China is a powerhouse when it comes to Bitcoin trading. According to a report published by Goldman Sachs last March, about 80% of Bitcoin transactions are driven by the Chinese yuan. However, awareness around Ether, another cryptocurrency, is much lower.
“Bitcoin was a great experiment in monetary policy,” says Andrew Keys, the Head of Global Business Development at Consensus Systems (ConsenSys), a venture production studio for blockchain-based applications and tools.
“What it proved was that I can send you a Bitcoin without a bank,” he says. “Ethereum […] can do peer-to-peer agreements.”
Ether is the cryptocurrency used on Ethereum, a blockchain-based software platform that came five years after Bitcoin. While Bitcoin was designed primarily for peer-to-peer monetary transactions, such as payments, Ethereum was invented to fit a much broader context. Any software application can be uploaded onto Ethereum’s decentralized platform: housing rental, equity distribution, voting, and more. The Ethereum Foundation calls it a “programmable blockchain.”
Put another way, Ethereum is a way for software programs, or what are known as ‘contracts’ on Ethereum, to execute the way they were programmed to without interference. That means that two parties can agree on and be held to a digital contract without lawyers, the police, or any kind of intermediary. Trying to change the contract or take it down would be almost impossible, as contracts on Ethereum are stored on a distributed network of servers – the Ethereum blockchain.
ConsenSys wants to bring Ethereum to China’s tech and finance giants, such as Tencent, Ping An, Ant Financial, and Alibaba.
“Every single one [of them] is open to a proof of concept, where we give them a private instance of the Ethereum blockchain,” says Mr. Keys.
For Chinese companies and financial institutions, such as banks and insurance companies, the lure of Ethereum lies in its potential to cut costs. But Ethereum’s blockchain could be useful in other contexts as well. ConsenSys is working on about thirty different decentralized applications – or ‘dApps’ – for Ethereum’s blockchain. They range from event management to online poker, to a smart music contract dApp that musician Imogen Heap used last October to release one of her singles.
“Over the next month, we’re going to do webinars and demonstrations with the CTO and technical teams of all those companies I just mentioned,” says Mr. Keys. “We kind of show them the art of the possible, then from that they say, ‘Okay, we have a pain point here and a pain point there – can we apply the technology to ameliorate those pain points?’”
“When we come back [in September], we’re going to further elaborate on how we work together,” he says. That could include joint ventures or something simpler, where ConsenSys educates its partners on Ethereum and gives them the infrastructure to build their own Apps, he says.
The meetings are still in early stages, but ConsenSys is serious about putting down roots in the Chinese market. Founded in 2014, the company has moved quickly through its partnership with Microsoft and its Azure cloud computing platform to discuss and seal deals with other companies.
In China, the buzz around blockchain technology is starting to pique interests among tech companies and financial institutions. In June, a group of more than thirty technology and financial firms, including Ping An Bank and Tencent, created a consortium dedicated to blockchain applications. A month before that, a non-profit called ChinaLedger Alliance launched with the aim of promoting blockchain technology in China. The non-profit is led by Wanxiang Blockchain Labs, a Shanghai-based non-profit by Chinese auto conglomerate Wanxiang Group.
Image credit: Ethereum Foundation