In recent days there are two reports prepared in the background of China’s central bank, the People’s Bank of China (PBoC), have been released. One of them was developed by Xu Zhong, director of the Research Bureau of the PBoC. This paper states that “There are few blockchain projects that really land and produce social benefits. In addition to the low physical performance of blockchains, the shortcomings of blockchain economic functions are also important reasons. It should be based on continuous research and experimentation. Rationally objectively assess what the blockchain can and cannot do.”
The paper also criticizes “tokenization” process that always follow the development of many blockchain projects. The author concludes that such tokenization often lead to the offspring of crypto “financial bubbles.” Such thesis became not only theoretical one but it came to real life since PBoC decided to strengthen control over tokens aidrops since it’s found out in thess processes loophole for banned ICOs.
Another report “What Blockchain Can Do and What It Can Not” developed by CW Zhou who is Harvard Manson Fellow. Interestingly that despite of criticism his report contains Zhou has recently joined Bitmain as chief economist. The main takeaways of report as follows: “Not a single tech innovation has disrupted financial system so far, Blockchain won’t be an exception”…“crypto currency’s supply isn’t flexible, lacking intrinsic value/sovereign credit collateral”… “so it won’t disrupt fiat or replace it effectively.” The main points are also as “Blockchain application has to be practical, it’s not about being idealistic orthodox”… “Using technology to replace institution and trust is extremely hard, mostly a utopian fantasy”… “There is no hard line between centralization and decentralization.” There is interesting that “token” is the only English word that it kept using in English while whole report was being written in Chinese. This fact come out from the reality that there is not a single relevant word in Chinese to translate “token” accurately in the context of blockchain.