China’s Digitization Endeavors Continue: National Blockchain Platform to Go Live in April

While our society is being taught a hard lesson about the benefits of digitization, governments and businesses scramble to put together all sorts of online solutions. Although, China may have had a head start in going digital with a national blockchain infrastructure expected to go live next month.

In this piece, we take a look at Blockchain Service Network, China’s national blockchain platform for businesses and individuals that is scheduled to launch this April.

Blockchain Service Network to Expect

First announced on October 15th, 2019, Blockchain Service Network (BSN) is a trans-regional public infrastructure network jointly launched by the Chinese National Information Center, a state-run telecom company China Mobile, China UnionPay, Red Date, and other institutions like banks and government groups. Huobi exchange is also involved with the initiative.

According to the announcement, the system is aimed at servicing smart cities and the digital economy, concepts made possible by the development of the Internet of Things, AI, and 5G. The creators expect the BSN to provide SMEs with a cheaper alternative to building their own systems from the ground up. The platform will serve as an environment for users’ custom applications.

There isn’t much concrete info available regretting the technical specifications of the BSN. According to an article on IEEE Spectrum, it is meant to be a permissioned network where only approved members are allowed. Such architecture will restrict unauthorized parties from browsing the transaction history, which is beneficial for typical business and is considered to be easier to scale. The word “public” in “trans-regional public infrastructure network” may be confusing, but it apparently has nothing to do the blockchain architecture.

Reportedly, the BSN is built upon the BCOS open-source protocol derived from Ethereum code. The protocol itself was developed by the Financial Blockchain Shenzhen Consortium (FISCO) which includes large corporations like Huawei, ZTE, Tencent, and WeBank. BCOS boasts Byzantine fault tolerance and supports Zero-Knowledge Proofs. There are also “observatory nodes” for the authorities to monitor the network.

Several pilot projects have been announced for the BSN. In late 2019, the BSN Development Alliance, a group of founding member-institutions running the initiative, has signed a strategic cooperation agreement with the local government of Hangzhou, the capital of Zhejiang Province in East China. The agreement was about exploring the use cases for blockchain in governance and smart city infrastructure. The list of the planned applications included a digital identity system, road health monitoring, a credit rating ledger for SMEs, and a project overseeing hotel disinfection with IoT devices.

Since the announcement, the BSN was going through development and beta-testing. The system is expected to go live in April 2020 and have a hundred city nodes across China and worldwide.

BSN as Part of China’s Big Blockchain Plans

Despite the harsh treatment of cryptocurrencies and crypto-trading, China appears to be among the few pioneers in terms of using blockchain for the needs of the government. Notably, shortly after the BSN reveal, president Xi Jinping declared blockchain technology adoption a national priority.

Among other things, over the last year, the country adopted blockchain to monitor international border crossings, deal with invoices to fight tax fraud, and facilitate loans to SME’s,

The BSN should make it easier for both the government and businesses to access the benefits of blockchain technology. It is also likely to form the basis for a digital currency that would compete with payments through WeChat and Alipay. Given that China was going to ramp up its efforts to launch a digital currency because of the virus outbreak, the BNS may be quite useful to have.

Still, the digital yuan, even powered by a blockchain network, will hardly be similar to Bitcoin and other popular cryptocurrencies at least in terms of government control.

The developers of the BSN hope that the platform will eventually set a global standard. Yet, since the Chinese government will be able to monitor all transactions within the network, it isn’t an entirely alluring perspective for potential foreign users.

Follow us on Twitter and Facebook and join our Telegram channel to know what’s up with crypto and why it’s important.