🇨🇳China Endorses Cryptos? ⌚IOTA Updates — Cryptos for the Rest of Us
China Endorses Blockchain?
What’s the Story?
China’s President, Xi Jing Ping was speaking at a conference earlier this week when he mentioned that blockchain, along with other technologies, was a leading economic breakthrough.
Since entering the 21st century, global scientific and technological innovation has entered an unprecedented period of intensive activity. A new round of scientific and technological revolutions and industrial changes are reconstructing the global innovation map and reshaping the global economic structure.
The new generation of information technology represented by artificial intelligence, quantum information, mobile communication, internet of things, and blockchain accelerate the breakthrough in application and bred new life science fields represented by synthetic biology, gene editing, brain science, and regenerative medicine.
Isn’t Crypto Banned in China?
Yes. ICOs are banned and the trading of Bitcoin and other cryptocurrencies remains illegal.
But blockchain is one of the underlying technologies that enable cryptocurrencies.
It’s important to understand that blockchain and other distributed ledger technologies that are really just decentralised databases. The breakthrough innovation with blockchain is that it allows for data to be stored permanently in a ledger that isn’t owned by any single participant, but rather, operated via consensus. This eliminates the need for a middleman who extracts agency fees.
Typically an implementation of blockchain without cryptocurrencies will be a ‘permissioned’ or ‘private blockchain. This means that all participants are known and vetted to each other. A common use case is a group of banks transacting with each other. Each participant is known to the group, but no single bank holds the keys to the ledger.
Meanwhile, the breakthrough with cryptocurrencies is that they allow these systems to go public and allow any unvetted actor to join the system. An explicit monetisation of the distributed ledger protocols is key. This means that there is a direct economic incentive for participants to keep the system honest.
While there is plenty of speculation that China will lift the ban of cryptos, it seems unlikely, at least in the near term. Blockchain development is growing rapidly and it has plenty of applications within enterprise environments without a need for cryptos.
In particular, the government is unlikely to want a system where participants can’t be vetted as it opens up the door to anonymous transactions, and ultimately capital flight.
China still has strict capital controls and its currency is not free-float. This means that controlling how much currency crosses its borders is central to its monetary policy.
IOTA is a cryptocurrency that’s designed for Internet-of-Things (IoT) devices. IOTA enables feeless microtransactions and data transfer between IoT devices. IOTA is also running a Data Marketplace which allows the monetisation of IoT data.
IOTA runs on a ‘Tangle’, a Distributed Ledger Technology that’s an alternative to Blockchain. Unlike in blockchain, updates to the ledger are not propagated across the whole network before being confirmed, making it drastically quicker to confirm transaction.
The IOTA Foundation has done a good job securing early commitments from enterprises such as Bosch and Fujitsu.
IOTA Mobile Wallet
IOTA released a beta version of their mobile wallet, Trinity. The project was initially started by an individual before being picked up by the IOTA Foundation. Initial feedback has been good, with particular praise going to its design and that the software went through two security audits.
IOTA DNB Partnership
The IOTA Foundation signed a Memorandum of Understanding with DNB, Norway’s largest financial services group. The partnership sees DNB joining IOTA’s Data Marketplace. GDPR has been cited as a driving factor as IOTA has emphasised privacy and personal data management recently.
As Internet of Things (IoT) and Machine to Machine (M2M) communication and payment for microservices seem to escalate in the future, we think engaging in a Distributed Ledger based technology like IOTA gives us valuable experience and know-how on future revenue streams and business models. We are looking forward to dive into the IOTA space