Blockchain: A tale of two halves
By Nish Kotecha, Chair & Co-Founder, Finboot
China’s National Blockchain Research Centre, launched on 10 May in Beijing, is a game changer. With the objective to train some 500,000 professionals, it is seemingly at odds with the Country’s ban on cryptocurrencies.
The National Blockchain Centre, backed by the Chinese Ministry of Science and Technology plans to focus its research on the industrialisation of blockchain technology. This follows President Xi’s speech in 2019, where he declared: “We must take the blockchain as an important breakthrough for independent innovation of core technologies”.
He added: “[We must] clarify the main direction, increase investment, focus on a number of key core technologies and accelerate the development of blockchain technology and industrial innovation.”
It is common for the real value of new technologies to emerge over time. This is certainly the case with blockchain where cryptocurrencies such as Bitcoin have become the headline and are often mistaken for the technology itself. Blockchain is far too often used synonymously with crypto and fintech. Crypto is just one application of the technology. Simply put, without Blockchain there can be no Web 3.0 – the future of the internet and no crypto either of course.
China is embedding the fabric of Blockchain into its economy. Chang’An Chain, also known as ChainMaker, is a homegrown Chinese public Blockchain. Since its launch in early 2021 it claims to have “attracted 50 partners, including 27 state-owned companies, such as State Grid Corporation of China, China Petroleum & Chemical Corp, and China Telecom, to join its ecosystem.” Does that mean we will soon see the Chang’An kitemark to identify those whose data can be verified in the blockchain…?
An interesting concept? China is not the first to venture down this road. In Spain, the Alastria Consortium was established in 2017 as a private endeavour to be the ‘first regulated blockchain ecosystem’. There are also networks that are industry specific such as the Energy Web Foundation who seek to “accelerate the energy transition by developing and deploying open-source Web3 technologies.”
Whether it’s a state promoted national level database or a vertical approach focussed on a sector or theme…the idea of a central database that acts as a single source of truth for enterprises and their customers and regulators is closer than we think.
There are already many standards, checklists, auditors and experts who are setting standards for every industry. Consider, the International Organisation for Standardisation (ISO) set up in 1947 to develop and publish international standards. Once approved a company can display the ISO kitemark. The current model is not immune to fraud. Should a customer who buys an ISO-certified product wants to check it’s validity, they need to go back to ISO member in their country (there is only one member per country) and cross-check.
Imagine if each certificate was stored on an ISO country blockchain where verification or cancellation could be administered digitally. This could drive a safer more secure environment for trade knowing that the certification is real time and the certificates and audits supporting them are available in an immutable, transparent database.
Whatever the strategy, a direction is required. The UK is seeing regional initiatives such as the Blockchain Demonstrator Challenge Fund, backed by the Welsh Government. Seeking to promote a broad blockchain ecosystem by funding the “gap between desire to innovate and the ability for organisations to prioritise research and development of blockchain technology,” said Avril Lewis MBE, Managing Director of Blockchain Connected.
“This Blockchain Demonstrator Challenge Fund, supported by the Welsh Government, aims to fund innovative prototypes to demonstrate how blockchain can integrate with real-world data and systems to be used for economic, societal, and environmental benefit in Wales”, added Avril.
This has been followed by the announcement that a16z, arguably the most influential blockchain and crypto venture capitalist, is setting up in London. This is its first overseas office ostensibly because of the anti-crypto approach of the US.
The Welsh Government on the other hand, working with the private sector, has created a business environment and funding ecosystem for tech firms, including cutting edge blockchain firms, like Finboot and A16z, to thrive. It’s heartening to see in former and current capital-intensive industrial areas like South Wales.
If China is already investing in the technology to automate supply chain data, then we are behind the curve particularly if regulation has flagged the requirement for Digital Product Passports. This is only the beginning.
Blockchain beyond crypto is fundamental to driving trade. Global Britain’s aim is to be the centre of global trade. This requires putting technology and in particular blockchain technology at the centre of our economy to confirm and validate our status as a trusted trade partner.