White Paper on China’s Blockchain Industry Published

456 blockchain companies have registered in China, forming the ecosystem of the rapidly growing blockchain industry, as the industry authority said in a recent report.

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According to the “2018 White Paper on China’s Blockchain Industry” issued recently by the Ministry of Industry and Information Technology, Since the start of 2018, the blockchain industry has been on the front line.

At the same time, with the continuous pouring in of entrepreneurs and capital, the number of blockchain enterprises is increasing as internet giants are also making deployments in the blockchain arena to promote the development of the entire industry.

Many local governments have actively positioned blockchain technology as an industry and gradually putting all relevant policy systems and regulatory frameworks in place.

The white paper concludes six major features of China’s blockchain industry: first, though taking form, the blockchain industry ecosystem is still unfolding. Second, location wise the distribution is relatively concentrated, with an obvious cluster effect. Third, blockchain applications are very diverse, from the financial field to the real economy. Fourth, “informatization of the collaboration process” is being realized, which helps the real economy to reduce costs and raise efficiency. Fifth, the abuse of the technology may lead to certain risks in industrial development, which cannot be ignored. Sixth, the policy systems for the industry are gradually forming and the environment for industrial development is being continuously optimized.

As for the future development trend for the industry, the white paper states that: first, blockchain has become the forefront of global technological development, which opens up a new track for international competition. Second, blockchain has become a new hot spot for innovation and entrepreneurship which will lead to new application scenarios. Third, blockchain will be broadly applied in the real economy within 3 years and may provide key support to the establishment of a digital China. Fourth, blockchain may set up a new “platform economy” to open up a new era of sharing economy. Fifth, blockchain may speed up the process of “credible digitization”, driving finance to be more substantive to support the real economy. Sixth, the supervision and standardization of blockchain will be improved, and the foundation of its industrial development will be further strengthened.

Based on the blockchain system, the right of data can be validated effectively, and the data must be verified by multiple parties, and can not be tampered, which effectively guarantees its authenticity. This process of data chaining is called “credible digitization”, which speeds up the realization of “informatization of industrial collaborations”.

As stated above, it cannot be ignored that an abuse of the technology could bring certain risks to the industry’s development. The white paper points out that the two risks faced by the blockchain industry are: compliance risks and technological risks. During the early stages of blockchain development, a number of illegal fundraising, pyramid scheme and even fraudulent cases occured through initial coin offering (ICO). Technological risks include 51% attacks, private key and terminal security, security of consensus mechanisms, as well as network congestions and forking caused by traditional network attacks, and so on.

This article originally appeared in Caijing and was translated by Pandaily.