Closing at 3293.01 points with a gain of 0.59%, the Blockchain 50 Index (399286.SZ) marked its fourth consecutive day of gains on January 3, 2020.
Since its debut on December 24, 2019, the index has fallen on just one of its first eight trading days.
"In 2019, blockchain transitioned from winter into spring," Wang Juan, Secretary-General of the Beijing Computer Society's Digital Economy Professional Committee and a digital currency and blockchain expert in the Central Cyberspace Affairs Commission's expert database, told Times Weekly.
The year saw significant momentum for the industry, creating new opportunities. Governments, companies, institutions, and academia all intensified their focus on blockchain technology.
According to Zero1 Intelligence, over 40 national-level policy documents related to blockchain had been issued by early December 2019, covering areas from food safety and trade to transportation and government administration.
Capital markets reacted quickly.
On December 24, 2019, the Shenzhen Stock Exchange (SZSE) launched the SZSE Blockchain 50 Index, which includes constituent stocks like Ping An Bank, Midea Group, Zixin Pharmaceutical, and Suning.com.
This wave of enthusiasm also prompted deeper reflection on the industry's state.
In reality, blockchain remains in an early exploratory phase. Business models are still evolving, core technologies require further innovation, and talent is in short supply—challenges that persist.
"The entire industry is exploring blockchain-based business models," Li Jun, Vice President of blockchain infrastructure provider Jingtong Technology, told Times Weekly on December 31, 2019. "Beyond the urgent need for infrastructure engineers, we critically need professionals who understand specific industries, grasp customer pain points, and can design entirely new solutions."
Blockchain's "Spring" Arrives
"Blockchain technology is now in its tenth year, having evolved from Bitcoin 1.0 and Ethereum 2.0 to today's Application 3.0 era, with continuous technological iteration," Li Jun explained.
In October 2019, blockchain was designated a priority for independent innovation in core technologies, solidifying its strategic importance and reigniting widespread interest.
"The key difference between blockchain and the internet lies in their application scenarios," Zhu Zhaoying, Executive Director of the Shanghai AIII Artificial Intelligence Industry Research Institute and Vice Chairman of the International Intelligent Blockchain Research Association, told Times Weekly on December 30. "Blockchain is designed to transmit high-value data itself, not just low-value information."
"Humanity's shift into the digital world is becoming undeniable," Cao Yuan, Head of blockchain media outlet HuLian MaiBo, stated on December 25. "As everything becomes digitized, blockchain adoption will grow accordingly."
On December 26, the CCID (Qingdao) Blockchain Research Institute released its China Blockchain Enterprise Development Research Report, which noted that over 33,000 blockchain-related companies had registered with authorities by December 2019, according to TianYanCha data.
Institutions like the People's Bank of China (PBOC), commercial banks, and the State Administration of Foreign Exchange have explored various blockchain applications, while tech giants such as Baidu, Alibaba, and Tencent ("BAT") have also announced progress.
Notably, the launch of the SZSE Blockchain 50 Index on December 24 drew significant industry attention.
The SZSE stated the index aims to track the performance of Shenzhen-listed companies involved in blockchain and provide investors with more index-based investment tools.
Constituent stocks were selected from companies across the blockchain industry chain, ranked by their average daily market capitalization over the past six months. The top 50 include Ping An Bank, Midea Group, 2345 Holdings, SF Holding, and Suning.com.
Wang Juan noted that while many constituent companies may not yet have tangible blockchain results, the index mechanism helps them raise capital.
According to HuLian MaiBo data, only five of the 50 index constituents generate revenue from blockchain-related activities, and even for them, it's a negligible portion of total revenue. Nearly 40% are still in the research and exploration phase.
"In early 2018, we launched a hardware product called 'Octopus Disk' that incorporated blockchain," a staff member from 2345 Holdings' Board Secretariat told Times Weekly on December 26, 2019. "We haven't introduced any new blockchain products since."
Moving Toward Standardization
Behind blockchain's "spring" lies a trend toward maturity and compliance.
The technology has evolved from being synonymous with "Bitcoin" to a key driver of industrial innovation. The era of speculative cryptocurrency trading has given way to a technology-focused "chain circle."
"Blockchain development has shifted from an early focus on cryptocurrencies to today's emphasis on technological maturity and applications in areas like digital bills and product traceability," Shen Jiangguang, Vice President of JD Group and Chief Economist of JD Digits, told media.
Zhu Zhaoying agrees: "Blockchain's greatest value must be realized in the real economy, not the virtual one."
On March 30, 2019, the Cyberspace Administration of China (CAC) published the first batch of 197 domestic blockchain information service registration numbers, spanning multiple industries and involving many listed companies—marking the start of a more standardized track.
On November 14, 2019, the Ministry of Industry and Information Technology (MIIT) stated in a official reply that it would promote the healthy, orderly development of blockchain by strengthening planning guidance, establishing standards, and accelerating practical applications.
Furthermore, a December 30 notice on the PBOC's website indicated its Fintech Committee would intensify regulatory oversight, including rules for personal financial information protection and blockchain.
"Regulation is an inevitable phase—from chaos to order—for any industry to thrive in a healthy environment," Li Jun commented. "Disorder only degrades the entire ecosystem."
Wang Juan explained that current regulation primarily targets cryptocurrencies and trading. Blockchain technology itself is neutral; risks arise in areas directly impacting people, especially those involving money.
A Guohai Securities research report notes that blockchain laws, regulations, and supervisory frameworks will mature further in 2020. Registration facilitates holistic development and represents a first step toward standardization, enabling more companies to develop applications legitimately.
Amid tightening regulation, the blockchain investment market has cooled.
According to the Blockchain White Paper (2019) jointly released in October by the China Academy of Information and Communications Technology and the Trusted Blockchain Promotion Initiative, global blockchain investment and financing totaled just $2.028 billion by the end of August 2019.
From January to August 2019, seed, angel, and Series A rounds for blockchain companies numbered 273 deals worth $674 million—down from 374 deals and $969 million in the same period last year.
Zero1 Intelligence data shows that from January to October 2019, China added 8,895 new blockchain-related firms, accounting for 29% of the global total. However, this represents a roughly 40% year-on-year decline compared to the same period in 2018.
The Reality Behind Proliferating Applications
Real-world implementation is both an essential step and an inevitable test for blockchain. Attention has increasingly shifted to "blockchain + industry."
According to CCID Blockchain Research Institute statistics, China had disclosed 151 blockchain application cases across 28 fields by the first half of 2019. Financial services, e-government, healthcare, intellectual property protection, traceability, and public welfare ranked highest in implemented cases.
Tech giants like "BAT" have built blockchain expertise for years. Tencent's applications, for example, include the "Tax Chain" for electronic invoices, "Weiqi Chain" for supply chain finance, "Zhixin Chain" for judicial evidence preservation, and city commercial bank bill projects.
Yet behind these implementations lie deeper questions.
Can blockchain truly solve core industry pain points? Which use cases are genuinely "authentic" blockchain?
"Objectively speaking, many blockchain applications remain theoretical, with no large-scale deployments yet," Wang Juan admitted. "Some function identically even if you remove the word 'blockchain.'"
In her view, blockchain's immutability makes it suitable for evidence preservation, such as recording electronic contracts and legal processes. "Digital currency" also remains one of its most mature applications.
"Finance is blockchain's most natural application area—remittances, supply chain finance, clearing and settlement, asset digitization, and data monetization all show significant efficiency gains and cost reductions," Li Jun said. "Other areas like government data sharing and medical records also stand to benefit."
He added, "Blockchain isn't a panacea. It suits some scenarios but not others. We must avoid 'blockchain for blockchain's sake.' It's a revolutionary way of thinking—how to leverage it to create new distributed business loops requires extensive practice, with no universal answers."
Indeed, the industry remains exploratory, with few clear business models. Few companies profit meaningfully from blockchain, and failures are common.
"Overall, A-share listed companies developing blockchain applications are still in the exploratory phase," Song Jiaji, Dean of Guosheng Securities' Blockchain Research Institute, told media. "They've achieved small-scale deployments, but applications involving substantial real-world data interaction have a long way to go."
According to the CCID Research Institute's 2019 China Blockchain Industrial Park Development Report, China had established (or was building) 22 blockchain industrial parks as of May 2019, 80% founded within the past two years.
Over 70% of these parks rely primarily on government subsidies, over 60% on office leasing, and 50% on equity investments and property management for revenue.
"Most blockchain companies currently rely on information service fees, with a few earning transaction commissions—similar to the early-2000s era of building corporate websites," Cao Yuan told Times Weekly. "Native business models require a mature ecosystem to emerge."
"Revenue models are still being explored, and many companies are testing blockchain products," a senior executive at a blockchain firm said bluntly on December 29, 2019. "Crucially, the user base is still small. Even with our B2B model, relatively few enterprises are genuinely willing to adopt blockchain solutions."
The CCID Research Institute's report summarizes five major challenges: severe talent shortages, lack of third-party evaluation for products, insufficient motivation for core innovation, startup financing difficulties, and increasing homogenization of services.
Looking ahead, the institute recommends strengthening talent supply, expanding financing channels, and enhancing core competitiveness and innovation capabilities for blockchain enterprises.