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The Great Crypto Race

China's Recent Success

Recently reported by Lloyd's Lists and a few other crypto news sites, a Chinese state-run blockchain consortium has just partnered with the largest port in northern China. This is the latest development in the escalating race between China and the US.

Back in October of 2019 Xi Jinping publicly announced China's aggresive stance on blockchain tech and it's future role in the Chinese economy. He said they need to dedicate a greater amount of resources to the development of the technology even alluding to a "Blockchain+" program which began in December with an endowment of 200 million yuan or just shy of 30 million pieces of green paper used in the US. The report specifically stated the following:

All told, supporters of the new centre hope to develop an ‘international financial back-end base’ and ‘modern industrial financial centre' at Guangdong, China’s biggest port and export region.


This is a test run for an even larger port in China and with such a succesful launch, bringing final confirmation time down from ~12 hours to just 10 minutes, this will be the next step.

In just 6 months China has gone from publicly stating it's optimism for blockchain tech for the first time, to actively implementing the tech in a major port in China with immense success. This is a large leap forward in embracement of the future role blockchain will play in China.

Even outside the realm of public services blockchain is permeating into all different sectors. Since 2017, Alibaba has had a R&D centre in it's Hangzhou HQ dedicated to blockchain tech. They have long since integrated blockchain verification into their food supply chains, reported by the WEF back in 2017.

Green Hand, meanwhile, is part of the Alibaba Group and specializes in generating e-passports for physical goods. By scanning a QR code, it enables identity verification, recording the process of logistics, origin and destination by sending the tracking data to a “block” that provides a unique identifier that enables customers to visit. This not only enhances the transparency of a supply chain, but also makes it impossible for counterfeit goods to enter circulation.

US Lagging Behind

The US has three main sectors it is focusing on according to a GSA's Emerging Citizen Technology Office webpage providing the reports on recent developments in blockchain as a public service. For more on them click here to see their "what we do" page.

The first sector listed is the USAID, an agency dedicated to providing aid to the people of the country, also known as a large NGO with a government endowment of 27 billion USD. A general overview was goven in what they called a "primer on blockchain". In general it doesn't seem to fully portray the capabilities of the blockchain and was more worried about spreading caution of disrupting inefficient govvernment systems that many states' citizens rely on for a wage. They do however provide a large list of resources in refining your knowledge in blockchain tech. One of the more interesting agencies to note is the World Bank Blockchain Lab on page 20.

The next sector is the CDC and the link provided is to an MIT Technology review article. It seems since 2017 the CDC has been preparing a blockchain system in which they would be able to store, process, and share data across the health care industry. This was done with a pandemic in mind and how it would speed up the response and allow for better tracing tactics. This seems like a very convenient time for the CDC to be rolling out a program for exactly that and we may have seen Microsoft recently front-run that idea with it's patent on a bio-chip based cryptocurrency system, here. Likely a combination of the two, storage of biometric data on CDC blockchain for processing and labor data on the Microsoft one for payment purposes.

I am in no way advocating for either system and in fact oppossed to both. Firstly a permissioned blockchain is not a blockchain, it is just a regular, centralized server using cryptography to store, send, and verify it's data. Secondly the idea of a bio-chip based crypto system seems to be a great idea if rolled out on a voluntary manner and built on top of an existing, open blockchain such as Bitcoin or Ethereum.

Finally and least surprisingly the US wants to militarize the blockchain to make it's imperial empire ever-more efficient at terrorizing other countries. The official narrative is that the military has recently began relying on 3D printed materials for parts in production. One quote from the statement touches on the how "digital nature of AM [3D manufacturing] means that parts and products are easier to share and transmit, enabling the creation of a digital supply network and supply chains". The militart wants to digitize its operations to create smoother communication lines between different branches in order to create greater stability in their chain of command. If all their info is traparent, only with permission to see inside, then the likelihood of any one section falling behind the curve in war-time is less likely. You can read the full memo here:

The The Joint Staff, J4 Logistics Directorate and the Deputy Assistant Secretary of Defense for Maintenance, Policy, and Programs are co-leading a project to create a “point of use, time of need” digital supply chain enabled by Additive Manufacturing (3D Printing) and Blockchain. With the introduction of distributed manufacturing, the path from design engineering to manufacturing now includes a digital distribution phase. As the digital thread extends connectivity deep into manufacturing supply chains, cyber security must be an integral part of any successful manufacturing roadmap. AM files can be easily transmitted with the click of a mouse. The digital nature of AM means that parts and products are easier to share and transmit, enabling the creation of a digital supply network and supply chains. AM, with its reliance on the digital thread, is one area which can be especially vulnerable to cyber threats and intrusions. In order to fully realize the benefits of AM within a defined distribution network, secure data transport must be addressed. Blockchain is one solution to mitigate those risks.

Scoreboard

China is well ahead of the US in points towards a transparent blockchain ecosystem in which public systems thrive, there is minimal disruption to local economies, and notifying the public about developments in the tech. The US on the other hand seems to be less willing to provide regular updates, with only one obscure government website which hasn't been updated since 2018, on the state of government programs.

Often times an echo chamber forms around these two because they are the two global superpowers, but there are other players on the court and in fact, in an unprecedented time like this in the world economy, a rebalancing of the world powers is highly likely. Smaller players could rise to the occassion seeing as many of them have had openly positive stances since as early as 2016.

The Other Guys

Georgia has had a land title registry system based on the blockchain, created in collaboration with the Bitfury Group, since 2016. Its has been widely succesful and is one of the first public-private collaborations to be done.

Australia has major corportaions working with it's government sponsored blockchain organization Blockchain Australia like Johnson&Johnson. A major US company relies on an Australian blockchain group for development of supplychains...

The EU has a much better government website dedicated to blockchain development updates, providing monthly newsletters and lots of articles. They hold events and release regular reports. You can check it out here.

Last but not least, Japan. They made bitcoin legal tender as early as April 2017. This has allowed people ever since to openly transact with shop owners with the currency and pay for their utilities. At one point they even funded a government accelorator program called the "Blockchain Business Camp"

Who's Winning?

This is not comprehensive, not because the information here is lacking, but because this space is being constantly developed and evolving to meet the needs of the world economy. Every day programmers around the world are spending their time dedicated to getting the upper hand, striving to design the most efficient structure that will prevail.

The US is apparently in last place in this race. However that is simply from an outsider's persepctive. In order to full understand the stance the US governement has on the tech, it seesm that would require access to higher levels of clearance beacsue the US operates in very opaque ways with varied levels of obfuscation depending on who you are. The media they are releasing seems to point towards their goals in military supply chains, indetification, and "health" care systems.

The current crypto race has years left in it before a true winner will emerge. The real winners of this race however will be the people of the societies who embrace theis open technology and use it to empower themselves and break free from the tyrannical system of fiat currencies. Before then we will see lots of people left behind, defending the relic that is the old monetary system.