The president of China declared that his country needs to seize the opportunities presented by the technology.
The Chinese leader said in a speech that the emergence of the ledger was an important breakthrough in independent innovation of core technologies.
Since then, China has been building a platform that aims to facilitate the deployment of the technology for companies. The network is called a Blockchain-based Service Network.
This is what we know so far.
The underlying technology of the coin was called theBlockchain. Transactions are recorded on the distributed ledger of activity.
No one owns or runs it. It is maintained by a network of participants who use specialized computers.
There are many different definitions of what a blockchain could look like. It might be referred to as distributed ledger technology. The public or private nature of the ledger makes a big difference.
We think blockchain technology is so powerful it will change the entire internet and almost all the entire IT system architecture.
Permissionless blockchains allow anyone to join and potentially make changes to the ledger, as long as they are running a particular software or device.
Permissioned blockchains are usually private and only allow certain people to be involved in their use.
Proponents of the technology say that it can help bring transparency and speed to traditionally slow and expensive processes.
Smart contracts are an important part of the technology. If certain conditions are met, these are contracts that execute automatically. Proponents think these are key in trade finance.
Yifan He, CEO of Red Date Technology, told CNBC that he thinks the technology will change the entire internet and IT system architecture.
Red Date Technology is a founding member of the Service Network.
The technology is important for China as the government sees it as a low barrier to entry and wants Chinese companies to use it to solve real world problems.
The product is aimed at companies that are operating cloud computing infrastructure. That could be a large public cloud player like Amazon or Microsoft, or it could be a firm that runs its own private cloud or intranet.
It could be costly and time consuming to deploy these applications in the cloud, which is why BSN bills itself as a one-stop shop.
The Chinese firm is trying to solve a difficult problem in the industry, which is interoperability, or making different blockchains work with each other. Two banks may not be able to work together if their applications are built on different platforms. As the company bridges different blockchains, applications built via BSN infrastructure would be interoperability.
For companies that want to use several blockchain applications in their organization, the cloud vendor they use would allow them to do that via the BSN product. The idea is that a business or government can use the platform to deploy applications without having to spend a lot of money.
The demand is low, but Red Date is bullish on the long-term future of the product.
The CEO believes that in 10 years all clouds will have a standard environment to handle applications related to the internet of things.
One key point is that it doesn't make its ownBlockchain.
There is no coin on the platform. China has effectively banned activities related to cryptocurrencies.
The managing partner at Kenetic, a venture capital firm and investor in Red Date Technology, told CNBC that governments and large-scale companies don't want or need acryptocurrencies attached to their infrastructure.
Chu said that non-crypto use case comes in and that BSN offers a compelling infrastructure.
Large firms that don't want to be exposed to the risky and volatile nature of digital currencies could be interested in non-crypto blockchains.
Red Date Technology is a start-up based in Hong Kong.
The project is backed by entities with links to the Chinese government. The State Information Center is part of the National Development and Reform Commission.
China Mobile is a state-owned company.
BSN wants to go global. It could be difficult because of its links to the Chinese government.
Part of the interest in BSN is that it is so ambitious. Triolo from Albright Stonebridge said that it has come under scrutiny because of the Chinese government connection.
He said that the international portion of the company is trying to separate from the domestic efforts.
He is the CEO of Red Date Technology.
He acknowledged that the plan to go global and the perception of being linked to the Chinese government was a huge challenge.
The international version of the platform will be open-sourced, allowing people in the public domain to inspect the code for any potential back doors.
The centralized nature of the efforts could be a challenge.
There is a fundamental incompatibility between China's stated ambition of supporting a domestic blockchain development ecosystem and the nature of the technology, according to Garrick Hileman, head of research at Blockchain.com.
China has no chance of becoming a global leader in this important technology sector unless it can somehow find a way to become comfortable with the disruptive power and loss of centralized control inherent with embracing blockchain.
The CEO of Red Date admitted that it was a challenge not to have the digital currency on their platform. A lot of people are not interested in the non-blockchain offering.
The U.S. has been engaged in a tech rivalry for the last few years.
China has focused on technologies such as quantum computing. Another area of importance is the internet.
Chinese tech companies have placed a lot of emphasis on international expansion, a move supported by Beijing in the context of the global tech battle with the U.S.
The Chinese government's attempt to support the development of theBlockchain ecosystems on its own terms, with allowances for regulatory approaches in different jurisdictions is the significance of theBlockchain Services Network.
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