WATCH: China Telecom Introduces its Blockchain SIM Card Project

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In anticipation of China Telecom’s new blockchain SIM card project, Director of its Blockchain Research and Development Departments, David Wei Liang, peaks to Angie Lau, Editor-in-Chief of Forkast.News, about the reasoning behind embarking on the project, the product’s uses and implications, and the timeline of its adoption. 

The time is ripe for telecom companies to step up to the plate in the fast-moving game of blockchain technologies; Liang points out that “blockchain provides the new teleco paradigm for the Internet of Value… we, teleco operators, have to catch this historic opportunity.” One way in which China Telecom is doing so is with their blockchain SIM card, a “key to the decentralized world” which intends to allows consumers to manage their own private data, transferring, withholding, and sharing it with ease. 

Listen to the podcast version

China’s anti-cryptocurrency laws and regulations, which have been ramping up of late, do not stand to affect the project, or technological advancements in blockchain at large, because blockchain is distinct from its applications such as mining crypto. Furthermore, the SIM card will be able to “interact with various blockchains; both public and private blockchain, because the SIM card interacts with the blockchain nodes, and the nodes participate in various blockchains.”

Liang emphasizes that blockchain technology is one of China Telecom’s most “important technical directions,” and that there is much to look forward to from the space, particularly in conjunction with 5G and IOT technologies. China Telecom’s focus on blockchain is indicative of China’s potential to revolutionize the cryptosphere, starting with this project.

Key Highlights

  • “We incorporate the private key generation and digital signatures in the SIM card so that the SIM card can act as the door to the new digital economy.”
  • “This [SIM card] is the key to a decentralized world. People can use this to manage their private data. It is not only about the cryptocurrency but also their personal data… – they now have the key to manage their own data.”
  • “I think there is a very huge market and a strong demand for people and organizations to use blockchain SIM cards to protect digital assets and transfer values. So, I think this process will become a reality maybe in 1 or 2 years.”
  • “The key point here is to transform the digital economy from a data monarchy to a data democracy. That is to say, to give the right of the data to the data producer themselves. So this is also what we called Web Sweep 1.0. It is value sharing. It is an individual economy.

See related article: A Blockchain-Enabled SIM Card? How This Could Change Our Mobile Experience as We Know It


Full Transcript

Angie Lau: Welcome to this episode of “In Conversation With” on Forkast.News. I’m Editor-in-Chief Angie Lau, and I am here with David Wei Liang. He is Director of Blockchain R&D Department at China Telecom.

So this is one of the biggest telecom operators obviously in China and, you could argue, the world, with a population of 1.3 billion people. You have a lot of customers. And David is working on the world’s first blockchain SIM card to our knowledge. I have never heard of a blockchain SIM card, nor has your team. We have heard of an HTC blockchain-based smartphone. You’re doing a SIM card and that’s very different. Tell us about why you’re doing that. 

David Wei Liang: Hello, everyone. Regarding this blockchain SIM card, we think with the development of blockchain technology, we have to do something to transform the telecom operators from the pure pipeline to the new entrants of value internet. We just integrated the blockchain crypto algorithm into a SIM card, so that people can have the convenience and privacy to manage their digital data. We think that by doing this innovation, we’re building the new entrants to the value of internet and also incorporating blockchain with real authentication, so that we can build a new ecology for the blockchain and digital economy.

Angie Lau: So let me get this right. When we talk about the digital economy, at least up to this point, pre-blockchain, we talk about e-commerce; we talk about the internet; we talk about Alibaba; we talk about Amazon, eBay, and all the rest. As we evolve this thinking, what you’re saying is that blockchain is creating a new digital economy, and the SIM card that you’re developing with blockchain technology behind it allows a portal into this new, evolved e-commerce. 

David Wei Liang: Yes, exactly. So as far as we can see, the private key is actually the key to the value of the internet. It’s just like a key to the door. We incorporate the private key generation and digital signatures in the SIM card so that the SIM card can act as the door to the new digital economy. So, we think that in the new digital economy, blockchain lies in a very important cornerstone.

Angie Lau: Is this a centralized system? Is this is a closed system, within China Telecom, that exists only on the SIM card? Or are you also allowing connectivity to a decentralized network? 

David Wei Liang: Actually, this is the key to a decentralized world. People can use this to manage their private data. It is not only about the cryptocurrency but also their personal data; for example, their medical data, their equity data, even their game equipment and their financial data. So they now have the key to manage their own data.

Angie Lau: This technology is incredible. We talk about the evolution of blockchain, but a lot of the mainstream doesn’t even know how to use it yet. Do you think that the current climate of blockchain understanding allows the average person like me on the street to say, “Yeah, there’s value in this blockchain SIM card.”  

David Wei Liang: Yes, actually. For example, say I’m an ordinary person and I have some medical record in Hospital ‘A’. When I go to Hospital ‘B,’  I can guarantee that Hospital ‘B’ can use my own medical data from Hospital ‘A’. So I can use my blockchain-based SIM card to verify and authenticate this whole process.

Angie Lau: Who is using it right now?

David Wei Liang: We are doing a lot of work to push this to the markets.

Angie Lau: What platform are you using? Which protocol? Or is it internal?  

David Wei Liang: Actually, we have incorporated several protocols and crypto algorithms into the SIM card: for example, the ECC, the ECDSA, and also SM2. Besides these protocols, we also used some blockchain protocols. For example, we’ve used the BIP 32 and 44. They are all in the small SIM card.

Angie Lau: And that small SIM card can be a powerful tool, a key, as you say, but how is it going to tap into, as you say, a decentralized network if the protocols are different? Is there an interoperability aspect to your usage of blockchain SIM card to a universal network of different platforms and different protocols? 

David Wei Liang: Actually, this SIM card can interact with various blockchains; both public and private blockchain, because the SIM card interacts with the blockchain nodes, and the nodes participate in various blockchains. So the private key of various blockchains can be generated in our SIM card.

Angie Lau: So are you working with developers right now thinking about how to create applications to use your SIM card?  

David Wei Liang: Yes, of course. Actually, we have some very interesting application scenarios. For example, the scenario of ordinary customers, and also the scenario of businesses. For example, we’re doing a supply chain financial scenario for a business. For example, we have built a blockchain to support the transaction and the value of supply chain financials. In this scenario, the supply chain financial is the digital asset to be managed. So we can use the SIM card to issue it, to sign it, and to verify it.

Angie Lau: Do you think blockchain technology can transcend what’s happening in the geopolitical landscape? Right now, we have the China-U.S. trade wars. People are concerned about technology from Huawei. Do you think that blockchain can actually create an even playing field? Do you think that the global citizens are ready to accept that from China? 

David Wei Liang: I think the world is getting planed. Blockchain will accelerate this process in various scenarios. For example, the payment, the data sharing, and also the exchange of their digital data. I think it is getting more planed.

Angie Lau: How do you envision blockchain SIM cards being used a year from now, or two years from now? 

David Wei Liang: Actually, I think there is a very huge market and a strong demand for people and organizations to use blockchain SIM cards to protect digital assets and transfer values. So, I think this process will become a reality maybe in 1 or 2 years.

Angie Lau: You shared a very interesting presentation at Blockchain Summit here at Mobile World Congress in Shanghai. I was fascinated to understand the thinking of your team as it thinks logically through the application of blockchain. Can you share it with me here? You say that blockchain is the turning point of division and merging in the networking world. What do you mean by that?

David Wei Liang: Actually, I think the transition of technology will first merge, and then divide. So first of all AT&T used circulated switching for over 30 years. This is the ‘merge’. For the ‘division’ after that, the TCP IP protocol can improve the efficiency of communication by distributed routing. So this is the ‘division.’ Now, currently, Google is the new monopoly giant in information and Internet. So this is currently a ‘merge,’ so in the future as far as we can see, blockchain provides the new teleco paradigm for the Internet of Value. This is a new ‘division’, so we, teleco operators, have to catch this historic opportunity.

Angie Lau: You’re talking about, there are just these pulse points that happen. Currently, we’re in a very centralized environment with Google, as you use for an example, with blockchain that it’s all about decentralization. So how do you apply this technology then, and how are you thinking about it at China Telecom to benefit from this next step in the technology? 

David Wei Liang: Actually the key point here is to transform the digital economy from a data monarchy to a data democracy. That is to say, to give the right of the data to the data producer themselves. So this is also what we called Web Sweep 1.0. It is value sharing. It is an individual economy. Actually, it’s different compared to Web 1.0 and 2.0. I think this is a really big shift.

Angie Lau: Are we getting to 3.0 and beyond? What does that look like even

David Wei Liang: Actually, it is happening now in the real world. For example, Steemit. We can post to the content and we have the rights of our own content and we can get rewarded if the content is popular.

Angie Lau: So China is also a very interesting dynamic as well because the government really believes in the blockchain technology; it encourages that. But cryptocurrency is illegal; mining is illegal; being a public node without permission is illegal. Does that hurt innovation and blockchain internally here in China?  

David Wei Liang: Actually, I don’t think it hurts because cryptocurrencies and blockchain itself are two totally different things. For example, in China Telecom we are doing some very interesting blockchain applications and projects without any tokens. Just the pure blockchain technology.

Angie Lau: So you’re just stripping away the cryptocurrency, the tokenization side, and you’re just using the underlying technology. 

David Wei Liang: Yes, exactly. For example, I’ll give you a very concrete example. In our electronic bidding system, actually as it’s known, the traditional bidding process is opaque. So there were a lot of things, a lot of files and processes to be questioned. So we use blockchain to give more transparency to all these processes. Actually, we just uploaded and encrypted the key point files and data on the blockchain to enhance its transparency.

Angie Lau: Okay, so you’re doing that. But e-commerce is still about the exchange of value, and part of blockchain is the incentivization of blockchain. So that’s a con, that’s a token. You’re not going to let people use coins or tokens, so why would they want to use blockchain? 

David Wei Liang: Actually, as far as I can see, there are several typical scenarios for blockchain technology. So as you talk about the cryptocurrency and the token economy, it is only one typical economy. We call it ‘values exchange.’ Besides this, there are other typical scenarios. For example, to enhance the transparency and data authentication. They are all typical scenarios outside of the token economy.

Angie Lau: When are you going to be putting the blockchain SIM card out to market?

David Wei Liang: Actually, we are just accelerating this process. Maybe you will be able to buy the SIM next year in MWC.

Angie Lau: That would be incredible. How would I use it? Are you now creating a network of services that, like the hospital example that you were giving me… will there be an app that allows me to use your blockchain SIM card to aggregate my healthcare information and take it from hospital to hospital? 

David Wei Liang: Yes. Actually, there are various apps in various industries that were developed by third-party developers and companies.

Angie Lau: Are you in with other blockchain projects right now?  

David Wei Liang: Yes, of course. Actually, our SIM card just provides the ability and application program interfaces for the third-party partners to be involved in various industry scenarios.

Angie Lau: How important is watching technology amongst the leadership at China Telecom? 

David Wei Liang: Actually it is one of our important technical directions in China Telecom.

Angie Lau: …And that’s being encouraged and inspired by political policymakers as well? 

David Wei Liang: Actually, from our own company, it is supported and encouraged to use it in our real networks to find new gross points for the telecom operators.

Angie Lau: It will be for sale in China. Do you envision a day where this could be for sale outside of China?  

David Wei Liang: Yes, I think so, because I think the carriers in different countries can join hands together to push this project, because this project can also benefit other carriers in the scenarios. For example, personnel identification, settlement clearing, and roaming management, among other aspects. We can join together. Actually, we are joining CBSG to talk with other partners in other countries.

Angie Lau: And that kind of consortium is extremely powerful. I will ask you this last question before I let you go, David. Your predictions for the future of blockchain? 

David Wei Liang: Okay. Actually, I think a fight with the pervasive use of 5G. I think the 5G plus blockchain will be the catchall, and there will be more and more blockchain applications with the help of 5G and IOT Technologies. So this is my prediction.

Give me a real-world example of 5G plus blockchain. 

David Wei Liang: For example, with the development of 5G and the deployment of 5G, actually, the objects, the real things – the chair will talk to the other chair and the chair will talk to the fridge. It is an Internet of Everything. The things can communicate with each other and even transfer the value with each other, so blockchain benefits from this scenario. It can provide a real decentralized value transfer system for this Internet of Everything scenario.

Angie Lau: The future is already here, and we’re surrounded by it. I want to thank you so much for sharing what you’re doing at China Telecom. The blockchain SIM card is an exciting development in blockchain, and to understand it a little bit better from the person who’s leading the team is incredible. So thank you, David; thanks for joining us and thank you as well for joining us in this great new world called blockchain. For now, I’m Angie Lau, Editor-in-Chief of Forkast.News. Until the next time.