When Blockchain Is Not Just Blockchain…
By Michael Tan on ALTCOIN MAGAZINE
Blockchain is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”
So that’s blockchain for you. A distributed ledger that is a growing list of records (blocks) hashed with cryptography technology. Sounds simple?
Well sort of… but in some instances, blockchain is more than just what it is, blockchain…
On October 24, 2019, Xi Jinping, President of the People’s Republic of China and General Secretary of the Communist Party of China, said the country needs to “seize the opportunity” afforded by blockchain technology.
Speaking as part of the 18th collective study of the Political Bureau of the Central Committee on Thursday in Beijing, President Xi said blockchain technology has a wide array of applications within China, listing topics ranging from financing businesses to mass transit and poverty alleviation.
“Our country has a firm foundation in the blockchain domain, we need to expedite the promotion of blockchain technology and the development of industry innovation, to progressively drive synergistic development of blockchain and market economy.”
So, blockchain is now more than just technology in China, it is now a national strategy…
In his speech, President Xi stressed the need to strengthen the guidance and regulation of blockchain technology, strengthen the research and analysis of blockchain security risks, closely track development trends, and actively explore development laws. He also streamlined 4 “core areas” to indicate the direction of how blockchain technology can bring substantial changes to social development. So let’s dive in deeper and take a look at what those 4 “core areas” or blockchain applications are…
Core #1:
“To explore “blockchain +” usage in people’s daily lives and actively promote the application of blockchain in education, employment, retirement, poverty alleviation, healthcare, anti-counterfeit, food safety, public welfare, social assistance, etc, thereby providing citizens with smarter, more convenient and higher quality public services.
Core #2:
“To promote a new hybrid model of blockchain underlying technologies and smart city development, and explore the application in data information infrastructure, smart traffic, energy resources, etc, resulting in smarter and automated city management and higher precision levels.”
Core #3:
“To utilize blockchain technology in the promotion of city-specific usage and information exchanges like data, finance, talent, credit scoring, etc, leading to large scale interconnectivity and guarantee the effective flow of manufacturing component information within the specific boundaries.”
Core #4:
“To explore blockchain data sharing models, and realize the maintenance and use of inter-department and inter-region government data, and provide collaborative assistance and “one-stop service” to businesses and achieving better quality governmental services.”
Ever since the birth of blockchain in 2008, the biggest and most popular application is the use case of cryptographic tokens (or cryptocurrency), of which Bitcoin is the most famous and representative example. Bitcoin uses the underlying blockchain technology to create and distribute the crypto token. Over the last few years, several companies have come out and started to create and distribute their own versions of crypto tokens for use in their own ecosystem. It is from these crypto tokens that people started to get acquainted with blockchain technology.
In certain aspects, the over flooding of these crypto tokens (or “coins” to most people) into the market has somewhat tainted the blockchain technology due to scams in the coin markets where countless people have been burnt and swindled of large sums of money. These scams have caused irreversible impact to the reputation and public perception of blockchain technology.
However, we should not associate the blockchain technology solely with cryptocurrencies. Blockchain does not equate to Bitcoin or any cryptocurrency. For the matter, blockchain is as real as anything out there, in comparison with Bitcoin and other cryptocurrencies. During the cryptocurrency bear market the last year or so, people have started to invest more into the underlying blockchain technology and build applications that utilize the technological advantages that blockchain bring…
The most significant advantage of blockchain’s distributed ledger is reduced operational costs. “Cost can be taken out of existing processes by removing intermediaries or the administrative effort of record keeping and transaction reconciliation,” reported McKinsey & Co. in a June 2018 article.
By eliminating the middleman, or data gatekeeper, blockchain allows companies to quickly and easily trace products and transactions all the way back to their roots. That time savings also results in considerable cost savings. Additionally, this streamlined efficiency provides transparency, reliability, and authenticity. And let’s not forget about security. Because data is shared on multiple systems in multiple servers — and validated before it is recorded — it’s more secure. Each data block is encrypted and linked to the one before it.
According to McKinsey,
“a company’s strategic approach to blockchain will be fundamentally defined by the following two market factors, which are those they can least affect: market dominance — the ability of a player to influence the key parties of a use case; and standardisation and regulatory barriers — the requirement for regulatory approvals or coordination on standards.”
In this respect, the Central Government of China is well placed to impact the blockchain market and drive or influence the implementation of blockchain within its geographic boundaries. The market dominance and standardization due to the sheer size of the Chinese market is definitely a game-changer. Adoption within cities can be further rolled out to province and national levels with the support of the Chinese government and in turn, can create the next “Baidu” or “Alibaba” or “Tencent” that will change the world.
Facebook’s plans to launch its very own cryptocurrency was met with heavy opposition last week, as CEO Mark Zuckerberg’s Libra proposal to Congress was hijacked into a hearing of the company’s past mishandling. Without a clear structure for regulation, there are concerns that Zuckerberg’s new Libra project could undermine the US dollar, as well as contain loopholes for criminals to exploit. Seven high-profile partners in the Facebook-led consortium have quit in dramatic fashion in recent weeks, including PayPal, eBay, Visa, and Mastercard, as concerns mount.
Facebook unveiled its Libra cryptocurrency in June, aiming to peg it to a basket of currencies backed by reserves, subject to regulatory approval.
“While we debate these issues, the rest of the world isn’t waiting,” Facebook CEO Mark Zuckerberg said to US Congress in a hearing last week.
“China is moving quickly to launch similar ideas in the coming months.”
The time has never been better for another huge innovation to change our lives, again… and blockchain is certainly the next big thing.
So blockchain is more than just blockchain, it’s a huge tech revolution and game-changer. And China is leading the way, positioning blockchain as a national strategy, and leading the change in how informational data is stored and used in our lives…
Michael Tan is the Founder of Transit Protocol and has extensive experience in the consulting and investment industries in APAC.
Transit Protocol is transforming mass transit to provide urban commuters with a seamless commuting experience every day, bringing every mode of transport together into one single app that integrates transport options from different providers (such as buses and train), and handling the full experience from journey planning to payments and dynamic journey adjustments.
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