The impact of China’s Blockchain Service Network may be limited, but the region’s national blockchain infrastructure continues to outpace other regions.
First announced in October 2019, China’s Blockchain Service Network, also known as BSN, is aimed at providing a global public infrastructure designed to support both private and public blockchain networks across interconnected cities.
According to the BSN introductory white paper, the project serves as an “information infrastructure” designed to advance the development of smart cities for the emerging digital economy. The white paper also explains that the goal of the BSN is for cities to build one or more public city nodes that are linked via the internet to form a nationwide — and eventually, worldwide — physical city node blockchain service network.
Predicted to languish globally over time
Although ambitious, China’s BSN appears to be making progress since its launch one year ago. For example, the BSN officially became available for global commercial use in April this year. The initiative is backed by the Chinese government policy think tank, The State Information Center, along with major players involved with China’s communication, financial and software industries.
Even during the BSN’s beta phase, the project has reportedly attracted more than 2,000 developers, who have created applications to advance public water supply systems, item traceability and electronic invoices. Since then, China’s BSN has launched an international website designed to bring in more developers. The website also states that major cloud providers, including Google and Amazon Web Service, are part of the initiative. Most recently, the BSN announced that three well-known public blockchains have joined its growing ecosystem.
Yet, progress doesn’t always equate success, especially when it comes to a global infrastructure with goals as lofty as the BSN’s. As such, market research company Forrester revealed in its 2021 enterprise blockchain predictions that China’s BSN will “languish” due to the region’s current geopolitical climate.
Martha Bennett, principal analyst at Forrester and a co-author of the report, told Cointelegraph that within China, build-out for the BSN will continue at a steady pace. However, Bennett explained that China’s ambitions for the BSN to be a truly global network won’t be fulfilled in the near term:
“Enterprises will be wary of becoming involved in initiatives that are closely associated with the Chinese state. There are also concerns about the level of control the Chinese state may have over the access points to the network.”
According to Bennett, sanctions, along with many countries’ desire to reduce dependency on China, will impact global progress for the BSN. While Bennett’s thoughts about the BSN are just a prediction, some recent statistics reveal that unfavorable views of China have now reached historic highs. In addition, the United States has demonstrated a fear of technology controlled by the Chinese government, seen through bans being called for apps reportedly associated with the Chinese government, such as TikTok and WeChat.
However, some beg to differ that China’s geopolitical climate will affect the BSN development. Yifan He, CEO of Red Date Technology — the private company behind the daily operation and maintenance of the BSN — told Cointelegraph that the current geopolitical climate has not affected the development of the BSN. “Half of our tech partners are from the U.S, and we are working closely with Amazon Web Services and Google Cloud as our global cloud partners,” he said. He further noted that the BSN is currently more of a technical project:
“The goal of the BSN, in the short team, is to lower the cost barrier of blockchain technologies to anyone, and build a better interoperability protocol to connect all chains in a very low cost and easy way.”
Specifically speaking, the BSN white paper discusses the potential of blockchain for an initiative like the BSN. The document states that blockchain will enable a resource-sharing mechanism for smart cities, greatly lowering the cost of resources. The white paper states that blockchain application publishers can “use uniform public services provided by the BSN and lease shared resources as needed. This greatly reduces the publishers’ and participants’ costs.”
According to He, the BSN is moving forward smoothly, noting that the BSN testnet for permissioned blockchains was recently launched. “In the long run, we really think the broadcasting way of data transmission created from blockchain technologies will reshape, even rebuild the Internet for better security and better privacy,” he added. He further commented that a date has not been set or even predicted as to when the BSN will make a global impact.
BSN’s global initiative may be more about marketing public blockchains
It’s also important to point out that there are two versions of the BSN: one is called “BSN China” and the other is “BSN International.” According to He, BSN is still one network, but the governance is divided between BSN China and BSN International. “Just like the Internet, China has one agency to regulate the Internet, and the U.S. has another,” he said.
Although the idea makes sense, skepticism regarding BSN International is being demonstrated. Kevin Feng, former chief operating officer at enterprise blockchain company VeChain, told Cointelegraph that China’s geopolitical climate is definitely one of the key challenges for BSN International. “It’s a concern to U.S. or EU-based companies that most of the BSN blockchain infrastructure is hosted on China-based cloud providers,” he said.
Moreover, Feng pointed out that BSN China only utilizes permissioned, private blockchain networks, while BSN international incorporates permissionless, public blockchains. Feng believes that China BSN can make a swifter impact, yet he noted that the international version is “more for marketing purposes for public blockchain protocols.” Feng further commented on flaws with this model, like charging users based on the traffic generated:
“In addition to China’s geopolitical climate, this service model is not attractive to the developers on the public blockchain. As public blockchain are open source, developers usually set up their own nodes for their own applications, and it’s probably cheaper than the traffic-based model.”
China’s blockchain initiatives still predicted to advance fast
Although skepticism remains around the BSN initiative, Forrester’s recent enterprise blockchain report also predicts that China’s national blockchain infrastructure will advance faster than most regions. According to the report, in 2021, the Chinese government will make strategic investments in most provinces, with deals signed and systems going into production. The report states: “This national investment will help create bridges between siloed processes in areas like citizen services that have been especially challenging in China. This concerted effort will propel China ahead of other regions.”
According to Charlie Dai, a Forrester analyst and co-author of the report, China’s “new infrastructure” national initiative makes blockchain an integral part of the country’s digital infrastructure. Bennett further pointed out that while this isn’t much different from Europe’s blockchain ambitions, China is a single country where technology and the build-out of a network can be translated into reality more quickly:
“By contrast, in Europe, there are EU-level as well as country-level initiatives. The processes to get these going are designed to be fair, but as a result are also typically quite cumbersome; then there’s also the need for alignment between country-level and EU-wide initiatives. In the US, technology adoption is typically left to market forces; hence, there’s no equivalent initiative to the European Blockchain Services Infrastructure or BSN.”
Moreover, Czhang Lin, network blockchain advisor for Haier Group — a Chinese multinational corporation — told Cointelegraph that China’s national blockchain infrastructure will move faster than other regions, mainly due to the country’ historical top-down central planning culture. “Since President Xi announced blockchain as national strategy level technology in 2019 October, we have seen a massive interest among governments of all levels to study and plan blockchain adoption,” he remarked.
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