China ramps up efforts to become a blockchain leader
The Chinese State Council has just issued the highest-level order to require local governments to accelerate the development of the blockchain technology. This is the first time the Chinese government has issued such a direction for the blockchain technology in a top government document.

By installing a tracker on the chicken's feet, consumers can directly retrace its origin and the feeding history of the chicken, and even know how many steps it has taken so far. Currently, such blockchain technology is used in more than 400 chicken farms.
 
From virtual to buoyant reality
 
Stemming from virtual currencies such as Bitcoin, the blockchain technology is also being utilized for the real economy. The real-life application of the blockchain technology is indeed very extensive. The greatest value of blockchain is in resolving the trust issue. Its openness, transparency, and traceability will be very helpful for many industries relying on trust-based business, especially in the financial sector where credibility is of great significance. With the application of blockchain in the financial sector, banks can reduce transfer fees and simplify lending processes. Other industries holding great promise for this technology include IT industry, artificial intelligence, industrial manufacturing, construction, and so on.
 
More and more players are venturing into this new territory. The four major state-owned Chinese banks made early forays into the blockchain technology and applied it to areas such as poverty alleviation, international trade, mortgage platforms and Xiongan New Area. Walmart, JD.com, and IBM recently created a blockchain alliance to control food quality.

They have developed a blockchain platform that can track the origin, transportation and expiration of foods. It is expected that this technology will prevent low-quality or fake food products from reaching the customers. China UnionPay cooperated with IBM to research "Interbank Credit Exchange System Using Blockchain Technology". Baidu and Circle have a strategic cooperation; Alibaba's Ant Financial will build a charity platform based on blockchain technology; traditional state-owned enterprises such as China Food and COFCO will cooperate with Taiyi Cloud to promote China's food chain; and the Copyright Office and the Copyright Exchange Center Alliance have jointly released the China copyright chain. Dianrong cooperated with Foxconn to develop a financial platform integrating blockchain with supply chain. Many other listed companies and large financial institutions have also launched their own blockchain development plans.
 
The White Paper on China's Blockchain Industry in 2018 released by the Ministry of Industry and Information Technology shows that China's blockchain industry is beginning to mature. As of the end of March 2018, the number of companies with blockchain as their main business in China has reached 456, ranging from the upstream hardware manufacturing, platform services and security services to the downstream technology application services, investment and financing, media, and human resources services that support the development of the blockchain industry, which forms a basically complete blockchain industry chain.
 
In addition, capital continues to flow in. In 2017, the amount of private equity financing in China's blockchain industry increased from $16 million to $76 million, an increase of 3.75 times. Although the amount is smaller than that of the US, the growth rate is significantly higher.
 
Thanks to continuous innovation of the blockchain technology and China's huge Internet consumer groups, blockchain applications in China are more diversified and quite vibrant. According to statistics from the World Intellectual Property Organization, more than half of the approximately 400 blockchain-related patent applications worldwide came from China last year.
 
A world leader in making
 
The innovation and deployment of the blockchain technology cannot be separated from the construction and improvement of the entire industrial ecology. From December 2015 to the end of 2017, China has established about 20 blockchain-related industry associations/consortia. In terms of education and training of blockchain talents, universities and colleges across China are offering relevant curriculum and courses. The State Council established the Financial Stability and Development Committee to strengthen macro-prudential management and systemic risk prevention.
 
Regarding its future strategy, Li Ming, director of the Blockchain Research Office of the Electronic Industry Standardization Research Institute of the Ministry of Industry and Information Technology, stated that China has started to establish a national standard for blockchain to push forward the building of a blockchain standard system from the top, which is expected to be completed by the end of 2019.
 
In the international competition for blockchain standard, China can't afford to miss the opportunity. Li Ming said that China had suffered a lot of losses in terms of international intellectual property and standards, but it's a different landscape in blockchain, China has now applied for more than 200 patents, the highest in the world. In fact, the formulation of blockchain standards will help China take the initiative in pushing its standard overseas and securing its leadership in the industry.
 
At present, the United States, Japan and other countries are also actively formulating their own national blockchain standards and are aiming to turn their standards into international standards. In addition, the International Organization for Standardization (ISO) is also accelerating blockchain standardization, in which China is also involved.
 
Bottlenecks to overcome
 
The first bottleneck in blockchain development is transaction volume. As far as Bitcoin is concerned, bitcoin blockchain can only handle up to seven transactions per second, which is a far cry from industrial applications. How to increase the number of simultaneous transactions per second is the biggest "pain point" to be resolved in blockchain technology. On the positive side, some breakthrough has been made in this regard. Samsung SDS, an IT service solution provider for Korean enterprises, revealed that its blockchain technology can support up to 2000 transactions per second.
 
The second bottleneck is the protection of privacy. The trust system of blockchain is based on the joint confirmation of all involved parties, which could bring about the issue of confidentiality of private data. Right now, researchers are trying to split the data into public ones and private ones. For a smart contract, data that needs to be kept confidential can be specified, and then those data will be encrypted to ensure privacy. This is technically achievable.
 
In addition, although the blockchain technology itself is considered as a “cost reduction” tool, blockchain itself has cost issues. After all, it requires a lot of storage and bandwidth resources. Researchers are exploring various technological solutions, such as migrating data that is too old to be verified frequently to the historical database and releasing storage space through archiving. In the future, the blockchain technology will continue to experiment new architectures in storage and computing.
 
 

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