China's government has established the world's largest blockchain ecosystem. Image: iStock

As part of its grand strategy to lead the digital transformation of the world economy, China is about to launch its national blockchain platform internationally.

Led by the State Information Center, the Blockchain Service Network (BSN) is poised to launch globally on April 25, Cointelegraph reported. If it works as envisioned, companies and software developers will be able to plug into the BSN and build blockchain-based applications as easily as assembling Lego sets. 

But the ultimate goal may go well beyond technical support for coders.

“As the BSN takes hold in worldwide countries, it will become the only global infrastructure network that is innovated by China, whose gateway access is controlled by China,” declares the latest white paper penned by the BSN Alliance, led by the government agency, several state-owned entities and blockchain firms.

As such, the project has geopolitical and macroeconomic implications.

“The move is very much like the ‘One Belt One Road Initiative’ in which China provides other countries with infrastructure and gains some first-mover advantage,” said James Cooper, a law professor and director of international legal studies at California Western School of Law.

The project also reminds Cooper of “Made in China 2025,” a nationwide initiative to spearhead innovation in areas such as robotics and artificial intelligence, he said. The subtext is a desire to overcome China’s image as a copycat, reverse-engineering innovations from elsewhere.

In the October announcement of the BSN’s internal testing, the Chinese government envisioned a variety of use cases. These included smart city applications, which use sensors connected to the internet to collect data and glean insights for managing public resources; in particular, the alliance mentioned energy conservation. It also listed identity registration and data storage as opportunities for BSN.  

“China has the ambition to be the technology leader in the world. And I think they might have enough technology chops to pull this off, at least within the blockchain industry,” said Edith Yeung, managing partner at blockchain-focused venture capital firm Proof of Capital. 

Several signs indicate China has been building to this moment. 

“China files the most blockchain patents in the world,“ Yeung said. “They got the most important infrastructure companies on board: banks, telecom and internet giants.”  

Part of the network’s mission, once it is proven to be efficient and scalable in China, is to go abroad. Hong Kong and Singapore are among the 56 cities where the alliance is testing the network first.  

“We have already deployed some international nodes in other countries, such as the US, Japan, Australia, Brazil, South Africa, Singapore and France,” Leon Li, CEO of crypto exchange operator Huobi Group, said through a spokesperson. His Singapore-based company’s blockchain development arm is a founding member of BSN. 

Other countries will have incentives to join the network, Yeung said, pointing to the BSN’s business-friendly priorities. 

“They get the selling point for enterprises right in their white paper,” she said. “For anyone to come on board, it needs to be low-cost, fast deployment and easy to manage.” 

What is the BSN?

The initiative – which is rolling out after a six-month internal test – is led by the State Information Center, a government agency under the National Development and Reform Commission, as well as state-owned telecommunication giants including China Telecom, China Unicom and payments firm China Union Pay. 

But the BSN itself is not a blockchain protocol. Rather, it’s a centralized platform that has done the heavy lifting for developers so they can plug in and code, choosing from several enterprise blockchain protocols or public chains. The goal is to reduce their operational costs, improve flexibility and provide better regulatory oversight, according to the white paper.

“Designed to unify the fragmented market, BSN is a cross-cloud, cross-portal and cross-framework public network that enables developers to easily and affordably develop, deploy, operate and maintain permissioned … and permissionless blockchain applications and nodes,” Li said.

During the beta testing period that began on October 15 of last year and ends Wednesday, more than 2,000 participants signed up. A third of them are enterprises while the rest are individual developers, Li said.  

One of the network’s advantages for BSN is its low price, which makes it accessible to a wider range of users compared to some of its prospective competitors, according to Li. 

“Deploying [distributed ledger technology] applications on major cloud services such as Ali Cloud and Huawei Cloud can cost developers tens of thousands of dollars per year,” he said. “To make it less cost-prohibitive for developers to deploy DLT applications, the minimal cost on BSN is only $300 per year.” 

The low price will encourage a vast number of small and medium-sized enterprises and individuals, including students, to use the BSN to invent and innovate, thereby accelerating the rapid development and widespread use of blockchain technology, Li said. 

According to the white paper, there are two main parts to laying the groundwork. The first is deploying the so-called public city nodes, essentially data centers or cloud computing resources dedicated in certain cities to processing transactions.

The white paper boasts that the BSN has signed up 100 city nodes via its telecom members and is hoping to deploy up to 200 more by the end of this year.

The second part is the configuration and modification of several enterprise blockchain protocols to fit uniform standards, in areas such as cryptography and software development kits (SDKs), so these systems can work in conjunction with each other. 

So far, the BSN has configured and added several permissioned blockchain protocols to its pool including Hyperledger Fabric, the open-source software Walmart uses to track food along its supply chains. The network has done the same for China’s home-grown protocols such as internet giant Baidu’s Xuper Chain, and FISCO, developed by a consortium of China’s Shenzhen government agencies and local tech companies including Tencent, WeBank and Huawei. 

Most recently, CITA, the enterprise blockchain project initiated by developers at Cryptape, who backed the development of Nervos public chain, has also been added to the BSN. 

Once authorized by the alliance and given a standardized SDK, developers will be able to choose a protocol and rent computing resources in locations they need to deploy a blockchain application. Because the permissioned protocols are adapted to support interoperability, developers will have more flexibility to switch from one to the other, the whitepaper said.

The top-down approach enables China to build a large-scale network quickly while avoiding regulatory red tape, Cooper said. “China has a national strategy.” 

Other China blockchain news

National blockchain committee established

Beijing has joined hands with various Chinese tech giants to form a national blockchain committee that aims to set the standard for blockchain adoption in the country. The committee includes Tencent Holdings, Huawei Technologies, Baidu, among few others, Cryptopolitan reported.

The National Blockchain and Distributed Accounting Technology Standardization Technical Committee aims to set a standard for the country’s blockchain adoption.

The body includes 70 researchers and experts from local governments, state-led think tanks, universities, and other computing centers.

Enjin opens up its wallet to China

Blockchain gaming platform Enjin is opening its wallet to Chinese users ahead of a planned expansion into the Asian nation, Coindesk reported.

In a recent announcement, the project revealed its wallet for its Enjin coin (ENJ) cryptocurrency is now “certified and compliant in China.” The startup said approval for the wallet had come from the nation’s Ministry of Industry and Information Technology.

“The infrastructure running our services and products, including the Enjin Wallet, has been certified/licensed by [the] Chinese state agency,” said Bryana Kortendick, vice president of marketing and operations at Enjin. 

“The wallet app itself complies with all local laws and regulations set forth by the Chinese government and communicates with the … compliant licensed infrastructure,” Kortendick said.

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