On the 24th of October, President Xi pointed out that the blockchain should be regarded as an important breakthrough for China's core technology independent innovation in the eighteenth collective study of the status quo and trend of blockchain technology development held by the Political Bureau of the CPC Central Committee. This shows that after several years of study and inspection, the Chinese government will lead to increase investment in the blockchain industry in order to promote the innovation and development of blockchain technology and industry in China, and the blockchain will certainly affect China's future development.
The popularity of blockchain industry is closely related to the birth and development of Bitcoin. As the underlying technology of Bitcoin, the advantage of the blockchain is precisely the reason why the Chinese government has laid out the blockchain project.
The blockchain is a decentralized database, and each of its data blocks contains information that is open to everyone, making the blockchain highly transparent. The validity of the data block can be verified by the included information and generate the next block. Such a chained data structure makes the blockchain information difficult to be tampered with.
The many advantages attached to the technical characteristics of the blockchain make the blockchain have a large number of application scenarios. The supply chain, digital copyright, food and drug industries and many other industries all have the potential to use the blockchain to accelerate the development.
In the banking and finance industry, the use of blockchain will help the bank to know the customer about all the clearing and settlement, trade finance, domestic and cross-border payments, loan origination and post-funding automation, and anti-money laundering. In manufacturing, with the information contained in the data blocks, all raw materials, processes, and production processes can be traced, and related intellectual property rights will be protected. In government and public sector, the blockchain will assist the government in promoting one-stop office and other convenience services. In supply chain, the blockchain will ensure that all logistics information is real and accessible. As the blockchain information cannot be tampered with, the burden of related regulatory work will be reduced.
Blockchain industry is still at its infancy, but the investment of many countries on this newly formed industry has been continued for years. Since blockchain is inseparable from the network virtual currency, initial coin offering (ICO) is the most common financing method for the blockchain industry. From 2014 to 2018, the global ICO financing was approximately 18 billion US dollars, more than 4 times the amount of other financing methods during the same period.
ICO is a more popular financing method
However, in the case of over-regulation of regulatory policies, ICO's prospects in China are not good. In 2017, China explicitly banned ICO and closed domestic virtual exchanges. Although China still has ICO agency investment and other activities, the regulation is getting more and more strict, and ICO will not become the main financing method for the development of China's blockchain industry. Between 2014 and 2018, China's non-ICO-based blockchain start-up financing amounted to approximately 600 million US dollars, ranking second in the world. The future development of China's blockchain industry is expected to be mainly driven by non-ICO financing methods.
ICO is not expected to be the main financing method in China
According to Stanford University's research report, the development time of various applications in the blockchain is different. Most of the blockchain infrastructure related to the government has a short maturity time. Among other blockchain enterprises, relatively basic enterprises such as land registration, charity projects, health industry, agriculture and financial technology have developed rapidly.
Blockchain Infrastructure is expected to be developed first
At present, the development situation of global blockchain enterprises proves Stanford's theory to a certain extent. Enterprises related to blockchain infrastructure like hardware facilities, software platforms and solutions are about 28%, second only to the cryptocurrency currency blockchain industry. Since the enterprises of the latter are closely linked to the blockchain, so they still account for 38% of the global blockchain market. In other blockchain industries, the proportion of network applications and financial technology are relatively high, with the former accounting for 12% and the latter accounting for 13%.
China currently has more than 300 blockchain companies, second only to the United States in terms of quantity, and belongs to the first echelon. Among the 113 listed blockchain enterprises in China, there are 33 software and information services enterprises, accounting for about 29% in all the listed enterprises. Financial companies and cultural companies are close behind, with the former accounting for about 17% and the latter accounting for about 14%.
Since the information is attached to the data block and is hard to tamper, the application value of the blockchain is significant in industries that require frequent transaction checkout and industries that involve intellectual property protection. Supply chain, foods & drugs, manufacturing, energy and many other industries are all good scenarios for the use of blockchain, and the development of China's blockchain industry will start from these industries.
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