Baidu made headlines briefly during the week with the announcement of their new blockchain platform – named Xuperchain (Superchain, in Chinese). Baidu, China’s most dominant search engine, comes in at #50 on Forbes’ Top 100 Digital Company Ranking and boasts close to 200 million daily active users, despite their recent struggles. They follow a string of high-profile companies launching blockchain platforms, including Tencent, JD.com, and Facebook.
The Xuperchain website displayed some impressive stats, including the fact that since being open-sourced in the Spring of 2018, it has had 3.5 million users and 450 million transactions. It listed having multiple consensus algorithms, led by Delegated Proof of Stake (DPOS) and smart contracts written in either Solidity or Go. It also boasted of having main chains, parallel chains, side chains, and DAG capabilities with a max TPS of 20,000 transactions per second. What’s not to like?
Too good to be true?
And while the well-researched Redditors on r/Neo were commiserating the impending doom of public blockchain projects in China, we were left wondering what the actual impact of this announcement was? Considering this is a company whose stock price is over 50% down from its peak of $284 in May of 2018, there were many question marks surrounding the announcement. Speaking with three blockchain experts in China, we gained some valuable insights.
One smart contract developer working in Beijing noted that this “announcement” was par for the course considering China’s recent heavy approach to blockchain technology. He reminded us that companies like Alibaba, Huawei, and many others were scrambling over themselves to announce blockchain platforms in the wake of President Xi’s big announcement back in October. This isn’t a phenomenon unique to blockchain – it happens with AI, 5G, and every other emerging technology that shows promise. And while these companies have incredible amounts of resources at their disposal, they lack the focus and priority that a smaller, more agile company might possess.
A second expert, heavily involved in the Shanghai blockchain scene, was even more unimpressed. He hadn’t even taken the time to pay close attention to the announcement, seeing as how every large existing tech company in China had registered a blockchain-as-a-service platform, with little real world adoption to show for it. He suggested that the media fanfare that accompanied this was due to some high-profile media sources picking up the story, likely in an attempt to further impress pro-blockchain leadership.
A third and final expert, also a blockchain developer, was more complimentary of the progress the tech team had made when scrutinizing the documentation. In particular, he credited the team for improving the UTXO and database protocols that helped to speed up the blockchain. Still, announcing a blockchain project has never been the hard part, as evident from the estimated 32,000 registered Chinese companies using the word “blockchain” according to a CCTV report in November of 2019.
Unrealistic Goals for China’s Tech Giants
So what can we make of all this? Certainly, Baidu could pose a competitive threat to companies like VeChain in China, where Baidu’s influence and name recognition allow them to target top developers and big name partners. But in reality, these tech giants rarely miss an opportunity to make a headline: Let’s not forget Baidu going full-force at a number of new industries, including the short-lived Baidu Smartphone, the Baidu Apollo Smart Car (now facing massive losses and lay-offs at factories), and every other flavor of the week industry that they hurled themselves into. Technode estimates they lost RMB 2.3 billion on smart speakers alone. Without being too critical, Baidu will continue to excel at its core offerings, and will make some unexpected inroads into new markets, but will lack the finesse and understanding to penetrate technical areas such as the public blockchain space.
In many ways, their recognizable branding should continue the growth of blockchain adoption in China, bringing more exposure to the technology. It should serve as nothing more than a subtle reminder that for projects like VeChain, time is of the essence, a fact that CEOs like Sunny Lu is already 100% aware of.
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