Can BSN Spartan Network Regain Public Blockchain Interest?

Sheila Lam is the contributing editor of CDOTrends. She has covered IT for 20 years as a journalist, and has witnessed the rise, hype and maturity of various technologies, but is always excited about what happens next. You can reach her at [email protected] The fluctuating cryptocurrency market has made traditional chief digital officers (CDOs) skeptical of public blockchain, despite its widespread use in the financial industry.

In fact, it is a major reason why many businesses, along with some Fintechs, are turning to private blockchains. The benefits of limiting participants, better performance and stable prices are attractive. But private blockchains, like Corda from R3, are built for specific industries or purposes. In addition to the high costs to build, and the need for complex skill sets, many were put off.

China-based The Blockchain-based Service Network (BSN) is taking a different route. It is looking to bring public blockchains back into the spotlight and make it palatable to traditional corporate CDOs.

Let’s withdraw cryptocurrency

BSN launched its first public blockchain network for the international market BSN Spartan Network last month. It allows traditional businesses to benefit from the public blockchains while bypassing the volatile cryptocurrency market.

“Businesses value stability,” said Tim Bailey, vice president of global sales, Red Date Technology, developer of the BSN Spartan Network. “We allow enterprises to more easily participate in public chains by removing cryptocurrency from the formula.”

The BSN Spartan Network eliminates cryptocurrency by creating three public chains that are hard forks of three original public chain frameworks, Ethereum, Cosmos and PolygonEdge. These chains use Spartan’s non-transferable token (NTT) as a universal tool, which can be purchased with fiat money paid via credit card or PayPal.

Baily added that these public chains are open and permissionless, meaning that all companies and developers can participate and build different digital services. All transaction records in public chains are also fully immutable, meaning all changes are traceable.

Not quite so complete blockchain

Despite the excitement and accessibility that the BSN Spartan Network brings to businesses, blockchain expert Christophe Uzureau, vice president analyst at Gartner, said CDOs should also understand the maturity of blockchain solutions.

“At Gartner, BSN is considered more of a blockchain-inspired, rather than a blockchain-complete solution,” Uzureau said. He added that Gartner defines a blockchain complete solution with all five key elements – distribution, encryption, immutability, tokenization and decentralization.

One reason BSN is still a blockchain-inspired solution, according to Uzureau, is that it uses distributed governance, not decentralized governance. Although participation in the public BSN Spartan chains is permissionless, the governance of these chains is still controlled by a single body: the BSN Foundation.

According to BSN, the Singapore-registered BSN Foundation consists of three committees – technical committee, management committee and business committee – to oversee issues such as R&D activities, distribution rule for NTT revenue and upgrading of existing chain.

Bailey said the BSN Foundation was eventually expected to consist of 40 members, with equal voting rights on important matters related to the BSN Spartan Network and the public chains. He expects to announce the first 10 members by the end of October, and the potential members include major cloud providers, global technology firms, law firms, financial institutions, system integrators and software developers.

Uzureau called BSN Spartan “public blockchains with Chinese characteristics,” and said BSN is a cornerstone of China’s digital enablement. The connection with the country’s digital silk road suggests a game-changing model for global technology players and companies to participate in the Chinese market.

“BSN’s link to the digital silk road and from there supply chain partners offers the potential for efficiency gains. However, the architectural design has implications for data governance and thus the terms and conditions of doing business in a Chinese context,” said the Gartner report co-authored by Uzureau.

Beta and POC

Hong Kong companies see potential in BSN Spartan Network. Emperor Group, Prenetics, Lan Kwai Fong Group, Maxim’s, HSBC and Fujifilm Business Innovation Hong Kong are participating in the beta program to explore building digital services through their public chains.

“We are always looking for new ways to help our customers in business transformation,” said Alan Chan, director of marketing and supply chain management at Fujifilm Business Innovation Hong Kong (FBHK). “Despite being far from mature, Web3 and blockchain are the future of transformation. We are keen to participate early and take part in this transformational journey.”

Currently at the POC stage, FBHK aims to securely store and tokenize digitally signed documents using the BSN Spartan Network and are Semi-Fungible Tokens (SFTs) to authenticate them. The next step is to work with HSBC to test the payment triggering process for these blockchain-authenticated documents.

After successful testing, Chan said FBHK plans to invite its customers in Q1 2023 to take part in the POC to use blockchain to authenticate signed documents and use the payment process.

“We are the first IT service company in Hong Kong to involve ourselves in this public blockchain,” Chan said. “This is a great educational and learning exercise for us to prepare for mass-scale application of blockchain technologies in the enterprise space.”

Despite acknowledging the great potential, Chan has some concerns. He noted that the scalability and inter-blockchain communication on the BSN Spartan Network would be critical to the blockhain network’s success. Another concern for companies to take part in these public blockchains is the total cost of ownership (TCO), which includes not only the increasing gas tax (mandatory blockchain transaction fee), but also other infrastructure and processes associated with the project.

“We are brave in participating in POCs, but also cautious in bringing them into production,” Chan added.

Many CDOs are likely to share Chan’s concerns as the market environment changes and companies prepare for financial difficulties.

Gartner’s Uzureau added that CDOs looking to participate in the BSN Spartan Network should also be aware of the latest developments in various public chains.

One such development is the upgrade of Ethereum, called the “merger.” It significantly increased performance from 15 transactions per second to 10,000 transactions per second. Uzureau said the upgrade set the stage for Ethereum to become more energy efficient. This can make it more attractive to companies looking at environmental impact and operating costs.

A society in growth

Bailey believes the BSN Spartan Network is a game-changing model for businesses to participate in public blockchains. It certainly raises a lot of attention and questions.

To help drive the momentum of adoption, BSN offers incentive programs for new users to set up virtual data centers with up to 100% monthly NTT rewards, allowing businesses to learn and explore the potential at a lower cost. Red Date Technology’s Bailey said his company plans to work with universities to encourage students and researchers to build applications with BSN public chains.

BSN also plans to establish a partnership programme. The company recently partnered with Saudi Arabia-based Virtual Vision to offer blockchain-as-a-Service. Bailey added that they will soon announce more partners in Asia and Europe, including consultants, data center operators and cloud platform providers. The consultants can help companies build business cases, while data center or cloud providers can help BSN customers operate and host virtual data centers.

Will BSN Spartan Network convert corporate CDOs and see them jump on the bandwagon? It remains to be seen, but at least they’ve had a good start.

Sheila Lam is the contributing editor of CDOTrends. She has covered IT for 20 years as a journalist, and has witnessed the rise, hype and maturity of various technologies, but is always excited about what happens next. You can reach her at [email protected]

Image credit: iStockphoto/lerbank