After the financial crisis in 2008 was published “Bitcoin. An article entitled “Peer-to-Peer Electronic Cash System”, which presents in detail the concepts of the payment system. Bitcoin was born. Bitcoin has attracted worldwide attention for its use of blockchain technology as an alternative to FIA currencies. Called the next best technology after the Internet, blockchain offers solutions to problems we have not been able to solve or ignore in the last few decades. I will not go into the technical side of it, but here are some articles և videos that I recommend.
How does bitcoin work under a hat?
A subtle introduction to blockchain technology
Ever wondered how bitcoin (և other cryptocurrencies) actually work?
Today, more precisely, on February 5, the Chinese authorities have just introduced new regulations to ban cryptocurrency. The Chinese government did it last year, but many bypassed it through currency exchange. It has now mobilized the most powerful “Great Wall of China” to block access to foreign exchange, trying to stop its citizens from trading in cryptocurrencies.
To learn more about the Chinese government’s position, let’s go back to a few years back in 2013, when bitcoin was popular among Chinese citizens and prices were rising. Concerned about price volatility and speculation, the People’s Bank of China and five other government ministries issued a formal notice in December 2013 on the Bitcoin Financial Risk Prevention Notice (citation in Mandarin). Several points were emphasized.
1. Due to various factors such as limited supply, anonymity բաց lack of centralized issuer, bitcoin is not an official currency but a virtual product that can not be used in the open market.
2. All banks և financial institutions are not allowed to offer bitcoin related financial services or engage in bitcoin trading activities.
3. All companies և sites that offer Bitcoin-related services must register with the required government agencies.
4. Because of Bitcoin’s anonymity և Because of its cross-border features, bitcoin-related service providers need to take preventative measures, such as KYC, to prevent money laundering. Any suspicious activity, including fraud, gambling or money laundering, must be reported to the authorities.
5. Bitcoin-related service providers should educate the public about bitcoin’s underlying technology and not mislead the public with misinformation.
In layman’s terms, bitcoin is classified as a virtual product (such as gaming credits) that can be bought or sold in its original form, not exchanged for fiat currency. It can not be defined as money. something that serves as an exchange, a unit of account, a store of value.
Although the notice is dated 2013, it is still relevant to the Chinese government’s position on bitcoin, as noted, there is no mention of banning bitcoin and cryptocurrency. Rather, bitcoin և blockchain regulation and education will play a role in the Chinese crypto market.
A similar announcement was made in January 2017, reiterating that bitcoin is a virtual product, not a currency. The boom in initial coin offerings (ICOs) in September 2017 led to the publication of a separate notice entitled “Preventing the Financial Risk of Notice Issues”. ICOs were soon banned, and Chinese exchanges were investigated and eventually closed. (Hindsight is 20/20, they made the right decision to ban ICOs և to stop pointless gambling). Another blow was dealt to China’s cryptocurrency community in January 2018, when mining operations came under severe pressure due to excessive electricity consumption.
There is no official explanation for the fight against cryptocurrencies, some of the main reasons given by the experts are capital controls, illegal actions, protection of citizens from financial risks. Indeed, Chinese regulators have tightened controls, such as the withdrawal threshold, regulating foreign direct investment to curb capital outflows, and securing domestic investment. Anonymity and ease of cross-border transactions have made cryptocurrency a favorite means of money laundering and fraud.
Since 2011, China has played a key role in the meteorological growth of bitcoin. At its peak, China accounted for more than 95% of the world’s bitcoin trade, or three-quarters of its mining operations. Regulators to control trade and mining operations have begun to control China’s dominance has been significantly reduced in exchange for stability.
As countries such as Korea and India follow the pressure, the future of cryptocurrencies is now being overshadowed. (Here I repeat my view: countries regulate cryptocurrency, not ban it). Undoubtedly, we will see more countries join in the coming months to curb the booming crypto market. Indeed, an order was long overdue. Cryptocurrencies have been experiencing price volatility over the past year, with ICOs occurring virtually every day. In 2017, total market capitalization rose to an all-time high of $ 828 billion in January from $ 18 billion.
However, the Chinese community is in a surprisingly good mood despite the repression. Online offline communities are thriving (I’ve personally attended several events, visited some companies), and blockchain startups are flourishing all over China.
Large blockchain companies such as NEO, QTUM և VeChain are attracting a lot of attention in the country. Startups like Nebulas, High Performance Blockchain (HPB) և Bibox are also getting a lot of attention. Even giants like Alibaba և Tencent are exploring the potential of blockchain to improve their platform. The list goes on and on, but you understand me. it will be HUGGEE!
The Chinese government is also embracing blockchain technology, and in recent years has stepped up efforts to support the creation of a blockchain ecosystem.
In China’s 13th Five-Year Plan (2016-2020), it called for the development of promising technologies, including blockchain and artificial intelligence. It also aims to strengthen research into the use of fintech in the field of regulation, cloud computing and big data. Even the People’s Bank of China is testing a prototype of a digital currency based on blockchain. However, as it is likely to be a centralized digital currency with some encryption technology, its adoption by Chinese citizens is yet to be seen.
The launch of a trusted blockchain open lab, as well as the Ministry of Industry’s Information Technology China Blockchain զարգացման Industry Development Forum, is another initiative of the Chinese government to support the development of blockchain in China.
The latest report from the China Blockchain Research Center, entitled “China Blockchain Development Report 2018”, details the development of the blockchain industry in China in 2017, including various measures taken to regulate cryptocurrency across the continent. In a separate section, the report highlighted the optimistic outlook for the blockchain industry V The massive attention paid to VCs և by the Chinese government in 2017.
In conclusion, the Chinese government has shown a positive attitude towards blockchain technology, despite its application to cryptocurrency mining operations. China wants to control cryptocurrency, China will gain control. Repeated uses by regulators were intended to protect citizens from the financial risk of cryptocurrencies and to limit capital outflows. At the moment, it is legal for Chinese citizens to have cryptocurrencies, but they are not allowed to make any transactions. hence the ban on exchanges. As the market stabilizes in the coming months (or years), we will no doubt see a resurgence of the Chinese crypto market. Blockchain և cryptocurrencies are hand in hand (except in a private chain where the token is redundant). Thus, countries can not ban cryptocurrency without banning blockchain technology.
One thing we can all agree on is that the blockchain is still in its infancy. We have a lot of exciting developments ahead of us, and right now is definitely the best time to lay the groundwork for a blockchain world.
Last but not least, HODL!