Blockchain Enterprises during the Pandemic: Crisis, Opportunities, and Industry Trend Outlook

Abstract

The main impact of the COVID-19 pandemic on Blockchain companies is concentrated in the short term, with limited long-term effects. Over 80% of companies believe that the negative impacts are mainly reflected in delays in work progress, high fixed costs, and obstacles in conducting business with partner institutions. The main ways Blockchain companies are responding to the pandemic include: implementing "distributed office" practices, changing marketing models and service delivery methods, and developing new products to launch anti-epidemic applications. Currently, the scale of Blockchain anti-epidemic applications is not prominent, accounting for only 9%, which is relatively low compared to technologies such as artificial intelligence and cloud computing. Affected by the pandemic, over 60% of Blockchain companies have adjusted their short-term development strategies, and 22% have adjusted their long-term strategies. In the context of the pandemic, new opportunities have emerged in areas such as public early warning systems, material traceability, public opinion monitoring, and identity information registration.

Table of Contents

1. Research Background and Definition of Research Subjects II. What is the impact of the pandemic on Blockchain companies?

2. In the face of the pandemic, how can blockchain companies turn "crisis" into "opportunity"?

3. What new opportunities are brewing in the blockchain industry under the pandemic? V. How will the blockchain industry evolve after the baptism of the pandemic?

4. Research Background and Definition of Research Objects

The COVID-19 pandemic has caused varying degrees of impact across different industries. Blockchain enterprises, with their online and internet characteristics, have suffered relatively less loss compared to offline industries such as dining and tourism. However, certain business segments are still inevitably affected. Some companies are facing challenges such as obstacles in offline operations, project delays, and financial pressure.

At the same time, opportunities are brewing amidst difficulties. During the pandemic prevention and control, blockchain enterprises responded quickly and launched related applications to support public epidemic prevention, highlighting the value of blockchain technology. A nationwide discussion on the application of blockchain technology in the public sector is imminent.

Since 2019, Blockchain technology has received high attention from the central government. With the dual promotion of policies and the market, the pace of Blockchain empowering the real economy has accelerated. The Blockchain industry has entered the 3.0 stage, and enterprises focusing on "Blockchain+" will lead the industry trend.

To understand how these enterprises responded and acted during the pandemic, and to seize potential development opportunities, Zero One Think Tank, in collaboration with relevant institutions, initiated an online survey, collecting information from over 30 Blockchain companies, of which 23 participated in the online questionnaire (. These companies mainly engage in Blockchain technology research and application services, covering various fields such as supply chain management, electronic evidence, digital identity, e-government, and traceability. This report is based on the survey results and hopes to witness and participate in the development of the Blockchain industry together with readers.

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2. What is the impact of the pandemic on Blockchain enterprises?

) has a negative impact in the short term, with limited effects in the medium to long term.

Research shows that nearly 70% of enterprises indicate that their business development has been affected to some extent, but they have taken countermeasures; over 20% report no impact; 8.7% have suffered significant negative impacts.

Based on the comprehensive results of enterprise interviews, the impact of the pandemic on Blockchain companies is mainly concentrated in the short term, with limited medium to long-term effects, for three main reasons:

1. Core business is less affected. Blockchain companies primarily operate online, and core activities such as technology research and development can continue as usual. Some companies are accustomed to "distributed office work" and can respond flexibly.

2. The pandemic stimulates more application scenarios. The pandemic highlights the potential of Blockchain in reducing costs, enhancing privacy protection, and improving efficiency, which will stimulate more applications. The pandemic promotes the development of online business, and Blockchain can improve efficiency and transparency.

3. Long-term favorable policy dividends. The "1024" speech has injected a "booster" into the industry. In 2020, Blockchain became the focus of government work reports in various regions. The Central Bank released the "Security Specification for Financial Distributed Ledger Technology", providing regulations for the industry, and related applications are expected to accelerate.

( The impact is focused on aspects such as delays in work progress and high fixed cost expenditures.

More than 80% of enterprises believe that the negative impact of the pandemic is mainly concentrated on:

• Work progress is delayed
• Fixed cost expenditure is relatively high
• Business cooperation with partner institutions is obstructed

During the pandemic, offline business communication and progress were hindered, project bidding, negotiations, and other activities could not proceed as scheduled, and business promotion plans were interrupted. The efficiency of communication with clients decreased, and business advancement slowed down. The payment process was also extended.

Many blockchain companies are in the early stages of development, with limited cash flow and high fixed costs. Under the circumstances of delayed resumption of work and obstructed business, rigid expenditures such as salaries, social security, taxes, and rent create financial pressure.

The application of blockchain technology mainly involves integration with traditional industries. Traditional enterprises have been impacted by the pandemic, with a core demand to complete prevention and control measures and ensure production, leading to a reduced demand for emerging technologies, which in turn affects the blockchain industry.

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3. In the face of the pandemic, how can blockchain companies turn "crisis" into "opportunity"?

Research shows that changing the way of working, marketing models, customer service models, as well as developing new products and exploring new business models are the main ways for blockchain companies to cope with the pandemic.

) to carry out "distributed office" "cloud resumption of work", ensuring business progress

During the pandemic, blockchain companies began "distributed office" and "cloud resumption of work", efficiently communicating through video conferences, telephone conferences, etc., striving to ensure that employees maintain normal work while in home isolation. Some companies have arranged dedicated teams to pay attention to employee health and work status.

Although "distributed office" can largely ensure the normal operation of business, there are still issues such as low collaborative efficiency and difficulty in supervision. Remote communication can easily lead to information asymmetry, slow work progress, and a decrease in overall work efficiency.

( two ) change marketing model and service delivery method

Business cooperation has been significantly affected, with direct impacts on offline communication and promotion of the project. Exploring new marketing models and service provision methods has become the biggest challenge faced by enterprises.

Currently, most enterprises provide services through online channels, connecting with customers through various means such as email, phone, and WeChat. In terms of marketing models, some companies have changed the "broad net" approach and started to focus on mature products and key customers, improving the order rate and enhancing the competitiveness of their main products.

( Three ) develop new products, launch epidemic prevention applications

Blockchain enterprises are developing technology to combat the pandemic and launching related applications. During the pandemic, blockchain applications for epidemic prevention mainly focused on fields such as epidemic data monitoring, finance, charity, and healthcare.

However, compared to technologies such as artificial intelligence, big data, and cloud computing, the performance of Blockchain in epidemic prevention and control is not eye-catching. According to incomplete statistics, in the proportion of information technology applications in epidemic prevention, artificial intelligence, big data, and cloud computing rank in the top three, while the proportion of Blockchain applications is only 9%.

Among the 23 surveyed enterprises, 12 have developed Blockchain applications for pandemic response, with 66.67% based on the transformation of existing businesses, 25% being temporarily developed, and only 8.33% based on original businesses. This indicates that the application of Blockchain in public epidemic prevention and control is insufficient, and there is considerable room for development.

In terms of application effectiveness and scale of implementation, only 25% have achieved large-scale application, while the rest have not yet been widely applied or are in the internal testing phase. The reasons for this gap include:

1. The blockchain industry is still in its early stages. It has only been a few months since blockchain received its "proper name," and many applications are still in the early stages, making it difficult to achieve significant scale effects during the pandemic.

2. The blockchain technology itself is not yet mature. Its security, scalability, and stability need improvement. The industry's understanding of the technology is limited, making it difficult to achieve significant gains in practical implementation.

3. Blockchain applications require multi-party cooperation. Collaboration among government, financial institutions, and other parties is key. Currently, the informatization foundation in multiple industrial sectors is still underdeveloped, and there are not many areas suitable for large-scale implementation.

4. The development of risk prevention applications lacks policy guidance. In China, the development of blockchain applications is more focused on efficiency, and there is a significant gap in the development of applications related to risk prevention.

5. The cost of application implementation is high. Although there is support from the central government, the cost of integrating Blockchain with specific scenarios and promoting implementation remains very high. Without buyers, small and medium-sized enterprises face cost pressures.

4. What new opportunities are brewing in the blockchain industry under the pandemic?

The pandemic prevention and control have exposed many issues in responding to public emergencies, especially the problems of poor information circulation and sharing, information asymmetry, and trust issues. These problems urgently require solutions from technologies like blockchain, which has characteristics such as decentralization, openness, transparency, traceability, and immutability.

Research shows that over 80% of enterprises believe that the business opportunities brought by the pandemic to Blockchain mainly lie in:

• Public Warning System (86.96%)
• Material Traceability (65.22%)
• Public Opinion Monitoring (65.22%)
• Identity information registration (52.17%)
• Financial Services ( 39.13% )

In these applications, Blockchain mainly plays the role of data on-chain and trusted endorsement.

1. Public warning system: Timely and rapid control of epidemic dynamics

The pandemic has exposed the issues in the current national epidemic warning system, including low information reporting efficiency, widespread information silos, and data loss. The role of Blockchain in breaking down data silos, achieving information sharing, and improving communication efficiency has received widespread attention. Some companies have launched related applications, such as Newland and Xunlei's "Epidemic Prevention and Control Data Management Blockchain System" and ChainFly Technology's "Blockchain Epidemic Monitoring Platform."

2. Material Traceability: Full chain follow-up tracking starting from the source

During the pandemic, issues such as the inadequate distribution of charitable materials and funds, and counterfeit medical supplies have become prominent. Blockchain can establish a material traceability system, achieving transparent sharing and efficient transmission of information throughout the process, ensuring data authenticity and transmission security. Some enterprises have launched related applications, such as Alipay, Ant Blockchain, the epidemic prevention material information service platform by CityDo, and the charity donation traceability platform "Shanzong" by Qulian Technology and Xiong'an Group.

3. Public Opinion Monitoring: Build a real and reliable public opinion monitoring system

During the pandemic, false information has frequently emerged, negatively impacting epidemic prevention and the lives of the public. The current public opinion monitoring system struggles to effectively trace and verify the authenticity of information. By utilizing the traceability, tamper-resistance, and multi-node auxiliary verification features of Blockchain, a credible and binding public opinion supervision system can be established, enabling accurate tracking of public sentiment information and enhancing the scientific and predictive nature of assessments.

4. Identity Information Registration: Trusted Identity Information Management Based on Blockchain

During the pandemic, the demand for public information on confirmed patients and close contacts, as well as registration for entry and exit in communities and office buildings, has become prominent, exposing issues such as information leakage, reporting errors, and "backdoor" access. A blockchain-based trusted identity management system can track individuals' activity trajectories, achieve accurate positioning, and ensure data security through the use of distributed identity identification and zero-knowledge proof technology.

V. How will the blockchain industry evolve after the baptism of the pandemic?

Looking ahead to 2020, the development trend of the Blockchain industry is generally optimistic:

( The pandemic has accelerated the process of digitalization in society, and Blockchain-enabled industries will speed up.

The pandemic has prompted governments and enterprises to embrace digital transformation and upgrading more actively, and the new generation of information technology will be given more attention. The construction of smart cities is accelerating, with a greater focus on the application of technology and facilities in public risk management and governance during digital construction. As the infrastructure of the digital society, Blockchain is expected to be scaled up in 2020 across multiple verticals such as finance, supply chain, and government affairs.