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Ofo to delve into blockchain technology in push for dominance in bike-sharing industry

Photo: ofo.com

Ofo, one of the biggest bike-sharing companies in China, has announced the establishment of a research center to develop the blockchain technology that will be adopted in areas including big data, the Internet of Things and the operation of shared bikes.

With the go-as-you-please parking of shared bikes becoming a top concern of Chinese cities, some of which have designed policies to limit the reckless growth of the bike-sharing business to reduce traffic congestion, the blockchain technology will help build an efficient network connecting bike-sharing firms, governments and users, which is helpful in solving the problems related to the deployment, distribution, parking and maintenance of shared bikes, said Ofo.

The blockchain technology, whose application in digital currencies is still controversial in China, is widely considered to feature advantages in non-manipulation of information, openness and decentralization, which Ofo sees vital in its industrial revolution that focuses on short-distance travel convenience.

The application of the blockchain technology in Ofo's operations will, to some extent, contribute to the establishment of a credibility mechanism, through which users can obtain a bigger line of credit when renting shared bikes.

The blockchain technology will also offer a solution to currency exchange, which is beneficial to Ofo's push for global expansion.

And more importantly, decentralization will develop the bike-sharing service into a real sharing economy, which can directly connect bike-sharing service providers with users, thus reducing the operating costs.

36kr.com, a prominent technology news website in China, quoted a source from Ofo as saying that the company will inject more resources into the development of innovative technologies and the Internet of Things in order to gain a greater say in the bike-sharing industry.

Previously, Dai Wei, chief executive officer of Ofo, reportedly turned down Chinese car-hailing giant Didi Chuxing's proposal for acquisition. Dai's denial came nearly a month after Ofo's archrival Mobike was bought by the country's largest provider of on-demand online services Meituan Dianping, which is a rival of Didi in the car-hailing sector.

Ofo's struggle for independence can guarantee its sole control over technological research. "If Ofo can strengthen its investment in technological innovation at a time [when rival Mobike is bought], the firm will gain an upper hand in [the bike-sharing] market," said the Ofo source.

Ofo said that it will abide by the current regulations and rules about the blockchain technology set by China's regulators, which currently hold a vague attitude toward the use of the blockchain technology especially in virtual currencies like Bitcoin.

However, China is moving toward building a protocol for the emerging technology.

Recently, an official from the Electronic Industry Standards Research Institute under the Ministry of Industry and Information Technology revealed during an interview with the Economic Information Daily that the government was considering designing a set of national standards for the application of the blockchain technology, which is likely to be released by the end of 2019.

In 2017, Singapore's bike-sharing firm oBike worked with blockchain platform Tron to launch a cryptocurrency called oCoins, which is used as point reward.
 


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