in sectors like trade finance.
Yifan He, CEO of Red Date Technology, told CNBC, “We think blockchain technology is so powerful it will change the entire internet and almost all the entire IT system architecture,”
One of the initial members of China’s Blockchain-based Service Network is Red Date Technology.
Paul Triolo, who is the technology policy lead at consulting firm Albright Stonebridge, expressed to CNBC that, “Blockchain technology in general is very important for China, as government officials see it as a low barrier to entry technology sector, and want Chinese companies to push the envelope on using blockchain applications to solve real world problems,”
BSN’s solution is geared for businesses that run cloud computing infrastructure, in particular. It could be a huge public cloud provider such as Amazon or Microsoft, or a company with its own private cloud or intranet.
BSN bills itself as a “one-stop shop” for deploying blockchain applications on the cloud, which could be costly and time-consuming otherwise.
Another selling point for the Chinese company is that it is attempting to tackle a challenging challenge in the industry: interoperability, or the ability of multiple blockchains to communicate with one another. If two banks, for example, had applications built on distinct blockchain platforms, they might not be able to collaborate. However, because BSN links disparate blockchains, apps built on its infrastructure would be compatible.
Companies that wish to deploy many blockchain apps in their business can do so using BSN’s solution instead of installing a bunch of new servers to construct a blockchain product. The concept is that a company or government can use BSN’s platform to quickly and cheaply create blockchain applications.
According to Red Date’s He, demand is now minimal, but he is optimistic about the product’s long-term potential.
“I believe in 10 years all clouds will have a standard blockchain environment to handle all blockchain-related applications,” the CEO said.
However, one important aspect of BSN is that it does not create its own blockchain.
BSN’s platform is devoid of any cryptocurrency. This is because China has effectively prohibited and rendered illegal cryptocurrency-related operations.
Governments and large-scale enterprises do not want or need a cryptocurrency tied to their infrastructure, according to Jehan Chu, managing partner of Hong Kong-based Kenetic, a venture capital firm and investor in Red Date Technology.
“This is where non-crypto use case comes in and BSN offers a compelling infrastructure,” Chu said.
Large corporations who do not want to be exposed to the dangerous and unpredictable nature of digital currency may find non-crypto blockchains interesting.
Start-up One of the founding firms of BSN is Red Date Technology, which is based in Hong Kong.
However, the initiative is backed by Chinese government-linked organizations. This includes China’s strong National Development and Reform Commission’s State Information Center (SIC) (NDRC). The initiative is also backed by China Mobile, a state-owned telecommunications business.