The price of blockchain and cryptocurrency-related stocks in China was driven up significantly after Chinese President Xi Jinping recently championed the technology in an address to the Political Bureau of the Central Committee – a somewhat surprising move given the country’s restrictions on cryptocurrency.
Personally, I remain sceptical about the merits of crypto investments, and would advise caution for fervent followers. In my opinion, the next blockchain winners will be those who use this technology for real world challenges – so-called front end services - and it is this potential that is captivating technologists in China, Silicon Valley, London and fast-growing technology enclaves such as Barcelona.
"We must take the blockchain as an important breakthrough for independent innovation of core technologies," Xi said. "[We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation."
Xi’s public endorsement is an important moment in blockchain’s history. In particular, his reference to industrial innovation suggests a focus on industrial supply chains and Industry 4.0, the drive towards a fully automated manufacturing process combining IoT, cloud computing, machine learning and artificial intelligence, underpinned by blockchain to ensure the validity and auditability of data.
Blockchain is the technology behind a distributed network of computers that can be used to store data securely but which, uniquely, has a single memory. That means data cannot be copied to sell the same asset again, which is why it has been referred to as the “trust platform”. The efficiencies will benefit the multitude of supply and value chains requiring validated data to prove their sustainability and legitimacy. Data is the new currency and its accuracy and security are pivotal to this new ecosystem, which is where blockchain and the need for immutable data comes in.
Finboot’s flagship product, MARCO, is an example of Xi’s call for industrial innovation, enabling enterprises to access and use blockchain infrastructure technologies within their organisations simply and easily through a blockchain-agnostic SaaS delivery model. Repsol recently invested in Finboot since, as a customer, it could see first-hand the opportunities that blockchain can unlock within its infrastructure. Its use case has been in the Oil & Gas industry, using blockchain to provide safety certification for petrochemical products.
President Xi is right to recognise that enterprise technology is at an inflexion point. No longer can we rely on the early adopters to encourage laggards to re-engineer their supply chains and manufacturing processes. Governments will play a pivotal role as they seek to reshape their economies into high tech, high growth hubs for the future, recognising that this requires advocacy of innovative technologies.
As China has now stated, its aim to is to be a pioneer in the blockchain arena and, indeed, over 500 blockchain projects have been registered with the Chinese government since March this year, including some of the country’s largest companies. It will be interesting to see which innovators will flourish.