China’s Iron Grip on Cryptocurrency, and the future of Steemit
Before I begin, I should say that I am in no way an expert on cryptocurrency, but I do know a lot about China and its potential to ruffle the feathers of the world, and as of late, their target appears to be Crypto. This is going to have profound effects in the coming years, in ways we may not even realize yet. A little background knowledge:
Bitcoin
There are many advantages being the world’s largest authoritarian nation. You can do whatever you want, whenever you want, however you want. Why, just recently, The CCP kidnapped a billionaire in Canada and tortured her for the heinous crime of posting on social media about how meditation helps her relax.
No joke.
So when something as rogue and anonymous as Bitcoin rises from nowhere, the party feels a little anxious. A democratic currency in China? I think not.
So it wasn’t long before restraints were put in place.
For example, trading bitcoins in China is not anonymous. Anybody getting involved must register their bank card and ID, and every bank card is directly connected to the government. This prevents corrupt officials bypassing the law that limits each person to $50,000 a year being sent overseas (in reality it’s much less than that).
Having said that, who are the officials investigating the corrupt officials? Most likely more corrupt officials!
Speculative Trading on Steroids
These higher-ups are gaming with bitcoin to a phenomenal degree. Studies suggest that anywhere between 50-98% of all bitcoin trading goes on in China, and the government were quick to exploit this fact. In 2013 when bitcoin skyrocketed from $100 to somewhere around $1,000, the CCP put out a statement telling financial institutions to suspend trading of bitcoin on the basis that it ‘has no meaning and lacks protection’.
What happened? Well, we all remember that.
Earlier this year, the government via the People’s Bank of China made China’s biggest bitcoin exchanges suspend trades for four months, and during that time, the global price of bitcoin fell again.
On June 1st OKcoin, China’s biggest Bitcoin exchange had its withdrawal ban lifted, and immediately Bitcoin made up over half of its losses overnight.
Why?
Most likely, control.
Manipulating FOMO traders is one of the CCP’s specialties. For example, every time the CCP makes a worrisome statement about a market of choice, it crashes. Then, Chinese officials buy low, report that that trading should be encouraged again, and the prices are driven back up, lining their pockets with virtual gold.
But hey, as long as it stays in China, right?
On the whole, China is embracing cryptocurrency, just recently coming up with one of its own, Antshares, or ‘Neo’, as it was rebranded.
Not only this, but the party encourages bitcoin mining, offering government-run, low-cost solar and wind energy to mines. As a result, China’s bitcoin mines alone spend 111Mw of power running them, four times that of the US.
With the unstable, and in the view of many, unsustainable Shanghai stock Exchange, people in China are turning to cryptocurrencies in huge numbers:
The influence of the Chinese middle class should not go unnoticed!
So what about Steemit?
Well, I’ve been thinking for a while that if Steemit does come to the foreground and gain enough attention, we can expect a huge influx of Chinese plagiarists eager to get in on the action. The battle for quality over quantity will take several steps back before, years from now, crawling forwards again.
If such a huge influx of Chinese come crashing in and the government notices, you can probably expect the same kind of volatility bitcoin witnessed in 2013 as they try to regulate and put limits on this ‘commodity’.
That being said, China has typically found their own replacements for such technologies; Whatsapp = Wechat, Google = Baidu, Youtube = YouKu, Tinder = TanTan and so on.
With any luck, the same may happen with Steemit, and the concept will have some healthy global competition.
Now I do know little, as I said, so I’d like to engage with more informed people in the comments section which may shed more light on the potential future and growth of Steemit in regards to China’s 1.4 billion population. What do you think?
Interesting! China is getting ahead of the curve by creating a national crypto and with NEO.
Great post mate! Upvoted
Wow. Great set of arguments that line up with overall concern that China is a dominate player in the cryptoscene.
Add this to Japan heavily promoting Bitcoin adoption recently and the Asian market may very well dominate the "decentralized" space.
Really enjoyed your post and keeping an eye out in the developments in this space.
Thanks for reading - Yeah the markets shot right up when Japan officially legalised it. It's going to be a wavy ride from here on out...
thanks for sharing! well done!
thanks for this post the questions are well answered thanks a lot for sharing and keep on posting ;)
Very interesting indeed.
You have said it. Its all about control. Central banks needs control. Peirod.
Biggest threat to Cryptocurrency in general is that other Nations central banks will start following the Chinese solution.
Yep, and with China's growing influence, that becomes increasingly likely... sigh
Thanks for sharing!
If china develops a competitor to steemit I have no problem with that. Competition is healthy thing.
Yep, in a way I see that as the best case scenario
YOYOW is a blockchain backed social media platform that just had its ICO in China a few weeks ago. It's supposed to go live sometime in the third quarter.
Oh wow they're faster than I thought. Nice find!
mobbs, That is great news for the china.
wow nice post