Overview of Blockchain in China

Long before the crypto-boom in 2017, China was the biggest cryptocurrency market as well as Bitcoin miner. In late 2016 Chinese traders accounted for 90% of the global volume against Bitcoin. Understandably there were concerns about the amount of under informed investors funneling money out of the country to overseas ICOs.

In September 2017, a notice titled “Notice on Preventing Financial Risk of Issued Tokens” amidst the world-wide Initial Coin Offerings (ICOs) boom. The government banned Chinese ICOs. They forced ongoing ICOs to refund investors while upcoming ICOs had to relocate overseas to circumvent the ban. Many Chinese exchanges such as BTCC and OKCoin were forced to close their local office and relocate to cryptocurrency-friendly countries like Singapore and Denmark. Furthermore the thriving crypto-mining industry was more or less wiped out over night.

It is important to clarify that the Chinese government are hostile to cryptocurrencies but open to blockchain. The government has a clear definition of the difference between cryptocurrencies and blockchain. The Chinese government takes a proactive role in promoting blockchain technology. A quick search into some of the blockchain initiatives reveals that the Chinese government is actively encouraging the advancement and adoption of blockchain technology within the nation.

Focus Project 1 NEO

Now known as NEO. the project started life as AntShares. It is, relatively speaking, a gnarled veteran of the crypto world. NEO is a next generation smart economy platform. Neo was developed by Shanghai-based blockchain R&D company “OnChain”. CEO Da Hongfei and CTO Erik Zhang founded OnChain. Research on Neo started around 2014. KPMG listed Onchain in the Top 50 Fintech Company in China in 2016.

Twitter trolls call NEO the ‘Chinese Ethereum’ but there are some fundamental differences worth exploring.

The NEO system includes:

– Delegated Byzantine Fault Tolerance (DBFT) algorithm — This is a consensus mechanism (instead of the traditional proof of work/stake) that allows the system to resist the Byzantine Generals problem and maintains consensus even if some nodes bare malicious intentions

– NeoX — This system will create the ability to execute and operate across various Blockchains

– NEO Contract — Is the mechanism for creating smart contracts seamlessly in scalable, high performance environments that integrates pre-existing codebases (e.g. C#, VB.Net, F#, Java, Kotlin)

– NeoFS — This is a service which allows decentralized storage (like a peer to peer Dropbox)

– NeoQ — A lattice-based cryptographic mechanism creates problems that cannot be solved by quantum computers and ensuring being quantum-proof

Earlier this year the Chinese Ministry of Industry and Information Technology assessed the strengths of the worlds leading blockchain projects. The initial round of assessment included 28 blockchain projects.The projects were judged on a range of criteria ranging from infrastructure and applicability through to creativity. NEO was named in the top 5 projects, the only Chinese project to appear in the top 5.

Focus Project 2 QTUM

QTUM (pronounced “quantum”) is a Singapore-based blockchain technology that bridges Ethereum’s smart contracts on top of Bitcoin’s stable blockchain while using proof of stake for verification. Sometimes the simplest ideas are best. QTUM combines the best features of the two biggest blockchain projects in the world. Your opinion on QTUM will probably rest on your view of Bitcoin’s blockchain stability and Ethereum’s smart contracts. The underlying goal is making smart contracts easier and more secure. While also offering interoperability with leading cryptocurrencies such as Bitcoin and Ethereum.

Another key feature of QTUM’s smart contract solution is implementing proof of stake (PoS) in place of proof of work (PoW) as currently used on the Bitcoin and Ethereum blockchains. The implementation makes QTUM the only blockchain where proof of stake powers smart contracts.

Proof of stake for smart contracts are really interesting. Blockchain offers many efficiency upgrades for business users. The inefficiency of proof of work mining undermines the benefits brought about by the efficiency increases. There is an active environmental impact concern around mining too.

QTUM Status & Partners

QTUM’s blockchain is live and at time of writing it has 6298 global nodes. 3847 of these are in China, significantly more than 50%. China clearly has a lot of influence with QTUM project. It has quite a number of deployed dApps listed. You can check these out here

The Qtum Foundation has announced a collaborative venture with fellow Singapore-based SpaceChain Foundation to enable the launch of a standardized CubeSat. This will most significantly enable Qtum wallet holders to employ Qtum’s blockchain technology on the UK-developed Raspberry Pi device.

China & Singapore are often foes but not when it comes to technology. This announcement was notable due to China’s clampdown on cryptocurrencies in the region. China has a political interest in this venture and therefore considers it’s future success to be a Chinese success.