China vs. USA: The Great Battle for Blockchain

The technology to likely have the most significant impact on the next few decades is here. It’s not social media or even artificial intelligence, it’s the underlying technologies in all cryptocurrencies such as Bitcoin, and it’s called Blockchain. Blockchain is the next generation of the internet as we know it. It’s a technology that has many applications and holds vast promise for every business, society, and the individual person watching this video . Available data indicate that China is leading the pack when it comes to blockchain technology innovations. As of November 2018, China was the country with the most blockchain projects, with the number standing at 263. Additional data from Blockdata reveals that the country accounts for 25% of all blockchain projects. Similarly, as of December last year, China had 615 registered blockchain firms. Half of these organizations are creating blockchain solutions for the financial sector. Apart from the number of projects and registered companies, China holds the leading position in terms of the number of blockchain patent applications. The closest competitor is the US, which has 28 patents short of China’s number. What is evident from this information is that the state of blockchain In China is advanced more than anywhere else in the world. The cryptocurrency was the primary tool for that. The average person, even in the west, is still not the most familiar with blockchain technology. This being said, I don’t think China pales in comparison to any other country. If anything, blockchain and bitcoin may be more popular in China. China has a significant problem with cash leaving the country by corrupt officials and business people. 80% of the mining power is located in China because electricity is so cheap. Additionally, one of the most popular cryptocurrencies right now, NEO, is based in China. I don’t think there is any shortage of popularity in China in blockchain technology. However, just like the average person of the west, I believe there is a lot more room for growth. Welcome to The Atlantis Report. The president of China, Xi Jinping, went public on Friday, October 24th, declaring his long-term vision of the country’s full adoption of blockchain technology. Consequently, the markets followed with a tremendous spike in cryptocurrency prices, especially those that are developed in Asia. Tron was the winner with an incredible 25% climb, an increase that propelled the currency among the top 10 performers in the world. With a population expressed in billions, China might significantly affect the entire crypto space and become a leader in the sector. Whoever carves out their spot in the Chinese blockchain and crypto market at an early stage could reap handsome rewards in the long run. Only a day after the president’s announcement, a cryptography law has been passed by the Standing Committee of the 13th National People’s Congress. But what does this imply? Well, in layman’s terms, it practically means there will be a standardized framework that will be applied to all businesses that have some sort of cryptography model implemented in their system. As it turned out, this move was compulsory because the Chinese were already working on their national cryptocurrency. Even though there is no roadmap for its development insight, being familiar with their resourcefulness and knowing their enterprising attributes, it would come as no surprise if they found themselves all over the headlines as early as next year. If we were to compare the current state of affairs with those dating back to 2017, All this might come as a shock to some of you. 2017 was the year China took a firm stand against the entire crypto initiative, first prohibiting ICOs in the country and then banning crypto exchanges. There was even speculation that miners were going to be forced into exile, seeking a new territory to operate from. Fast forward, and we see a whole different scenario being played out. Believe it or not, but now, the Republic of China is taking anti-blockchain sentiment passionately and will be actively removing any comment posted online, claiming that blockchain is some sort of hoax. Mr. Xi Jinping is obviously serious about his intentions, and his statement only confirms that: “We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.” What is more, members of the nation’s Communications Industry Association have even proposed celebrating October 24th as a national day. There’s no doubt, and if we were to witness countries following China’s example, we might as well expect to see a boom of the crypto industry. In that case, it would only be a matter of time before the USA decides to get fully on board and start competing. One might argue that this would be a good time for North America to take Zuckerberg’s word of advice more seriously. Regardless of the hype spurred by the Chinese president, there is little to no mention of how cryptocurrencies will be treated in general. The fact that he is enthusiastic and wants to embrace modernization doesn’t clearly imply that he supports crypto. Recently in China, two blockchain platforms Ontology and NEO will together build a blockchain-based global cross-chain platform. The firms intend to develop an interoperable protocol for the next-generation internet. It will also reinforce the strength of both companies. To achieve interoperability, NEO will focus on making protocols and supporting components for various digital assets. On the other side, Ontology will look after the development of its decentralized identity framework. The Government of China released ‘Guiding Opinions on Rural Service Revitalization of Financial Services,’ to encourage the mass adoption of blockchain in the agricultural financial sector. The country has also opened its First-Ever Blockchain Notary office in Beijing. Its services began on April 19th. According to the Notary Officer Wang Mingliang, implementing blockchain will enhance the legal significance of notarized papers. It will also minimize the issues of forgery of legal documents. Information will be more secure, so it won’t fall in miscreant’s hands. These were a few examples, and there are many other blockchain-based developments going across the country. First of all, I will clarify the term blockchain technology because often people have an insufficient understanding of what it really is. Blockchain has existed for decades - it is a very very old technology. The idea is to split your information stream into blocks, with each new block referring to the previous (last in the chain) block. Thus each added block indirectly (transitively) relates to all neighborhoods. Often this is efficiently implemented via a cryptographic hash function. That is blockchain. The real innovation and the rise of interest we see today are in the blockchain on a global scale with consensus between the majority of the participants. Consensus on what the next block added in the chain will be. This is what is really hard - agreeing on the next block, accepting its validity, and moving forward. This needs to be approved by all participants globally. China is one of the examples of government blockchain projects. In reality, the government of China is embracing the blockchain for government schemes for a long time now. Furthermore, the country is hoping to become the blockchain powerhouse that would utilize both private and public blockchains. One of the examples includes the collaboration of the city of Changzhou and Alibaba for securing healthcare information on the blockchain for government platform. Additionally, the China Federation of Logistics and Purchasing is also working on blockchain applications for the government with Tencent for the logistics platform. This leaves us with centralized blockchains (consensus is concentrated in 1 or few participants) and decentralized blockchains (agreement is global and deciding power is distributed equally among participants). Knowing China’s political situation and knowing China’s internet restriction history. Ask yourself - which kind of blockchain technology is China interested in? Correct - Centralized! We can already see China using blockchain in many different areas. One very recent is food traceability using VeChain’s technology. The government is actively using and testing blockchain. But the centralized blockchain, which is basically a fancy word for database organized in a block fashion. To see how bad this is, imagine Bitcoin is designed by China’s government - its all working as now, except China’s Communist Party can take all your bitcoins at any given time, it can double spend, it can stop producing blocks, it can block individual participants by not validating/including their transactions. Summarized - I think centralized blockchains have a bright future in China, as for decentralized technology - we can anticipate some resistance and restrictions from the government in the coming years. People’s awareness and interest: People in China may be a bit more aware of blockchain technology or at least show more attention than the rest of the world. There, however, is no real difference, in my opinion. Furthermore, interest does not mean understanding and adoption. There is almost no difference between the knowledge of the average Chinese and western-world person when it comes to blockchain technology. I believe it is still too early for the average person to care much about the technology and its fundamentals. Last thought - the main idea of the global consensus is that it is universal. Maybe it is wrong to only look at China. If a technology/coin is prevalent only in China, I would be worried about its future. The whole idea is that we connect the world and achieve a border-less economy and transactions. Consulting firm Deloitte has released a recent report that shows that almost 73% of the Chinese enterprises believe blockchain to be one of the top five strategic priorities of their organizations. As per the report, China is making use of blockchain technology more than any other country. Though cryptocurrency exchanges were banned in late 2017, China has heavily invested in the research and development of blockchain applications such as supply chain, healthcare, public services, and financial services. More than half of the companies in China are working towards adopting blockchain for the finance sector. Internet giants such as Alibaba, Tencent, and Baidu have launched their own blockchain initiatives. Alibaba has been using blockchain in food, healthcare, and public welfare since 2016. Tencent made an announcement about the first electronic blockchain invoice in China. China’s innovations are expanding across the globe. International blockchain companies are also relying on China for blockchain opportunities. Digital Asset in New York is the best example. It is a distributed ledger technology provider working to develop a blockchain-powered program to help international investors in trading Chinese mainland shares. All these happenings prove that blockchain technology is trendy in China. So What do you think, is China going to become blockchain’s leader and proponent? More importantly, how will their actions further affect the crypto market?













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