Public Blockchain is Poised to Show its Potential for Business
Public Blockchain is Poised to Show its Potential for Business
In a policy statement issued last year, the Hong Kong Government recognized Web3 as a megatrend with the potential to become the future of finance and commerce. It allocated HK$50 million in this year's Budget to bolster the local Web3 ecosystem and launched a Task Force on Web3 Development in June to promote innovation and growth in the sector.
The next iteration of the internet, Web3 is decentralized, secure, and transparent, with blockchain technology as its foundation. Blockchain technology was previously associated primarily with cryptocurrency, but the conversation has now shifted to include commercial applications too. Indeed, Hong Kong's political, business, and technology communities continue to drive awareness of blockchain technology and its potential to solve challenges in finance, trade, business operations, and daily life.
Experimenting with new concepts on blockchain
Put simply, blockchain is a shared ledger that is both "unalterable" and "decentralized", making it useful for many public and private organizations. However, experimenting with applications on the blockchain is not without its challenges.
At present, Ethereum is the main platform for application development, but the cost of conducting a transaction or executing a contract on the public Ethereum blockchain can vary widely as costs are tied to fluctuating cryptocurrency prices and supply and demand on the network. This volatility can make Ethereum less suitable for commercial applications.
In contrast, private blockchains are invitation-only networks that offer higher levels of privacy and more stable pricing. While this can be appealing, the huge investment required to establish a private blockchain is a major roadblock for many organizations. Nor is the use of a private blockchain conducive to the popularization of blockchain business applications.
A third option is a public blockchain that bypasses the volatile cryptocurrency market. Among the companies exploring this space is Red Date Technology. It had integrated three non-crypto public blockchains, based on Ethereum, Cosmos, and PolygonEdge, on the BSN Spartan Network where organizations and developers can build applications while benefiting from fixed fees as well as immutable transaction records.
Benefitting from tokenization and smart contracts
This type of public platform makes it easier for different sectors to nurture innovative applications based on technologies such as "tokenization" – a method of protecting sensitive data that can be applied to assets via a blockchain to create Non-Fungible Tokens (NFTs).
NFTs have the ability to reflect ownership. Pixel art was a popular early example, but many tangible assets have the potential to be minted into NFTs, including real estate. The investment threshold for real estate is generally high. By segmenting the equity of a real estate asset into NFTs, investors are able to purchase part of a property instead of the whole property.
Trading tokenized artworks, real estate, and even bonds is conducted via smart contracts. Smart contracts are self-executing computer programs that automatically carry out certain actions when predefined conditions are met. When an NFT is minted, ownership is assigned through a smart contract on the blockchain, which also records the conditions that trigger ownership transfer and cause the smart contract to be updated with the new owner’s details.
The potential applications of smart contracts are very broad. For example, FUJIFILM Business Innovation Hong Kong (FUJIFILM BI HK) has leveraged Red Date Technology's public blockchain platform to successfully tokenize digitally signed documents and use them to trigger secure payments through HSBC's patented DLT Settlement Utility (HDSU) technology. This could allow enterprises to automate transactions, payment notifications, and auto-renewals or terminations through smart contracts, helping to improve efficiency and reduce costs.
Smart contracts can also be used in car dealership transactions, registering a new vehicle with its owner and allowing subsequent buyers to check ownership and car maintenance records stored on the blockchain.
Building an ecosystem to explore new technologies collaboratively
Many blockchain applications are still at the preliminary trial stage. Even so, the potential benefits of the technology for society are such that exploration is continuing at pace.
FUJIFILM BI HK has long been working with different industries to explore forward-looking applications of new technologies and bring innovations to business. Through ongoing cooperation with large corporates, we are achieving major breakthroughs in the business field by enabling the certification of tokenized documents on the public blockchain.
FUJIFILM BI HK values an ecosystem approach that brings together business, government, and academia to spark innovation and promote the application of new technologies. For example, we are one of the founding members of the Institute of Web 3.0 Hong Kong established this year to unite industry leaders, FinTech companies, academic researchers, and other stakeholders in order to promote win-win cooperation, bring about technological change, and upgrade local industry sectors.
This initiative supports “driving development”, which sits alongside "proper regulation" as the Hong Kong Government's twin pillars of Web3 development. It also reflects FUJIFILM BI HK’s belief that a solid technological foundation is needed to enable industries in Hong Kong to explore blockchain applications. Looking ahead, public blockchains will not only be integrated into different solutions, but will also promote innovation in business activities and benefit society as a whole.