China accelerates its own version of Web3
posted on May 31, 2022 7:14 pm Editor :
With the launch of a new non-crypto blockchain network for international markets by the state-backed Blockchain Service Network (BSN), China is speeding up the development of its version of Web3.
According to He Yifan, CEO of Hong Kong-listed Red Date Technology, the BSN Spartan Network, a beta version of the new blockchain, will be released on August 31.
The BSN Spartan Network is only intended for international markets, and transaction fees, also known as gas fees, will be paid in US dollars rather than cryptocurrency such as ether, Ethereum's native token.
According to He Yifan, the network is only for international markets, and transaction fees, also known as gas fees, will be paid in US dollars on this BSN network.
One of the founding companies of China's Blockchain-based Service Network is Red Date Technology.
BSN, officially launched in 2020, is backed by state-owned companies. This includes China's powerful National Development and Reform Commission's (NDRC) State Information Center (SIC), state-backed card payment organization China UnionPay, and telecom carrier China Mobile.
Unlike decentralized networks such as Ethereum and Solana, powered by distributed ledgers, communities, and native tokens, BSN is an open-source, public blockchain, or so-called permissionless blockchain, that deploys all types of blockchain-distributed applications to connect different blockchains for large corporations.
Since China banned cryptocurrency-related activities due to concerns about illegal financial activity and market volatility, BSN's blockchain networks are devoid of cryptocurrency.
He Yifan acknowledged that BSN had faced some challenges in developing Spartan Network as it expands internationally because many public blockchain operators take time to accept non-crypto chain infrastructure.
"In the first or second year, BSN Spartan will be difficult to promote because many people in the blockchain industry only understand crypto." Non-crypto blockchain will appeal to large firms that want to avoid the risk and volatility of digital currencies," He Yifan said.
In a Q&A session at the annual Ethereum Developers Conference, Vitalik Buterin, the co-founder of Ethereum, saw potential in the Chinese government-backed BSN, interpreting that consortium chains are more safe and conservative options than public chains with crypto in the short term. Still, he warned that consortium blockchain's centralized controls might stymie its international expansion.
According to Jehan Chu, managing partner at Hong Kong-based Kenetic, a venture capital firm and investor in Red Date Technology, governments and large companies do not want or need a cryptocurrency attached to their infrastructure.
"This is one of the BSN networks' hidden values," Chu explained.
BSN, which connects 28 different blockchain networks, has integrated Ethereum, Cosmos, Near, Polkadot, Tezos, Neo, and EOS, among other popular public blockchain networks. These integrations, according to BSN, form a new global blockchain infrastructure that can address the majority of issues such as high gas fees and blockchain network congestion.
NFTs (Non-fungible tokens) have gradually broken into the mainstream in China, with a growing number of institutions, venture capitalists, and celebrities allocating a percentage of their portfolios to digital assets, owing to the overall upward trend in the market NFTs globally.
To support the deployment of NFTs in China, BSN launched the BSN Decentralized Digital Certificate (BSN-DDC) Network (ddc.bsnbase.com) in January 2022.
BSN named its NFT network Distributed Digital Certificate to distinguish it from public blockchains with cryptocurrencies outside of China, indicating that its NFT technology is for technological purposes rather than financial speculation.
Unlike other NFT platforms that accept cryptocurrency, such as ether, for transactions, BSN-DDC only accepts Chinese yuan for purchases and service fees.
"NFT/DDC technology is a distributed database and digital certification technology that can be used in any scenario that requires digital proof." We expect China to issue billions of DDCs each year in the future. "Certificate and account management for all types of businesses" is the largest market for DDCs, according to He Yifan.
Launched and traded on public blockchains, NFTs are non-fungible tokens representing real-world objects such as art, music, videos, and videos. However, public chains are prohibited in China due to concerns about cryptocurrencies' security.
Consequently, to avoid the inevitable connection between NFTs and cryptocurrencies, BSN devised a new solution: the DDC network.
BSN-DDC has integrated ten open permission chains (OPB), an adapted version of public blockchain (permissionless network) that a specific group can govern. Wenchang Chain is used to power the ten OPB networks, including adapted versions of Ethereum, Cosmos, Corda, and EOS.
Gas fees are paid in fiat currency through BSN-DDC portals, and minting fees can be as low as 0.05 yuan (0.7 US cents), according to BSN, which is significantly less than public chains like Ethereum. It can also transfer NFTs from its network to OpenSea, its largest NFTs trading marketplace.
While China maintains an effective ban on cryptocurrency, the country is quite bullish on the underlying technology, with Web3 decentralized infrastructure set to be the country's next big tech focus.
The Ministry of Industry and Information Technology (MIIT) published a blueprint for establishing the world's leading blockchain technology by 2025 in June 2021, emphasizing the importance of nurturing domestic blockchain enterprises capable of competing globally and three to five industrial research and development hubs.
According to a government report titled "Web 3.0: A New Generation of Internet on the Horizon," Yao Qian, the director of China's Securities Regulatory Commission's Science and Technology Supervision Bureau, highlighted that Web3 would reconstruct the internet's organizational form and business model, as well as solve the problems of business monopolies by big tech firms, lack of privacy protection, and malicious algorithms that plagued the Web2 era.
