China pushes for blockchain domination but will the world trust it? | Voice of America

Despite Washington’s resistance to China’s ambition to lead the world in building emerging technologies such as 5G, Beijing will launch a global effort next month to develop blockchain, a distributed database that experts say , could reshape businesses around the world.

Starting August 10, China will roll out the international version of its blockchain infrastructure, the Blockchain Service Network, or BSN. The network gives developers tools and access to blockchain technology through BSN data centers overseas so they can build apps for businesses and smart cities.

As BSN takes hold in countries around the world, it will become the only global infrastructure network innovated by China, whose gateway access is controlled by China, the BSN Alliance said. in a white paper last year.

Blockchain is a kind of distributed database with reliable record keeping that makes possible cryptocurrencies like bitcoin as well as new types of products like digital ID. Technology has the potential to create decentralized and more transparent digital networks.

U.S. Representative Bill Foster, congressman with a doctorate in physics and leader of a group of U.S. lawmakers studying technology, called it a disruptive technology that will change the way we do business in almost every way. sectors.

Blockchain technology can create more transparent record keeping with open source code to create reliable databases. But the Chinese system is a more centralized alternative overseen by BSN Alliance, a group of state-owned companies that designs its digital architecture and maintains control of the databases.

China is hoping that this managed network, which it says offers cheaper costs and better interoperability compared to other competitors, will become the preferred option for businesses and governments trying to use the technology.

Backed by the Chinese government, BSN is already the largest blockchain ecosystem in the world that is expected to serve as a backbone for massive interconnectivity both in China and around the world. It already has more than 100 city nodes, or physical devices operating on the network, stationed on six continents. The network hopes to deploy up to 200 more by the end of this year.

A Chinese national priority

Much like the country’s aggressive international expansion into other major emerging technologies such as 5G and artificial intelligence, China declared blockchain as a national technology priority in 2016. It was mentioned twice in the 13th Chinese State Council’s five-year economic plan released that year.

Chinese President Xi Jinping highlighted blockchain as an important breakthrough and vowed that China would seize the opportunity during his October speech at a so-called “collective study” session held by the Committee’s Political Bureau. Central Party of the Chinese Communist Party (CCP).

According to Xi, China will occupy the leading position … occupy the heights of innovation and achieve new industrial advantages. The meeting had only one agenda on the table: the current state and trends of blockchain technology.

“China is the world’s most active major national government in blockchain development. China is one of the few countries to see blockchain as a strategic emerging technology, alongside areas such as artificial intelligence and 5G wireless, ”Kevin Werbach, professor at the Wharton School, University of Pennsylvania, said declared to VOA.

China now has more than 700 blockchain projects registered since last year with the country’s cyberspace administration. According to a white paper on China’s blockchain patent application released last Friday, China owns more blockchain patents than any other country in the world. Eric Jing, chairman of Chinese tech giant Alibaba, Ant Financial Services, told reporters last week that users of his blockchain service download 100 million digital assets per day, mostly transaction records.

A blockchain with Chinese characteristics

BSN was born last spring as the world struggled to cope with the catastrophic social, economic and political challenges caused by the COVID-19 pandemic. As part of Beijing’s grand strategy to lead the digital transformation of the global economy, the plan is to make the network so efficient and low-cost that it becomes the dominant provider of blockchain cloud services.

“The concerns are that more developers and customers will shift to Chinese platforms and that China will push technical standards to reflect its political positions,” said Werbach, who was previously a consultant for the CIA on a blockchain training program.

Werbach said that is why his core element of the Chinese blockchain system is different from open models that emphasize decentralization.

The geopolitical implications of the technology depend on who designs and implements the technologies, argued Werbach, who has written extensively on emerging technologies such as blockchain. “China is focusing more on authorized blockchains for enterprise applications and on Chinese platforms that incorporate the monitoring and compliance capabilities required by the Chinese government,” Werbach said in an email to VOA.

Two days after Xis’ speech last year, a blockchain initiative announced by the CCP allowed party members to pledge their loyalty to Xi, steadfastly registering him on the blockchain ledger.

As Chinese leaders urge country’s engineers to move forward with technology, overseas companies are sounding alarm bells that the United States is giving up its role as a leading internet innovator .

A recent white paper co-authored by Amazon Web Services, IBM, Deloitte and others noted that the U.S. military is lagging behind China and Russia in a blockchain arms race.

“While China and Russia have invested millions of dollars in research and development (R&D) in technology, policymakers in our country are still trying to figure out what technology is,” the document released in May said. latest.

A report released last year by the Wharton School at the University of Pennsylvania also cautioned against the dominance of blockchain in China: “In all respects, China is the world leader in the use and development of blockchain technology.

“We are way behind China when it comes to blockchain technology,” said Chris Larsen, executive chairman of Ripple Labs Inc, a leading blockchain company based in the United States. The Wall Street Journal recently.

Werbach said that if US policymakers and businesses do not compete for the blockchain industry, “blockchain with Chinese characteristics will become more the norm.”

On the other hand, some analysts remain skeptical that China is the world leader in technology. Larry Wortzel, a commissioner of the US-China Economic and Security Review Commission in the US Congress, pointed out in an email to VOA that IBM and other US companies have the technology and are using it. “I don’t think the United States is losing a blockchain race,” Dr Wortzel said.

In the list of the 50 best blockchain companies compiled by Forbes last year, Amazon was ranked number one with Ant Financial of China’s Alibaba second. Among the top 5 companies, two are American, two Chinese and one from England.

Martin Chorzempa, a researcher at the Peterson Institute for International Economics, told VOA that most of the money paid by China would be wasted. “As we can see from the recent global push against Huawei, especially in Australia and Europe, I don’t think it’s plausible that the world is adopting Chinese blockchain infrastructure.”