China’s crypto industry lives on. Here are 3 quotes about the current state
Ban or no ban, China’s crypto obsession is as strong as ever. Before the government stepped into the cryptocurrency industry, China was arguably the world leader. The exchanges were the largest and at their height controlled 70% of bitcoin’s hashrate. Prohibition was supposed to kill all that, but the roots were too strong. In Bloomberg’s latest “Inside China’s crypto scene, a year after a massive attack“, we learn where China’s crypto industry currently stands.
The article cleverly compares the ban to “China’s decision in the 1990s to build the Great Firewall,” which “gave the CCP unprecedented power to restrict the free flow of information.” Apparently Bloomberg did the job. They claim the article is based on “Interviews with more than a dozen industry participants based in China, ranging from founders to programmers and operations specialists, paint a picture of a sector trying to find its way by experimenting with new products and services in the hope that regulators do not strike.”
Read the whole case if you want an overall picture of the current situation. We will focus on the quotes. About the main characters’ reports from the property.
Three quotes that say a lot
He is “the founder of Folius Ventures, an investment fund focused on Asian crypto startups.” Jason Kam shows us the current state of China’s crypto development scene:
“At its core, the Chinese government is going to curb speculation and capital outflows, but for the rest of the web3, such as developers writing code, the government has a ‘one eye open, one eye closed’ approach.
She is Chainalysis’ research director. Kim Grauer explains a billion dollar market for China’s crypto industry to tackle:
“There are informal crypto markets that operate in a kind of legal gray area. We have spoken to merchants who are in sub-Saharan Africa and Latin America who buy goods from China using cryptocurrency in this informal market capacity. We can see that people in China still frequents large centralized exchanges.”
He is the brain behind the Strxngers NFT collection. The pieces resemble “80s-style pixelated video game avatars” and sold out in less than a minute. The creator, Frank Chen, explains the rationale behind the project:
“I chose NFT as an area to experiment in China because I don’t think the country is completely against it. Before any regulation on digital collectibles comes out, it’s currently a gray area that allows people to experiment.”
It’s an insider’s view of China’s crypto industry as it stands today. But what about tomorrow?
BTC price chart for 10/24/2022 on Bitstamp | Source: BTC/USD on TradingView.com
China’s crypto solution
Frighteningly, the country’s crypto future looks like “permission-based blockchains under government oversight.” And the first iterations of that technology are already up and running on the Asian continent. “Crypto is about commerce and applications, and we are about the technological infrastructure. Two completely different worlds,” said He Yifan of Red Date Technology. What does the company’s product look like?
“Unlike a traditional blockchain such as Ethereum, transaction costs are denominated in fiat currency and fixed at 0.05 yuan per transaction. Daily transactions on Red Date’s Blockchain-based service network have increased to over 1 million, according to He, comparable to volumes of Ethereum.
Is this another way to realize the promises of blockchain technology, or is China’s crypto environment so toxic that they have already ruined their part of the play without even knowing it? Time will tell, but the whole situation is certainly exciting and surprising. Most thought the ban would kill China’s crypto industry, but look at them now. The party is just getting started.
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