China is leading global blockchain adoption for digital transformation
Distributed ledger technology (aka blockchain) is catalyzing a long-term shift of trust in distributed business environments worldwide. Chained data blocks make assets traceable, cryptography enables trusted ownership, and consensus algorithms realize distributed business consistency. In the meantime, the critical challenges that COVID-19 pandemic brought to the global economy -- such as supply chain financing, food traceability, and visibility into asset logistics -- further prioritized blockchain adoption for digital transformation.
In the past six months, Forrester has comprehensively researched blockchain adoption in China. The key finding is this: Strategic investments in digital transformation by the government, enterprises, and vendors have propelled China's blockchain adoption ahead of other regions.
- China is entering the age of blockchain 3.0. In the past decade, China's blockchain market has undergone two periods of development. In blockchain 1.0, pioneering firms largely focused on digital currency applications; in blockchain 2.0, visionary enterprises and vendors began to gain business value by piloting blockchain technologies. Since the second half of 2019, the prioritization of enterprise customers, the technology progress made by tech leaders, and the pragmatic measures taken by the government have been driving the Chinese market into the age of blockchain 3.0 -- when blockchain adoption gains momentum in all major verticals.
- Vendors in China are advancing their technology to address enterprise needs. To address the needs of enterprises for performance, scalability, privacy, and security, Chinese firms have made strategic investments in blockchain R&D. Leading vendors like Ant Group, Baidu AI Cloud, EY, Huawei, Neusoft, OneConnect, PeerSafe, Tencent Cloud, and WeBank have made substantial progress in blockchain technologies, including asymmetric encryption, zero-knowledge proof, homomorphic encryption, and consensus performance.
- Blockchain is transforming all major verticals in China. Blockchain is transforming existing business operations and enabling new business models within the digital ecosystem across all major industries, including banking, insurance, healthcare, energy, government, manufacturing, retail, telecommunications, and logistics. Specifically, financial services firms prioritize process transformation for effectiveness and trust; traditional verticals aim to drive innovation and improve collaboration; and governments focus on service experience and social trust.
- The enterprise blockchain platform (EBP) market in China is gaining momentum. EBP vendors play key roles in driving business application and technology advancement in China. These vendors fall into three categories: software vendors, cloud service providers, and consulting service providers. EBP software vendors provide on-premises software to power blockchain initiatives; EBP cloud service providers offer blockchain as a service to jump-start innovation; and EBP consulting service providers tailor blockchain solutions to customer needs.
To understand the business and technology trends critical to 2021, download Forrester's complimentary 2021 Predictions Guide here.
This post was written by Principal Analyst Charlie Dai, and it originally appeared here.