DLT chief: Chinese blockchain focus to drive industrialisation

China’s move to embrace blockchain will not just benefit cryptocurrency markets, according to Nish Kotecha, co-founder of blockchain provider Finboot. Kotecha believes that Beijing's positivity towards distributed ledger technology (DLT) has more to do with industrialisation than currency. “In order to jump to the next level of efficiency where maybe price is put back into the …

by | November 4, 2019 | bobsguide

China’s move to embrace blockchain will not just benefit cryptocurrency markets, according to Nish Kotecha, co-founder of blockchain provider Finboot.

Kotecha believes that Beijing's positivity towards distributed ledger technology (DLT) has more to do with industrialisation than currency.

“In order to jump to the next level of efficiency where maybe price is put back into the equation through productivity and efficiency gains, China needs to focus on improving automation or moving to industry 4.0, which is the automation of factories from using [internet of things], from using machine learning, from artificial intelligence.

“Now the foundation of all of that is blockchain as a technology, not blockchain as a cryptocurrency. There’s a big difference.”

His comments follow a handful of official Chinese statements over the past week. At a conference in Shanghai on October 28, Li Wei, head of the People’s Bank of China (PBoC), stated that commercial banks ought to embrace blockchain technologies, according to Reuters. Just days earlier the country’s president spoke of the advantages of blockchain.

“We must take the blockchain as an important breakthrough for independent innovation of core technologies,” said president Xi, emphasising a push to “accelerate the development of blockchain technology and industrial innovation.”

Bitcoin’s value rose from below $7,500 to above $10,000 in the space of a few hours.

Meanwhile, China’s National People’s Congress passed a new cryptography law on October 26 that would set the standard for blockchain usage. Sources have interpreted the legislation as China setting the foundation for its upcoming national digital currency.

For Kotecha the statements suggest China is considering far wider applications of the technology.

“[President Xi’s] statements were received very positively by crypto speculators and crypto investors, but actually I think they’re missing the core of what he was saying,” says Kotecha.

“What it struck me that he was talking about was the further industrialisation of China”.

Kotecha explains that the first wave of industrialisation in China rendered it the “global factory for the world’s goods” due to low cost of labour and manufacturing.

“When it was low it was very attractive, it’s now high, and they try to compete in terms of quality and volume and speed rather than just on price alone, so that’s a change in the benefits of manufacturing in China,” he says.

“The core of blockchain is to be a bit of a foundation database that enables you to collect data from using IoT censors in your manufacturing processes, put that into a blockchain environment, ensure that data is pure to then apply machine learning to ultimately achieve a factory environment that’s highly automated compared to what you have today.”

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