China is working on creating a Digital infrastructure to support data analysis with which to reinforce the Chinese Communist Party’s control over the nation’s population. The latest move by the Chinese government has been the creation of an NFT infrastructure network with geopolitical control objectives.
Due to its nature, when someone buys an NFT they get a code that links it to their digital wallet. This means that it works as a kind of digital receipt, recording the information of its owners on the blockchain, so that anyone can see the history of ownership of the asset.
Chinese officials do not use Web 3 technology as such (blockchains and decentralized applications), but rather use the Blockchain-Based Services Network (BSN), a project developed on the blockchain under the supervision of the State Information Center of China, with the idea of implementing identification NFTs in its functionalities.
China against commercial NFTs
While studying the implementation of this type of NFT on its own network, The Chinese government has banned the sale of any type of NFT trading platform that runs on standard networks like Ethereum. The ban usually falls on tech companies like WePay, which suspended the accounts of users who bought NFTs.
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NFTs as digital certificates
Unlike other blockchains that allow any anonymous user to freely and anonymously operate their nodes, the BSN will work differently. In this sense, it will have the following Distributed Digital Certificates (DDC), a kind of NFT that will verify the identity of all users operating a node.
The BSN will also run on a decentralized ledger, although it is not permissionless. To be a software developer on BSN, users must They must register and have a DDC as a business license.
In fact, the Chinese government has dubbed its blockchain “an open permissioned chain”. This means that anyone can build applications on it, but only if they have the permission (DDC). In addition, the BSN has two versions: one for Chinese users and another for foreign users.
Foreigners will not be able to use any cryptocurrency to buy their DDCs, but will have to do so in yuan, so they will be forced to forced to connect to a Chinese financial institution to carry out the transaction.
BSN officials have said they aim to mint billions of NFTs a year. However, they will have nothing to do with art or video games, but will instead be certificates for managing user accounts.
Chinese Government NFT Use Cases
The BSN CEO offered examples of the use cases that these Chinese NFTs could have, giving a very simple example: motor vehicles.
In this sense, all countries in the world have a traffic department, where motor vehicle data is centralized. Selling a car or renewing a driving license requires sending information, which in many cases forces us to go to the traffic office.
Data transmission will be much faster and more efficient if it is converted into an NFT, with multiple pieces of information implemented and controlled by multiple private keys. To improve transparency, all data is stored on the blockchain.
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While at first glance it may seem like a mundane use case, the truth is that recording the data of all vehicles would allow the Chinese government to control the movement of citizens, prohibiting access to certain places to certain people or vehicles.
In fact, the idea is that it is not a single NFT that contains all the information. The Chinese government intends for the BSN to have compartmentalized and linked information. In this way, it is possible that there will be an NFT with the license plate and car data, which will be linked to another containing the driver's speed records, fine history, as well as biometric information (facial recognition, etc.).
More control over world trade
On the other hand, this blockchain infrastructure also seeks to strengthen China's control over international trade. In this sense, the government wants to promote the creation of "smart customs" to control digital trade. The DDC and the BSN could be a tool to obtain this control.
This push for digitalization and support for blockchain technology aligns with President Xi Jinping's statements that “Data is the new factor of production”. China’s strategy is to leverage data as a power source for its new economy.
On the other hand, China wants its own developers to take control of the creation of the blockchain on a global level. This is because they believe that, in the same way that the United States has controlled the Internet, since its developers were the ones who shaped the original network, China can control Web 3 if they are pioneers in the development of stable technologies.
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