Is China a blockchain-powered nation? What factors determine the success of a country in this technology revolution and implementation?
From digital payments to robotics, China has been able to leverage quickly and efficiently its role as an economic leader and drive mass technology adoption.
The country has built a “blockchain wall”, an ecosystem composed of three major layers/bricks.
At the base of the blockchain-powered nation, forming the foundation of the wall, are institutional investors linked to corporate players: Chinese blockchain projects connecting with powerful CEOs and traditional venture capital firms to raise money. Less importance is placed on marketing and more on the actual technology and product design. Essentially, these projects secure institutional support, then develop real-use cases and pilots, before finally focusing on marketing. It is a top-down approach rather than a bottom-up one, with a high level of pragmatism.
The second layer of the wall is composed of a diversified network of universities and incubators that facilitate the growth and development of blockchain initiatives through hackathons and blockchain labs. This solves the main challenge of sourcing talent and helps in building a community of nodes. Due to their younger age, students have higher technology adoption, which represents a key element for any project’s development.
For blockchains to ultimately succeed, they need the final layer of the wall: a dynamic financial environment and fast-moving regulatory implementation. Despite the gap between the regulated banking industry and the decentralized nature of many blockchain projects, some of the largest financial institutions are considering implementing the technology to improve their processes and their operational efficiency. Bank of China is also expected to increase investment in the development of blockchain technology.
On the regulatory side, the fast-paced nature of the technology requires ongoing reviews and improvements. China could benefit from its political structure to move quickly and provide rapid development and approval of any rules related to the technology.
China has the right credentials to make massive advancements in the blockchain world. It’s not a matter of how or whether it will; it’s probably just a matter of time.