Progress in technology is perpetual. For decades, the world has been experiencing a new dynamic of technology engineered to boost several aspects of business and the market. Right from agriculture to manufacturing to the service sector, almost every business is highly dependent on technology. The tech space is such that the developments are getting spectacular with every passing day as developers, scientists, and governments are working toward it tirelessly.
Blockchain is one such technology that has caught pace these days and is recognized as one of the most influential and popular technologies of this era.
While the agenda for this article is to understand the increase in Chinese Blockchain investment in comparison to that of the States, let us get back to the basics and very quickly understand the essence of blockchain as a technology.
What is blockchain?
The brainchild of Satoshi Nakamoto (a pseudo name for a person or group of people), blockchain undoubtedly is an ingenious invention. In simple terms, “blockchain is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by a single entity.”
Considered as the most promising and revolutionary element of technology, blockchain has gained popularity because it reduces risks, stamps out fraud, and adds to the transparency quotient of transactions in several scalable ways.
Also referred to as Distributed Ledger Technology, blockchain happens to be the backbone of bitcoin, the first-ever cryptocurrency invented to address the issue of double-spending by eliminating the need for a trusted authority or central server.
So, what makes blockchain special, and why is it considered as a technology with industry-disrupting capabilities?
Engineered to operate without a central authority, blockchain is the most apt definition of a democratized system. Additionally, this technology is a shared and immutable ledger; anyone can view the available information. Therefore, anything that is developed on the blockchain is transparent, and everyone involved remains accountable for their actions.
Now that we have taken a brief look at the concept of blockchain, let us dig deeper to understand the rise in Chinese blockchain investment in comparison to the US.
“China holds more blockchain patent, but the number of US companies invested in blockchain is greater.”
As per the report compiled by CB Insights, a research firm based out of New York, it is explained that China is rapidly gaining pace with blockchain investments and is catching up with the US.
Interesting statistics
As per a study, in 2019, China accounted for 22% blockchain investments compared to the 31% mark by the US. This figure indeed is promising compared to 2015, when China was at a paltry 2%, whereas the US was at 51% of the total funding.
Talking about the trade dispute between these two countries, the competition between them has only intensified. Well, this isn’t surprising considering the power of the two largest economies in the world.
Basis the dispute, the CB Insights findings firmly suggest the increase in intensity between the US and China even in the blockchain spectrum. However, it does not showcase a clear picture of which country is ahead in the blockchain development.
Can you guess which country is leading?
Even though there are reports out, it is not very clear to understand which country is leading in the blockchain investment space. And the confusion can be expressed right here, based on a report by CB Insights that has witnessed a global blockchain investment volume of approximately USD 2.8 billion in 2019 compared to USD 4.2 billion in 2018.
Additionally, Rhino Data and China’s state-run financial media firm, Xinhua, collected information on Chinese blockchain investment deals, which worked out to be USD 3.44 billion for 245 deals in 2019. The surprising part here is that these figures clearly mention a 40.8% drop in investments compared to the 2018 statistics.
Experts add that the majority of Chinese investments are local; however, a rise in foreign funds is expected in the near future.
As per Kevin Shao of Bitrise Capital Partners, “Currently, the main investors are mainly domestic venture capital institutions and individual investors as early-stage investors. However, we believe that with the increasing internationalization of Blockchain technology, the percentage of foreign investment institutions will increase over time.”
What is the government doing to shape up blockchain in China?
Chinese President Xi Jinping, in October 2019, strongly supported the blockchain technology and encouraged the country to make an essential breakthrough in the independent innovation of core technologies.
As per Consensys, a blockchain software technology, China holds more than 500 blockchain projects, and the government runs a majority of them.
Not just this, but to encourage this technology, the People’s Bank of China is in the process of introducing the digital Yuan, which will be powered entirely by centralized blockchain.
Conclusion
Even though there are no reports readily available that focus on the blockchain investment that happened in the US in 2019, the figures obtained by CB Insights showcase that Blockchain in China is speeding up.
As per a report by IDC (a global market intelligence company), China’s future of blockchain-based technology business is speculated to increase with great force in the coming years. The report states that the country is all set to spend a whopping USD 2 billion or more in this genre by 2023.
Therefore, comparing the Chinese rise in blockchain investments with the US is like comparing apples to oranges.
