CoinEx Insight: Blockchain Application Thrives in the Corporate World as the Sector Welcomes a Drastic Increase in New Patents
Since September, with regard to cryptocurrencies, the major exchanges have announced that they will exclude the existing users from China as the country tightens its regulation for the blockchain and crypto sector. However, in the corporate world, blockchain applications by industry giants have thrived. In 2020, China saw 11,880 patent applications relating to blockchain, an increase of over 41% year on year, according to the National Bureau of Statistics. Based on the 2021 Global High-Correlation Authorized Blockchain Patents (Top 100) (hereinafter referred to as the report) jointly released by the intellectual property research institution IPRdaily and the research center of innovation index incoPat, China has taken 55 spots in the list. Moreover, seven of the top 10 companies, ranked by the number of authorized blockchain patents, are from China.
As of August 31, 2021, the Internet tycoon Alibaba ranked first in the list with 1,252 authorized blockchain patents, which is greater than the combined total of the next four companies. Apart from China, the blockchain sector has boomed across the globe. In 2020, companies around the world spent $4 billion on blockchain development, which nearly doubled year on year, according to the 2021 Panorama of Global Blockchain Technologies.
An incomplete list of blockchain undertakings by the industry giants:
Nearly all the international business tycoons have launched BaaS and BCS on open-source platforms such as Fabric and Ethereum. Although the blockchain services launched by the giants include public blockchain, consortium blockchain, and private blockchain, most of them are consortium blockchain. This is particularly true with regard to the blockchain applications they launched: Companies around the world have focused on consortium blockchain in the development of blockchain applications. What makes consortium blockchain so popular? The answer is that consortium blockchains bring great convenience in terms of B2B (Business To Business) operations.
1) With semi-decentralization and strong data privacy, consortium blockchains are highly suited for commercial adoption
On public blockchains, the transaction data is open to all. In contrast, consortium blockchains limit the participants and the access to on-chain data. They can determine who will be allowed to set up nodes and deploy smart contracts. In a nutshell, on consortium blockchains, only business associates and stakeholders can obtain access to data. In the real-world application of consortium blockchains, in addition to B2B cooperation where privacy protection of commercial data and intel is required, most data relating to the national economy and people’s livelihood should not be publicly disclosed, such as data concerning healthcare, political affairs, and military intelligence. As such, through limited participation and access, consortium blockchains enable convenient and secure access to on-chain data while offering strong privacy protection for commercial and civil data.
2) Low cost & high efficiency
For the simplest example, in China, both public and private hospitals develop the medical history system independently, and the relevant medical data are isolated. This means that though a patient has gone through systematic examinations and treatments at hospital A, once he switches to hospital B, his medical data obtained at hospital A will become completely unavailable. If this patient has lost the physical medical record and examination sheets, then he will have to pay additional fees for re-examination. Furthermore, in China, the isolation of medical data also makes nonlocal medical treatment and healthcare reimbursement & settlement extremely complex and difficult.
If hospitals want to connect their medical data, new systems or new interfaces must be developed, bringing enormous development costs. However, if the medical data system is designed using consortium blockchains, the input and connection of data will be conducted on the same modules, which will save huge costs regarding the development of medical systems at hospitals.
Apart from hospitals and companies, provinces and cities can also save plenty of costs if they connect the systems of political affairs, social security, and housing provident fund through consortium blockchains. In 2019, the Ministry of Housing and Urban-Rural Development and China Construction Bank built a consortium blockchain for the housing provident fund that has achieved the interconnection of the housing provident fund management system in 491 cities nationwide. This demonstrates the convenience brought by the adoption of consortium blockchains.
3) Consortium blockchains feature enhanced security
Due to the highly decentralized nodes, public chains are subject to forking and double-spending attacks. Meanwhile, their high service fees and slow confirmation also make the network frequently congested. These are all enormous risks of uncertainty for companies that pursue efficiency. In contrast, consortium blockchains limit the participants and nodes and come with faster processing of transactions. As such, their on-chain security is more certain than public chains.
4) Consortium blockchains are less risky policy-wise as they do not require the issuance of tokens as the incentive
The blockchain sector has kept growing despite the lack of acknowledgment in many countries. Why is this the case? The answer is that though the issuance of tokens may disrupt the financial system of a country, blockchain brings forth technologies with practical implications that can achieve the low-cost recording and transmission of data for businesses, civil departments, non-profit undertakings, and systems of political affair. Hence, consortium blockchains and private blockchains are encouraged and not restricted since they do not issue any token.
Other than B2B projects, the consortium blockchains developed by business tycoons have pursued B2C commercial undertakings. From Alibaba’s AntChain to Tencent’s Huanhe (literally means phantom core) built on the Zhixin Chain, to engage with NFT collectors, the giants have launched NFTs, which have been extremely popular in the last two years. Even TikTok joined the game. On September 30, the company announced the TikTok Top Moments NFT series and invited NFT artists to render the viral TikTok short videos into NFTs, which were put on sale on October 6. However, TikTok did not develop any consortium blockchain for the launch of its NFTs. Instead, the six exclusive viral video NFTs are released on Ethereum, while the limited edition of the TikTok NFTs is powered by the NFT L2 protocol Immutable X. Apparently, TikTok’s blockchain undertakings are more successful than those of its Chinese peers.