China blockchain explainer: What is BSN?
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China considers blockchain technology strategic. China’s efforts to increase its sector capabilities include the Blockchain-based Service Network (or BSN).
Yuichiro Chino | Moment | Getty Images
Chinese President Xi JinpingHis country should “seize all the potentials” of blockchain technology, he stated.
The Chinese leader spoke out in 2019 to call blockchain an “important breakthrough” in the independent development of core technology technologies. As a result of that speech, blockchain was elevated to a national priority for China, among other technologies — such as semiconductors — that the country is trying to boost its capabilities in.
China created a platform in China that facilitates the use of blockchain technology by companies, but it has not been widely publicized. This platform is called Blockchain-based Service Network.
These are the facts we have so far.
What is Blockchain?
Blockchain emerged as the technology that underlies cryptocurrency for the first time. bitcoin. This is a distributed ledger that tracks transactions made on the Bitcoin network.
It’s decentralized, and it is not controlled by any one entity. It is maintained instead by a group of people using specialized computers.
Many definitions have changed over the years about what a blockchain might look like. Distributed ledger technology might be used by governments or companies. This is largely dependent on the status of blockchain.
Blockchain technology, we believe, is so powerful that it can change almost everything about the internet.
Yifan He
Red Date Technology, CEO
Permissionless blockchains — also known as trustless or public blockchains — allow anyone to join and potentially make changes to the blockchain, so long as they are running a particular software or a device.
Permissioned blockchains, on the other hand, are typically private and allow only certain people to use them.
What is blockchain good for?
The technology’s advocates say it will bring transparency to slow or expensive processes like cross-border money transfers.
Smart contracts are another important feature of blockchain technology. Smart contracts are coded contracts that are executed automatically when certain conditions are satisfied. These are key areas, such as trade financing.
Yifan He, Red Date Technology CEO, stated to CNBC that “we think blockchain technology will be so powerful it will transform the whole internet and nearly all of the IT systems architecture.”
Red Date Technology was one of the founders of China’s Blockchain-based Service Network.
“Blockchain technology in general is very important for China, as government officials see it as a low barrier to entry technology sector, and want Chinese companies to push the envelope on using blockchain applications to solve real world problems,” Paul Triolo, the technology policy lead at consulting firm Albright Stonebridge, told CNBC.
What’s China’s BSN doing?
BSN’s product targets companies that are involved in cloud computing infrastructure. This could include a major public cloud provider like Amazon. AmazonOder MicrosoftOr, it might be a business that has its own intranet or cloud.
BSN describes itself as “One-Stop Shop” that helps you deploy blockchain applications on the cloud. It is an easy process, which can otherwise prove costly and time-consuming.
The Chinese firm’s other selling point is that it is trying to solve a difficult problem in the industry: interoperability — or making different blockchains work with each other. Two banks may have applications built on different blockchain platforms. They might not be compatible. However, applications created using BSN infrastructure could be interoperable because the company connects various blockchains.
BSN’s product allows companies who want to run multiple blockchain applications within their company to access it through the cloud vendor rather than having to install a lot of servers in order to create a new blockchain product. BSN’s platform allows businesses and governments to quickly deploy blockchain apps without having to incur high costs.
Red Date’s He believes that demand right now is very low. However, he remains optimistic for the product’s future.
According to the CEO, “I think in 10 years all cloud will have a standard Blockchain environment that can handle all of blockchain-related apps.”
However, one thing is certain about BSN: It doesn’t create its own blockchain.
BSN does not accept cryptocurrency. Because China has banned cryptocurrency, cryptocurrency-related activitiesThey were made illegal.
CNBC spoke with Jehan Chu, managing director of Kenetic in Hong Kong, which is a venture capital company and an investor in Red Date Technology. He said that large companies and governments don’t need or want a cryptocurrency to be attached to their infrastructure.
Chu stated, “This is the non-crypto usecase and BSN offer a compelling infrastructure.”
For large companies that do not want to be exposed by digital currencies’ volatile, risky nature, non-crypto Blockchains may appeal to them.
BSN: Who are the people behind it?
Red Date Technology is the founder of BSN. It is located in Hong Kong.
However, the project is supported by Chinese entities. The State Information Center (SIC), which is part of China’s strong National Development and Reform Commission, (NDRC), can be cited as an example.
China MobileA state-owned telecommunications firm, the Governing Board of Communications, supports the project.
Globalization is a challenge
BSN plans to expand internationally. Its links with the Chinese government may make this difficult.
BSN’s ambition is part of its appeal. Its ambition has also led to it being under scrutiny due to the Chinese government connections,” Triolo, Albright Stonebridge said.
He said that BSN was trying to seperate the BSN International and domestic parts. [trying]To distance yourself from Chinese government support.”
He, Red Date Technology’s CEO, is up for the challenge.
He said, “It is a huge, enormous challenge,” when he was asked how global he planned to be and his perception that he had been linked to China.
The international platform version will be free-source and open-source according to him. This allows anyone in the public domain access to the code, looking for potential backdoors.
While this is happening, global challenges could be created by the central nature of BSN’s blockchain initiatives.
CNBC’s Garrick Hileman told CNBC that there is “a fundamental incompatibility” between China’s declared ambition to support a national blockchain development ecosystem, and blockchain technology’s decentralized nature.
China will not be a leader in the strategically vital technology sector if it can’t find ways to accept blockchain’s disruptive power and lose of central control.
Red Date’s CEO admitted, however that crypto is not an option on the platform. He stated that “a lot people aren’t interested” in the noncrypto-related blockchain offerings.
China’s ambitious plans for Blockchain
Intense tech rivalry has been a feature of the United States for several years.
China is focusing on its “callings”. “frontier” technologiesThis includes quantum computing as well as semiconductors. Blockchain is yet another. area of importance.
In the context of the U.S.-China tech war, Chinese tech firms have placed great emphasis on global expansion. This is supported by Beijing.
Triolo explained that “the significance of the Blockchain Services Network” is the Chinese government’s attempt to encourage the creation of Blockchain ecosystems according to its own terms with provisions for regulation approaches in other jurisdictions.
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