Raymond’s Chan first article about blockchain and the network effect was first published in 2018. However, since then there has been an extraordinary growth in blockchain development, especially in China. For example, in mid-may, China has held 19% of the world’s total of 3924 blockchain patents and is ranking the third after the US and South Korea.
What Are the Causes?
If you are wondering how China became so “aggressive” in blockchain technology, is all about its political status versus the US and Russia. That is why China has chosen the blockchain infrastructure that has peer-to-peer commerce nature in a trusted environment. Blockchain infrastructure is an excellent position to replace and run an alternative channel than the old-fashion payment and messaging technology that can be blocked for any reason.
Besides, four years ago, the government has already included blockchain technology into the State Council’s technology blueprint. A pilot programme has begun which will create a digital currency of the yuan. The programme will be tested during the Beijing Winter Olympics in 2022. The only difference will be that the reader will not compare this new digital currency with cryptocurrencies like Bitcoin and Ethereum.
The Network Effect
China’s advancing in blockchain technology triggered the network effect where it will be used in many case studies. Today, our internet is widely opened, and unfortunately, it cannot protect everyone’s data and privacy. Besides, middle platforms or sharing-economy businesses like Spotify or Facebook are taking advantage of people’s creative contents. However, blockchain has a peer-to-peer decentralised commerce nature, and this “modern internet” is giving a new definition to the Internet.
The use of the new digital currency in China is just the beginning of the blockchain. Another example of the network effect is the blockchain-backing tokenisation of virtual goods in gaming. Here, the game providers offer to their players the chance to interact closer than ever. For example, some casino gaming operators can offer unique digital accessories on blockchain for players. There is a “smart contract” facilities that are provided by some blockchain networks, such as Ethereum which allows for some agreement creation which will be executed when certain conditions are met. This is very useful when it comes to authorising one game to react to digital avatars, create compulsion, or provide additional in-game boosts to enhance the gaming experiences for a new generation of players.
Besides, players will be better equipped to have more control of the games while playing. The features that allow in-game strategies will engage players for a more extended period of gaming on devices which will help the casino grow in popularity and trustiness. Besides, having a digital avatar can also allow the casino operator to have online-to-offline marketing which will be helpful for the player even when it left the casino floor, for example.
What Will Be The Future?
For now, the future will be based on the idea of a chicken-and-egg idea: the supplier won’t join the new ecosystem til there is a demand. The problem is that the request may be challenging to prove since it needs a real supply. For this apparent reason, China is pushing for an immediate need for technology. This push will give a chance for new business opportunities where they can innovate, and everyone loves to have innovation.
Besides, even Abraham Lincoln used to say that the best way to predict the future is to create it. Innovative people are interested in blockchain and emerging technologies.