In recent years, several companies have begun stepping up investments in blockchain technology. Meanwhile, governments are also getting into the act. China, for instance, is reported to be mulling the adoption of blockchain in public services.
Paul Fung, chief executive of PhotonLink, a Hong Kong-based firm that is involved in professional data network services, shares with the Hong Kong Economic Journal his views on blockchain, its development status in Hong Kong compared to other regions, the technology’s benefits and other issues. Excerpts from the conversation:
Q: What’s the definition of blockchain?
A: The public has a misconception about blockchain and they usually associate it with virtual currency.
We define blockchain as an open record book or database, which allows people to write entries into a record of information for real-time and secure data sharing. Each block in the chain contains data is cryptographically hashed. The enormous network of nodes ensures that such records cannot be easily changed.
Q: Is this an information revolution?
A: Simply speaking, the older computer system is like a mother leading a number of children. The central server is the mother, and terminal or regional servers are like children. In blockchain, everyone can be a mother and all data is stored in a decentralized manner. Decentralization is the core factor of internet’s success.
Q: Why are many big corporations interested in developing blockchain technology? Are they worried about the potential disruption?
A: Most of these companies are outside Hong Kong, as they have realized the world is changing and they also see the opportunities that might come along.
Yet very few Hong Kong people view block as the trigger for next internet revolution. Blockchain is changing the world now; mainland internet giants like Tencent, Ant Financial Services are applying the new technology to take their companies to the next level.
Undoubtedly, finance is quite profitable. But I’m not that optimistic about its growth prospect. Financial technology has own limits, and is subject to government supervision, Technology not only affects finance but also involves many other sectors.
The Chinese government will utilize blockchain technology for social taxation and electronic invoice issuance matters. Therefore, blockchain can also be used for trading platforms or connecting smart contracts.
Q: China intends to develop government affairs chain “GAChain”. How about the development in Singapore?
A: Singapore is more aggressive than Hong Kong. IBM opened a blockchain innovation center in Singapore in collaboration with the government. The government there has ordered all financial institutions to use blockchain technology in operations.
Singapore has dispatched experts to share experiences with Hong Kong last month. Blockchain is the main technology for next generation, and authorities should accelerate blockchain adoption. But Hong Kong has lagged far behind.
Blockchain is now just a digital ledger. Singapore hopes to bring it to new areas, and support different operation models, such as closed, semi-open or encrypted systems. It will be used in foreign exchange operations in next stage. Singapore has great ambitions.
Other nations are also actively developing the technology. But the Hong Kong government has yet to make any move.
Q: How do we persuade Hong Kong people to embrace blockchain?
A: People should be made aware that blockchain not only lifts transaction efficiency but also improves security and transparency.
We would be stuck with manual processing without blockchain. For instance, if we want to speed things up and shorten the waiting time in handling contracts, such information technology is a must.
This article appeared in the Hong Kong Economic Journal on Aug 11
Translation by Julie Zhu
[Chinese version 中文版]
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