On the 12^th of December 2023, China decided to announce their intentions in employing the use of blockchain technology to verify her citizens of about 1.4 billion in number. The verification included the use of real name identities to enable them to manage the database of real time citizens and monitor several activities of influencers online. According to coindesk, the announcement was made from the Blockchain based service network (BSN) in collaboration with China’s ministry of public security. A couple of questions have been raised as to why such a decision was made by the Chinese government. However, for the purpose of this piece, we will try to uncover the possible reasons behind the process and to decipher the possible impact such a decision might have on the country and the blockchain industry as a whole.

China’s current population sits at 1,425,449,995 according to worldmeter. Making China the second most populous country behind India. In their attempt to reduce overpopulation, the “one-child” policy was implemented from 1979 to 2015. So far, it is safe to say that the policy has contributed to the ageing population. With the advent of technology, China has been able to Urbanise over 60% of their citizens and more effort is being made to ensure an all-round welfare of citizens. China is said to be one of the most productive communist states in the world. This means, the country is open to all kinds of technological advancements including the use of Blockchain technology. Early exploration of the blockchain technology in China started as far back as 2011 when they had their first cryptocurrency exchange called BTC INDIA. Since then, the blockchain industry has thrived to the point of being utilised by the Chinese government.

WORKING PROCESS

Usually, Chinese citizens are required to register with a launched initiative known as REALDID. This of course creates an opportunity to provide real names and valid means of identity. Afterwards, the verification process of these documents are carried out by the public security ministry. After the verification process, citizens receive decentralised identifiers (DIDs) which serve as keys to gaining access to online services. These mechanisms set-up to enhance anonymity, which means users gain access to these services without having to put their names out. This is done via the use of private keys and DIDs

THE GOOD SIDE OF IT

There are a lot of positives to take from the Chinese identity initiative scheme. One of them is that due to the nature of the blockchain technology being used, public security is able to lighten up security around valuable data. The matter of impersonation and identity theft can be grossly curbed. Again, since various online services are accessed, it gives users an efficient feel and streamlines transactions being done online. Thirdly, since users can log in, they get to control what kind of information is made available to the public. This poses a lot of convenience as it offers secure digital identity for online service access.

THE BAD AND THE UGLY

The entire concept of decentralisation is being put into question seeing that the Chinese government has control over REALDID. The concern of data collection and misuse is something that cannot be swept underneath the rug. The problem of accessibility for ageing individuals is also a matter of concern. How about the not-so-tech educated people, what is their fate? This obviously means that certain vital information will be exposed all in the name of aiding the not-so-tech inclined people. China is known for their collation of data from all forms of sources. The problem of individual privacy rights would also be brought forward for addressing as it seems that many citizens, especially content creators might not fancy the new laws set in place. However, it's safe to say that China has got incentives that could be used to quiet down the problems that might likely arise as a result of the new regulations set up by the Chinese government.

Conclusively, the general concept brought forward by the Chinese government seems to be a significant step in digital identity management. However, the problem of privacy has to be dealt with, if other economic powers are to adopt this.