China has proposed new regulation to provide real names and national identification number to register for blockchain service. The draft regulation is against the main advantage of blockchain: privacy and anonymity. This kind of control is not unusual; for instance, WeChat Pay, china mobile payment, requires the user to use a real bank card or national ID to use the service.
After the mass adoption of the internet, millennials and even cities can no longer operate without an internet connection. We live in a world which our devices are constantly connected to the internet and data harvested is stored in the cloud – a centralised institution/intermediary. This has kicked in fresh arguments on the rights of ownership over data; should the data collected belong to the user or the institution?
Web 3, is the new web which aims to eliminate the intermediary and disrupt the data monarchy. With the use of cryptography and game theoretic incentivise model, blockchain is able to move data silos to a more decentralised structure. Mainframe, for example, uses the immutable and consensus-driven properties of blockchain and along with metadata encryption to protect the privacy of the users.
Mick Hagen, CEO of Mainframe shared with Wachsman his view on the suggested regulations:
“While the recently proposed Chinese legislation would impose prohibitive ID rules for blockchain service providers throughout the country, it is unlikely that such requirements would serve as anything other than yet another stumbling block for mainstream adoption. Simply put, these rules, no matter how tight, cannot definitively stop the immutable and censorship-resistant nature of operating blockchain networks, such as Ethereum. The existence of legislation that attempts to drastically censor blockchain networks is a signal that lawmakers still do not understand what the base concepts of decentralization, i.e., you can’t halt a globally-run ledger through national means. Requiring citizens to publicly name themselves on a blockchain ledger goes against the entire ecosystem of decentralization, and the purpose of blockchain to begin with.”
Even though the dragon of Asia has banned the trading of cryptocurrencies, but it is not illegal to hold crypto-assets like Ethereum and Bitcoin. Moreover, a landmark case in China has recognised blockchain-based evidence during court proceedings. The Chinese regulators also welcome feedback on the proposed regulation.