I was invited to speak at the First World Blockchain Conference (+ Manfacturing Innovation Development Summit) held in Changsha, Hunan, China on 30-31 October 2016.
The conference was sponsored by China’s Ministry of Industry and Information Technology and several other smaller ministries, along with the Communist Party of China (CPC).
In attendance were top Ministry and Party officials, in one of the first events where leaders from both arms of government came together to discuss both Bitcoin and Blockchain Innovation.
The first day saw Li Meng, Vice Chairman of the National Government, join proceedings. The second brought Li Wu Wei, (seated in center in front of the ladies in white) Vice Chairman of the CPC’s National Political Bureau.
This is the conference where Tencent (who owns WeChat, the most widely used chat platform in the world which is also a payments platform, announced it is developing a “cloud blockchain” platform.
I spoke as part of a team of international experts on a variety of subject areas. The point of my speech was to encourage the Party and the Government to officially encourage Blockchain Technology Innovation and take a leading role in its development. This is a fact already in the Bitcoin Mining area, where Chinese Miners dominate the market even though they are faced behind the “Great Firewall of China”, a wall of censorship that makes it difficult to get quality internet speeds. Somehow, miners have found a way through this wall, and by creating specialized software have come to take a large share of the bitcoin mining market. In other words, some 40% of newly created Bitcoins are minted in China.
Here’s the text of my speech:
Ladies and Gentlemen,
It is an honour for me to be able to speak to you today to give you the international perspective about the opportunities and benefits that will result from China taking a leading role in blockchain technology development, in innovation, and what this will mean for the economy and for the people of China.
In 10 years time, with or without blockchain technology, China will have the wealthiest economy in the world. By leading innovation in blockchain technologies, not only as a platform for the digital exchange of value, but also as a platform for the next generation of the internet, I believe this time period can be reduced to 5 years or even less.
With the support of the Party and the Government providing regulatory guidance which ensures public safety while encouraging innovation, according to the model suggested by Adam Vaziri,, companies will be motivated to create an open payments standard alongside existing digital payment options. These are open protocols, giving everyone an opportunity to contribute to and support these systems, as they are public systems, as important to everyone as roads and bridges, electricity, and water.
We could also see this as a new kind of digital Renminbi, providing an official government payments platform alongside privately-own platforms such as Alipay, WeChat and even Bitcoin, which is a publicly-owned and operated payments platform worldwide.
This innovation, driven by Chinese companies working together with the government could then become part of a new network of digital currencies used in each country worldwide. I see this as strengthening the national currency by acting either as a secondary store of value for assets and capital for future investment, similar to gold; or as a platform which encourages national currencies to function as a medium of exchange, which is the lifeblood of a healthy economy.
However, for this to happen, we from the international community believe that we must also be building the next generation of the internet, which will also be built on blockchain technology. This means there are not only possibilities for blockchain innovation for in the area of digital payments, but in all areas of digital communications and information technology management.
We see the the cost of the previous generation of internet increasing, in terms of data loss, theft, hacking, and inefficiency. The internet we use today is not the internet that was designed for how we use it today. It is time to move to the next level so that the internet more closely matches how it has become, and one major element of upgrading is as a platform for transferring value.
However what is behind this is much more important. Upgrading the internet to a blockchain-based platform increases not only security, but efficiency, reliability and security. Healthy trade and administration of resources requires secure and reliable communications channels, and we need to work toward hack proofing our systems and networks not by creating a fortress, but by increasing the opportunity cost of hacking. Moving to a distributed platform from a centralized one is an essential step that must be taken.
The international community needs China’s involvement to make this a reality. We are so pleased, and so proud to see Chinese blockchain companies taking an increasingly active role in blockchain technology innovation. Progress is happening fast, but we also need the help of Chinese companies to consolidate current blockchain technologies, and to develop new ones as well.
As a large amount of Yuan has been invested in Bitcoin as a store of value, careful regulatory policy will result in a large investment in blockchain technology innovation, which is what we have witnessed in all jurisdictions, like London, Singapore and California where a healthy regulatory environment has helped incentivize very large investments in blockchain technology innovation. We hope that a similar regulatory environment will be created in China, leading to massive investment in Chinese companies working in blockchain technology innovation.
I foresee many benefits to government as well. Storing, securing and sharing data using blockchain technologies results in many improvements in efficiency, with the financial benefit of reducing the cost of government administration. And I forsee the same results for business, in a reduction in the cost of business administration through many enhancements in efficiency and security.
It is therefore our hope that China will lead the global economy with blockchain technology innovation, in research and development and implementation, and build the model that other countries will begin to use. In this way, China will be creating a new, more transparent and equitable monetary system for the world, and it is our belief that this is the direction that a new internet platform for digital value exchange will lead us.
China, by taking an active role in blockchain technology innovation which we see as the outcome of this conference, will succeed in becoming the example for other countries to follow and in working together to create a new global financial architecture for the benefit of all humanity.