Chinese Central Bank Hails Blockchain Application, Discusses Token and Smart Contact : cardano
The People’s Bank of China is the central bank of the People’s Republic of China responsible for carrying out monetary policy and regulation of finance
As China introduces blockchain technology to the financial platform in Xiong’an New Area (a development hub for the Beijing-Tianjin-Hebei economic triangle), the People’s Bank of China(PBC) recently recognises the application of blockchain in some industries in its working paper.
The People’s Bank of China is the central bank of the People’s Republic of China and is located in Beijing
The article mainly studies the economic functions of blockchain by explaining blockchain technologies from an economic perspective, analysing the functions of smart contract and the performance and security of blockchain systems.
The analysis holds a positive attitude towards tokens’ function which is based on machine consensus. Tokens can be directly used as a payment tool in exchange for commodity or service inside or outside blockchain. A token’s function can also be defined by the rules within a certain blockchain. Besides, whenever transactions happened, the UTXO of different parties can be updated at the same time.
Thus as tokens are traded, no trusted third party need to get involved and it wouldn’t cause risk to the capital on the way or the transaction itself, which differs from the peer-to-peer network where the false date, evil attack and out of syndication always happen.
There is a description in the analysis of blockchain’s ability to effectively track the origin of statistics. It is because any modification in the blockchain is not allowed, which not only supports auditing but also lowering the risk of the operation.
Zhong Xu, a reseacher at the People’s Republic of China and one of authors of a working paper recently released by the PBC recognizing blockchain technology
Authors from PBC summarised that blockchain can provide more solutions for the banking and finance industry in China especially for the creative application in digital receipt.
As for the blockchain applications not involved with tokens, the public ledger helps solve the information asymmetry between participants and promote productivity. In that case, the paper suggests that a consortium blockchain will better suit this kind of applications than a public blockchain. It is because a consortium blockchain is only open to authorised nodes which jointly maintain the consensus. Evil attacks will harm their reputation which discourages them from adding false information to the blockchain.
It goes further discussing the smart contract in terms of its functions like the property right, processed related to tokens, vote, mortgage, frozen assets, etc. The smart contract can be able to support the complicated function of management.
The paper also pointed out that over the past decade since Bitcoin was launched in 2009, DApps were mainly applied in the industries like the game, lottery, crypto asset trade, etc., instead of the entity economy. Blockchain technology hasn’t been fully utilised and there’s still a long way to go.
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