Inside China’s Plan to Power Global Blockchain Adoption – CoinDesk

The project also reminds Cooper of “Made in China 2025,” a nationwide initiative to spearhead innovation in areas such as robotics and artificial intelligence, he said. The subtext is a desire to overcome China’s image as a copycat, reverse-engineering innovations from elsewhere.

In the October announcement of the BSN’s internal testing, the Chinese government envisioned a variety of use cases. These included smart city applications, which use sensors connected to the internet to collect data and glean insights for managing public resources; in particular, the alliance mentioned energy conservation. It also listed identity registration and data storage as opportunities for BSN.  

“We have already deployed some international nodes in other countries, such as the U.S, Japan, Australia, Brazil, South Africa, Singapore and France,” Leon Li, CEO of crypto exchange operator Huobi Group, said through a spokesperson. His Singapore-based company’s blockchain development arm is a founding member of BSN. 

The initiative – which is rolling out next week after a six-month internal test – is led by the State Information Center, a government agency under the National Development and Reform Commission, as well as state-owned telecommunication giants including China Telecom, China Unicom and payments firm China Union Pay. 

But the BSN itself is not a blockchain protocol. Rather, it’s a centralized platform that has done the heavy lifting for developers so they can plug in and code, choosing from several enterprise blockchain protocols or public chains. The goal is to reduce their operational costs, improve flexibility and provide better regulatory oversight, according to the white paper.

“Designed to unify the fragmented market, BSN is a cross-cloud, cross-portal and cross-framework public network that enables developers to easily and affordably develop, deploy, operate and maintain permissioned … and permissionless blockchain applications and nodes,” Leon Li, CEO of crypto exchange operator Huobi Group, said through a spokesperson. His Singapore-based company’s blockchain development arm is a founding member of BSN.  

During the beta testing period that began on Oct. 15 of last year and ends Wednesday, more than 2,000 participants signed up. A third of them are enterprises while the rest are individual developers, Li said.  

The low price will encourage a vast number of small and medium-sized enterprises and individuals. including students. to use the BSN to invent and innovate, thereby accelerating the rapid development and widespread use of blockchain technology, Li said. 

The second part is the configuration and modification of several enterprise blockchain protocols to fit uniform standards, in areas such as cryptography and software development kits (SDKs), so these systems can work in conjunction with each other. 

Once authorized by the alliance and given a standardized SDK, developers will be able to choose a protocol and rent computing resources in locations they need to deploy a blockchain application. Because the permissioned protocols are adapted to support interoperability, developers will have more flexibility to switch from one to the other, the whitepaper said.

Unlike the public blockchains underpinning bitcoin and other cryptocurrencies, which anyone with an internet connection can download and run, permissioned systems can only be used by approved parties.

But the latest version of the white paper said it’s also including other permissioned blockchain frameworks. More surprisingly, it specifies the BSN will incorporate two public protocols: Ethereum and EOS. 

Even public chains with legitimate technology pose risks, as the Chinese government sees it. If widely adopted as currency, digital tokens could undermine the Chinese central bank’s monetary sovereignty, for instance.   

The logic behind the government’s (limited) involvement with public chains is that China needs to understand the technology, and it could have its own Ethereum-like networks if such systems succeed, said Omer Ozden, chairman of RockTree Capital.

Such networks underpin major cryptocurrency assets that are seen by the authorities as a source of speculation and systemic risk. But they arguably inspired the country’s pursuit of a central bank digital currency (CBDC).

“China is doing what they say they would do,” Yeung said.  “Their virtual currency may be rolled out within a year. And they are doing it, at least the infrastructure piece, even with everyone locked up during COVID time for the past 90 days.” 

A recent article in engineering publication IEEE Spectrum suggested BSN’s global partners, such as overseas developers or data center providers, may balk since holding the BSN’s root key  – a unique passcode that’s generated to secure server interaction with a network – would allow the State Information Center to view transactions made on the platform.

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