The government of the Chinese province of Jiangsu is backing a new research effort aimed at offering unbiased information to businesses coming up to speed on blockchain.
Launched in September 2016, the Jiangsu Huaxin Blockchain Research Institute (JBI) is now going public via CoinDesk as the first state-owned enterprise to focus solely on blockchain tech. Already, the group, backed by parent firm Beijing Huaxin Electronics Enterprise Group, claims to have roughly 100 employees at its office in Nanjing working to develop its product.
According to executive director of operations Michael Yeung, the group in many ways can be read as a reaction to the growing hype in the blockchain industry, as well as the increasing desire global governments have shown for becoming active on R&D.
At CoinDesk’s offices in New York, Yeung and five of his colleagues discussed how international businesses in the sector are aggressively targeting the Chinese market, and how this has created a new appetite for informational services domestically.
Yeung stressed that unlike established consortium groups, JBI intends not to be “beholden” to corporates, and that its government affiliation makes it able to focus on overall ecosystem health.
He told CoinDesk:
“The hype for blockchain in China is massive. There’s different ICOs [initial coin offerings] with pretty girls running around and DJs. But we’re also serious about blockchain and the future. They’re willing to try blockchain.”
With this backdrop, the JBI will seek to offer services working on academic research, education, political engagement and product development centered on blockchain tech.
Senior members of the group include research directors Kraken Yu, formerly of consultancy Chainsmiths; Paul Jones, a former consultant at consultancy CryptoIQ; and Phillip Fox, a former treasury accountant at New Zealand’s ASB Bank.
The group’s launch further comes amid an active time for blockchain in China. In addition to new policies levied on bitcoin exchanges, the country has seen the launch of new blockchain efforts by its domestic insurance and lending industry, as well as major technology firms like e-commerce giant Alibaba.
Leapfrog opportunities
To start, JBI is looking to differentiate itself from approaches taken by established startups and consortium efforts.
Though similar in aim, Yeung said that JBI is styling itself as a facilitator, seeking to be more “comprehensive” than groups like R3. Of course, this mandate will still require partnerships and network.
(JBI is a member of Enterprise Ethereum Alliance and Hyperledger, and it has working partnerships with Bitfury, Bloq, Blockstream, ConsenSys, Rootstock and more).
The difference, though, will be in how these relationships develop.
“You might be a company involved in supply chain and there might be aways for blockchain to help you. We’ll see if one of the tools in our partnership portfolio, if it makes sense to connect that with your needs,” Fox explained.
He noted that this means working with academics and universities on research projects that could inform its matchmaking. Already, the JBI intends to form a consortium of universities that would study applications of the technology.
Further, Fox explained that the JBI wants to work across financial and non-financial use cases, evaluating and working with both private and permissioned blockchains.
Still, he said the overriding goal is to position China as a leader on blockchain technology:
“It also offers them a leapfrog for cutting-edge technology, so it’s clever if they implement it in banking – the west will try to catch up.”
Overlooked opportunities
Elsewhere, JBI seeks to look into blockchain use cases they argue are being underdeveloped.
“There’s lots of different things that blockchain can provide benefits for, and they’re not as easy to look at as finance,” he said, adding:
“How much profit is there for educators if education is better because of blockchain?”
Right now, the group is still investigating early business partnerships, but Yu framed this also as a way it plans to differentiate.
“We’re not interested in the 10% back-office improvement that will let people get paid. That is not very interesting. We want to serve the 99% and give a 90% revenue,” Fox continued.
Another unique feature of JBI’s model is that it will seek to train and accredit blockchain professionals to provide market transparency.
“We have ongoing lessons three days a week,” Yeung said. “Two-to-three hours of lecture on blockchain, and they have to pass an examination every three months.”
Those individuals, Yeung suggested, would then be able to sell partner technologies or otherwise be involved in various JBI activities.
Work ahead
For now, though, the group is pushing ahead with work on research and a few experimental projects.
Already, JBI is working with Zhongke Media, a state-owned media and advertising entity, on a project that showcases more creative uses for blockchain in the Internet of Things industry.
The project envisions how a company’s TVs and ad displays could be upgraded with air filters, the shares of which could then be bought and sold digitally on an open market. The design could serve as a way to both cut down on pollution and help token holders on the blockchain gain steady access to revenue.
“The TV behind you would have an air filtration unit,” Yeung explained. “So, it does two functions, it shows you an advertisement and clears the air space. Investors who invest in that have revenue collected by the machines.”
For all these futuristic use cases, the group noted it has tough work ahead.
Given the state of China’s vibrant and experimental cryptocurrency market, JBI’s team noted a big part of its mandate is to provide due diligence for wider public benefit and to mitigate consumer risk.
While the task could be daunting, Yu said the group is taking its aspirations seriously, noting the characters used in the company’s Chinese name: 江苏华信区块链研究院.
Yu explained:
“The first character means ‘whole’. The second is ‘trust.'”
JBI image via Pete Rizzo for CoinDesk; Jiangsu image via Shutterstock