The Chinese have a saying: ‘When the winds of change blow, some people build walls and others build windmills.’ Anyone who is familiar with the trade war currently being conducted between Washington and Beijing will readily appreciate the significance of these wise words. Put simply: the world is changing, so understand the flow and go
The Chinese have a saying: ‘When the winds of change blow, some people build walls and others build windmills.’ Anyone who is familiar with the trade war currently being conducted between Washington and Beijing will readily appreciate the significance of these wise words. Put simply: the world is changing, so understand the flow and go with it. The American government, for instance, needs to understand that Asia is on the brink of an economic rebirth. According to the IMF World Economic Outlook (Oct 2018), the GDP (PPP) of the 30 emerging and developing countries of Asia (including China, India, Indonesia, South Korea, Saudi Arabia, Taiwan, Thailand, Singapore and others) will exceed $44.9 trillion, compared to the $39 trillion GDP (PPP) produced by the G7 advanced nations (Canada, France, Germany, Italy, Japan, UK and USA). The Chinese economy is growing especially fast, relatively speaking. In 2006, according to the Economist, the U.S. economy was five times larger than that of China. By 2017, it was a mere 60 percent larger. That’s a big change and, for most Americans, pretty scary. The Chinese government needs to understand this and tone down the ‘Tomorrow we’re going to take over the world’ type rhetoric.
Ironically, the world’s two largest economies are more complementary than competitive. China is the world’s largest manufacturer, while America is the global information technology center. In addition, according to the International Energy Agency’s annual energy forecast (2017), America is set to become the world’s leading oil and gas producer, with China overtaking it as the biggest oil consumer. Yet another complementary feature concerns soybeans, of which America is the largest producer and China the largest consumer. According to Reuters, in 2016 before the imposition of tariffs, America sold 36.2 million metric tons of soybeans to China (including Iowa’s entire crop) as animal feed for its livestock, poultry and farmed fish.
In view of their interconnected relationship, as well as the scarcity of global resources, confrontation between these two giants makes absolutely no sense to anyone except hard core chauvinists. It’s time to build windmills rather than walls.
In this respect, they could learn a lot from NULS, a young Chinese blockchain company that, last year, walked off with the ‘Outstanding Project Award’ from the China High-Tech Industrialization Association (CHIA). Earlier this month, in a surprise move, the Chongqing-based company announced its intention to open a U.S. office in the Silicon Valley area, home to many of the world’s largest technology and social media companies, including the likes of Google, Facebook, Apple, Intel, Cisco Systems, IBM, Microsoft, Tesla, Uber and others.
So who is NULS, why are they opening an office nearly 7,000 miles from home, and who cares anyway?
WHO IS NULS?
NULS is $45-million blockchain enterprise founded in September 2017. Following the successful launch of its main-net in July 2018, the company was added to China’s Global Public Blockchain Technology Assessment Index (GPBTAI) — the highly influential index of government-approved blockchain projects, compiled by China’s Center for Information and Industry Development (CCID), a research institute run by the Ministry of Industry and Information. Placed overall at No. 21, NULS achieved a top 10 ranking for its creativity and innovation, putting it on a par with larger and more experienced organizations. And its optimistic vision is infectious. “Blockchain can be a huge force for good” says founder and key code contributor Yang Lin. “It has so much to offer for individuals as well as organizations.”
Unfortunately, while many CEOs acknowledge the need to investigate the potential benefits of blockchain, they remain extremely wary of the cost and complexity involved. It is here that NULS hopes to make a difference. The company are developing a new software system designed to make it as easy as possible for even the smallest of enterprises to start using blockchain. Called “Chain Factory” it is due to be launched by the end of 2018.
Put simply, Chain Factory offers a suite of software tools that allows regular software developers to create a blockchain without having to understand complex cryptographic technology. Its modular architecture enables developers to build and modify their own pluggable sub-chains on the NULS platform — each with its own set of rules and token — by choosing from a wide selection of customizable modules from the NULS module repository. These modules cover smart contracts, the multichain system, cross-chain consensus, plus a wide range of other functions. Furthermore, developers do not have to use the programming language used by the main-chain itself: they can use their own preferred language. According to CEO Liesa Huang “Chain Factory solves two big problems — the high cost of developing a blockchain and the lengthy development cycle involved.”
In addition to Chain Factory, NULS has established strategic partnerships with several influential enterprises in China, South Korea, Singapore and Thailand. They include collaborations with: Bitmain Technologies Ltd, the multi-billion dollar AI chip-maker and Bitcoin mining giant, headquartered in Beijing; Singapore-based MC Payment, one of the largest providers of electronic payment solutions in Asia-Pacific; PRISM, the Thai-based medical data company; VICS, the Seoul-based asset security specialist; and others.
WHY OPEN IN AMERICA?
So far, NULS has impressed both the Chinese authorities in CHIA and CCID, and gained the respect of many of its contemporaries. It has launched its main-net platform, and will shortly unveil its flagship product Chain Factory. In the process, it has also cleverly positioned itself to take full advantage of the strengths of China’s high-tech ecosystem, notably in mobile phone technology, mobile payments, Artificial Intelligence, Big Data and the Internet of Things. With so much done, but so much still to do, what does the company hope to gain by establishing a base in America?
According to Liesa Huang, NULS has four immediate goals. “We intend to grow our team in the West, develop community leaders, and meet new partners interested in developing applications on the NULS platform. At the same time, we want to exploit the unique advantages of Silicon Valley.” To understand her last remark, consider the following facts.
First, according to Forbes magazine, the Bay Area — including San Francisco and Silicon Valley — currently accounts for more than 44 percent of total venture capital investment raised in the entire United States over the past 12 months. Venture capital funding – involving accelerators and incubators, as well as regular VC investors – is a prolonged affair spread over six stages, from seed capital to fourth-round financing. Nowhere does it more efficiently than Silicon Valley.
In fact, within nine days of announcing their U.S. move, NULS signed an investment deal with Los Angeles-based Ulysses Capital, a hedge fund with around US$1.5 billion under management. According to Crypto Fund manager Joon Lee, Ulysses chose NULS as its initial investment because “we highly valued the technical superiority of the NULS platform and the ability of its team to successfully launch main-net and align with Bitmain.” NULS U.S. Regional Director David Wasson was equally upbeat. “In addition to this investment agreement we have also entered into a strategic partnership with Ulysses, and will be collaborating in the future to promote the NULS platform for various ICO projects.”
Second, real estate prices in the Valley are off the scale – guess why. That’s right, every tech entrepreneur, his accountant and lawyer wants to move here. According to property database ATTOM Data Solutions, the average sale price for a single-family home in the San Jose metro area, last quarter, was $1.2 million. That’s a 25 percent increase, year on year. Far from Silicon Valley losing its appeal it remains the absolute go-to place for doing business.
Third, the majority of all high-tech and social media businesses are either headquartered or have a sizeable presence in the Bay Area. Despite the emergence of other high-tech economic centers in America and around the world, Silicon Valley continues to excel as the leading hub for high-tech development and the No 1. venue for tech discussion.
One final fact is worth remembering. According to a new 210-page report “Blockchain: Market Shares, Strategy, and Forecasts, Worldwide, 2018-2024”, published by Market Reports Center, the global market for blockchain is predicted to rise from $708 million (2017), to a massive $60.7 billion (2024). Of this, North America is forecast to take the largest share due to a major increase in funding for the development of technology. The Asia-Pacific zone is also expected to show significant growth due to increasing investments in the financial sector. If this actually happens — and not all forecasts covering the period 2018-2024 agree — NULS may find itself ideally positioned to benefit from the market growth in both America and China.
WHO CARES ABOUT NULS?
NULS is not the only blockchain enterprise in the world. Neither is it the most successful. But it does have a sharp edge. After all, it raised $50 million, survived the ban on cryptocurrency as well as the stop/go instructions from Beijing, and won a coveted place on the GPBTAI index — all before its first birthday. Now it is only weeks away from launching its unique Chain Factory ecosystem. Finally, in an unmistakable vote of confidence in NULS’ growing technical ability, the CCID last week upgraded the company’s ranking on China’s Global Public Blockchain Technology Assessment Index from No 21. to No 9.
Bottom line: NULS is hot property, both technically and financially. Its technical prowess is well documented, while its financial appeal can be gauged from the fact that its $45 million capitalization is a mere 4 percent of NEO’s value ($1.04 billion). Which makes it seriously undervalued — for the moment. Potential investors will no doubt draw their own conclusions.
Whatever the outcome, NULS’ journey to America is exactly the sort of feel-good story we need to lighten the gloom of the Sino-American trade war. And with more change in the wind coming soon, we need all the windmills we can get.