On June 21, around 20 institutions including Tencent Security, token trading platform Huobi.com (火币网), and China Blockchain Research Center (中国区块链应用研究中心), together established the China Blockchain Security Alliance (中国区块链安全联盟). The announcement was made during the first China Blockchain Security Summit (中国区块链安全高峰论坛) in Beijing.
The Alliance’s mission is to ensure the healthy and sustainable development of the blockchain ecosystem and protect it from fraud. “We are willing to participate in blockchain’s industrial construction in the name of Tencent. We hope to contribute to blockchain’s security in China,” Ma Bin, vice president at Tencent said during the Summit.
ICO mania and commercial blockchain concepts have been attracting massive attention in China. Additionally, expectations for blockchain’s performance from the National Audit Office and other state institutions have prompted greater interest in both the technology and the investment behind it.
In 2017 alone, China applied for 225 blockchain patents, almost two and a half times more than the US’ 91. Research (in Chinese) shows in the first month of 2018, China’s blockchain industry received RMB 680 million worth of investment. According to a source with knowledge of the matter, the figure would be higher if tokens, cross-border investment transfer, and other “grey area” investments were included.
In the first half of 2017, before China’s central bank banned ICOs for financial security reasons, blockchain financing reached RMB 2.6 billion. In March 2018, the average monthly wage for a blockchain-related employee was RMB 25,800.
The lucrative rewards amid blockchain mania have led to instances of fraud. From March to April 2018, a pyramid scheme (in Chinese) attracted over 13,000 members and accumulated more than RMB 86 million in 18 days by playing with the concept of blockchain and “no loss” cryptocurrency investment.
Early in 2015, a token scheme (in Chinese) started in Fujian province raised over RMB 2.1 billion in less than 12 months. Its fraud map covered 24 of the 34 provincial territories in China and included around 900,000 members. The pyramid scheme had 253 merchandise levels.
The Alliance’s initiative will provide positive support to standardize the blockchain industry. However, the question of implicit potential technological monopoly remains unanswered. As the Summit involved leading tech giants and active blockchain industry participants, the Alliance may become a collective power that can influence industrial standard setting and resource allocation.