Why The US Needs To Challenge China’s Blockchain Advancements
As China thrives to join the world in setting standards for this emerging technology, the president of the country, Xi Jinping, announced that China would take the opportunity and start to invest in blockchain.
China appears to be set on the potential of blockchain, but that announcement comes after previously negative policies to blockchain and cryptocurrencies. In 2017, China banned all efforts to tighten controls on risky investments, cryptocurrencies, mining, and initial coin offerings.
As the United States backed away, this investment seems to help China to move into higher potential technology.
The decision of the Chinese president means an open challenge between the U.S. and China. Currently, the field is largely dominated by the U.S.
What is a blockchain?
Blockchain is a distributed, shared and public digital ledger system that allows for the secure storing and accessibility of information and data for all.
It can be used in many fields. As for the finance sector, blockchain represents something that traditional banks can use to reduce their operational costs, which will allow individuals to perform transactions in a secure environment.
The technology can also be used for futuristic, smart and digitally connected cities. For instance, it can be used in parking spaces, being able to provide information regarding the free spots in the parking space.
The U.S.’s position
The U.S, on the other hand, is determined to keep its title as a frontrunner in the development of future technologies. The 45th president of the U.S. has mentioned it many times that he aims to help his country to regain a position of a global innovation hub.
Although it’s still unclear what Trump’s view on new technologies is, the president seems to want his country to take a lead in every single field.
As he wrote on his Twitter page a few months ago, he does not trust cryptocurrencies, since ‘they are not money.’ As he wrote, if companies are willing to become banks, they should seek a new Banking Charter and become a subject of all banking regulations.
However, it is important for the U.S. to use all the tools that they have if they are willing to remain as superior in technological development.
The U.S. needs to approach this situation like they have done previously, with major technologies that raise significant public policy questions. To develop a structured blockchain approach, the Trump Administration needs to convene policymakers, CEOs, technologists and other experts.
Outcome for China
The best thing that China can get out of this is an economic advantage. The more China tries to develop the technology, the better its learning capabilities will become.
The challenge for China, however, will not be to develop a specific technology, but rather to figure out where to use them. For example, it was noted by China’s Academy of Information and Communications Technology that out of the 80,0000 blockchains launched, only eight percent were still active.
Today, China works hard for technology supremacy, spending millions of dollars to develop anything from biotech to artificial intelligence.
The outcome, however, still seems to be unclear. Technological leadership in today’s world can give a lot to a nation, that’s why it is important for a country like the U.S. to keep on working on the development of such an important field.
China has already managed to become the world’s leading trading nation. Now, the main aim for China seems to be to create an alternative to a dollar and to create a system that would not be able to be disrupted by the U.S.
The U.S. needs to be more active in this field if they want to ensure that their prospective lead in this direction is guaranteed. For several times in the past, the U.S.’s technological lead was under pressure from different countries, including the Soviet Union during the cold war, but from most of them, United States was able to come out with a win.
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