Chinese experts have called on blockchain investors to think outside the box and exercise foresight over applications of the nascent technology, and said that it is not appropriate to all industries.
Zhang Shouyi, an academician of the Chinese Academy of Sciences, commented, "Investors eyeing the blockchain sector should be far-sighted." Zhang, who is also the founder of Danhua Capital, noted that a majority of blockchain-enabled applications across the globe have “far-fetched” views.
"We need to realize the power of blockchain and understand what the technology cannot do,” Zhang said. Indeed, several Chinese analysts have expressed doubt that some blockchain applications can hold water.
Prior to the ban by the Chinese government on all initial coin offering (ICO) activities in September last year, data from the National Internet Financial Risk Analysis Technology Platform showed that ICOs in China had raised $393 million (2.62 billion yuan) from 105,000 investors as of July 19.
Indeed, it looks like the ban did not affect China's cryptocurrency industry at all as the nation remains a powerhouse in digital currency trading and new project launches. Cryptocurrency exchanges like OKEx, Huobi and Binance continue to operate.
Reports indicate that one of the top exchanges, BTC China, or BTCC, is returning to China. This was confirmed by a recent tweet post which reads:
“The world's oldest cryptocurrency exchange, BTCC, formerly BTC China, after taking a nine-month break from cryptocurrency, announced on Monday that it is relaunching its exchange platform. The revamped exchange from BTCC will support crypto-to-fiat exchange and crypto-only trading pic.twitter.com/0SjC5QrO6T.”
A former Chinese science and technology vice-minister, Zhang Jing'an, said there are plenty of uncertainties facing blockchain technology, with its future depending on collaboration between finance and technology departments.
He was quoted as saying:
"The current problem is that people in the financial sector still lack a deep understanding of the underlying technology, while technical experts often find it difficult to familiarize themselves with China's complex financial system. There's still a long way to go to combine these two aspects and secure details to push blockchain technology forward."
But for Zhong Xinlong, a consultant at CCID Consulting, the benefits of blockchain are not an application to all sectors. He explained that some applications, "already have good decentralized solutions," meaning blockchain does not add to efficiency and cost reduction in these scenarios.
Beijing Chilun Yichuang Technology Co Ltd. product manager Yuan Peizhang added, "Efforts should be applied to sectors of more strategic significance. Industries rich in information that can be expressed in digital form, such as banking transactions and medical history, are more likely to commercialize blockchain technology."