How an Open Blockchain Project Scored a Rare Endorsement From China

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Conflux, a Beijing-based startup, has achieved a rare feat: winning official Chinese government support for a public, permissionless blockchain.

On the contrary, the government has been cracking down on ICOs and exchanges since the salad days of 2017.While China tolerates crypto mining and public-network development projects such as NEO, Qtum and VeChain, Xi was talking about permissioned blockchains, a variety preferred by corporations, where only approved parties may participate.

Beyond credentials, the company is adapting the public blockchain model to China's regulatory framework.

In the two lists released by the Chinese government last year, the vast majority of the blockchain projects that intended to register with authorities were permissioned.

"Almost all of the existing investments in public decentralized blockchain projects in mainland China are from the private sector," said Omer Ozden, CEO of merchant banking firm RockTree Capital, which invests in Chinese blockchain firms.

"If you look at investment in the blockchain space, investors are more interested in finding use cases in different industries for enterprise blockchain projects or blockchain-as-a-service platforms compared to public chains," said Chen Zhao, partner at Hong Kong-based CMCC Capital, who oversees blockchain equity investments in mainland China.

"You need some kind of representation from different types of blockchains. You can still apply blockchain in other ways. If you remove the token from it, you take away some important pieces of the blockchain," Ozden said.

The Chinese developer community has been instrumental in the rise of open-source blockchain projects such as NEO and Nervos.

"All the growth of blockchain was driven by these communities and groups of hackers or developers who believe certain technologies are cool and they help build the networks."

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