In 2008, following the financial crisis, an article entitled "Bitcoin: a system of electronic payment between individuals" was published and details the concepts of payment system. Bitcoin was born. Bitcoin has attracted worldwide attention for its use of blockchain technology and its alternative to sliced currencies and merchandise. Dubbed the best technology after the Internet, the blockchain offered solutions to problems that we had not solved or ignored in recent decades. I will not go into more technical aspects, but here are some articles and videos that I recommend:
How Bitcoin works under the hood
A smooth introduction to blockchain technology
Have you ever wondered how Bitcoin (and other crypto-currencies) actually worked?
Today, February 5, the Chinese authorities have unveiled a new set of regulations to ban cryptocurrency. The Chinese government did it last year, but many of them were bypassed by foreign trade. He has now enlisted the almighty & # 39; Great Firewall of China & # 39; block access to foreign stock exchanges in order to prevent its citizens from performing cryptocryptographic transactions.
To learn more about the Chinese government's position, let's look back in 2013, when Bitcoin was gaining popularity among Chinese citizens and prices were skyrocketing. Concerned about price volatility and speculation, the People's Bank of China and five other ministries issued an official notice in December 2013 entitled "Bitcoin Financial Risk Prevention Notice" (Link in Mandarin). Several points were highlighted:
1. Due to various factors such as limited supply, anonymity and absence of a centralized issuer, bitcoin is not an official currency, but a virtual product that can not be used in the open market .
2. Not all banks and financial institutions are authorized to offer Bitcoin-related financial services or participate in Bitcoin trading activities.
3. All businesses and websites offering services related to Bitcoin must register with the necessary departments.
4. Due to the anonymity and cross-border functionality of Bitcoin, organizations providing Bitcoin-related services must implement preventative measures such as KYC to prevent money laundering. Any suspicious activity, including fraud, gambling and money laundering, should be reported to the authorities.
5. Organizations providing Bitcoin-related services should inform the public about Bitcoin and the technology behind it, and not mislead the public by giving it incorrect information.
In simple terms, Bitcoin is considered virtual merchandise (for example, gaming credits) that can be bought or sold in its original form without being exchanged for currency. It can not be defined as money – something that serves as a means of exchange, a unit of accounting and store of value.
Although the notification is dated 2013, it remains relevant with respect to the Chinese government's position on Bitcoin and, as mentioned, there is no indication that the prohibition of Bitcoin and cryptocurrency is prohibited. . Instead, regulation and education on Bitcoin and blockchain will play a role in the Chinese cryptographic market.
A similar opinion was released in January 2017, again stressing that Bitcoin is a virtual commodity and not a currency. In September 2017, the boom of initial parts offerings (ICO) led to the publication of a separate notice entitled "Notice Concerning the Prevention of Financial Risks Relating to Tokens Issued". Shortly thereafter, ICOs were banned and Chinese exchanges were examined and eventually closed. (The decline is 20/20, they have made the right decision to ban the ICO and stop the games insane). Another blow came to the Chinese cryptocurrency community in January 2018, when mining activities were severely repressed, citing excessive electricity consumption.
Although there is no official explanation for the crackdown on cryptocurrencies, the control of capital, illegal activities and the protection of its citizens against financial risks are among the main reasons given by the experts . Indeed, Chinese regulators have put in place stricter controls, such as the cap on withdrawals abroad and the regulation of foreign direct investment to limit capital outflows and guarantee domestic investments. The anonymity and ease of cross-border transactions have also made cryptocurrency a preferred means of money laundering and fraudulent activity.
Since 2011, China has played a crucial role in the meteorological rise and fall of Bitcoin. At its peak, China accounted for more than 95 percent of global Bitcoin trade and three-quarters of mining activity. With the intervention of regulators to control commercial and mining activities, China's dominance has been considerably reduced in exchange for stability.
Countries such as Korea and India have followed the crackdown, casting a shadow over the future of cryptocurrency. (I will reiterate my point here: countries regulate cryptocurrency, not ban it). Without a doubt, more and more countries will join us in the coming months to rein in the tumultuous encrypted market. Indeed, a kind of order was long overdue. Over the past year, crypto-currencies have experienced unprecedented price volatility and ICOs are literally occurring every other day. In 2017, total market capitalization increased from $ 18 billion in January to a record $ 828 billion.
Nevertheless, the Chinese community has a surprisingly good morale despite the repression. Online and offline communities are booming (I've personally attended quite a few events and visited some of the companies) and blockchain startups are growing all over China.
Large blockchain companies such as NEO, QTUM and VeChain are attracting tremendous attention from the country. Startups such as Nebulas, High Performance Blockchain (HPB) and Bibox also gain a lot in traction. Even giants like Alibaba and Tencent are also exploring the blockchain's capabilities to improve their platform. The list goes on and on, but you understand me; it's going to be HUGGEE!
The Chinese government has also adopted blockchain technology and has intensified its efforts in recent years to support the creation of a blockchain ecosystem.
In its 13th Five-Year Plan (2016-2020), China advocated the development of promising technologies, including blockchain and artificial intelligence. It also plans to strengthen research on the application of fintech to regulation, cloud computing and big data. Even the People's Bank of China is also testing a digital currency prototype based on a chain of blocks; However, as it is probably a centralized digital currency endowed with encryption technology, its adoption by Chinese citizens remains to be demonstrated.
The Trusted Open Block Ministry of Industry and Information Technology's launch and the China Technology and Industrial Development Forum are among the government's other initiatives. Chinese aimed at supporting the development of blockchain in China.
A recent report titled "China Blockchain Development Report 2018" from the Chinese Blockchain Research Center described the development of the blockchain industry in China in 2017, including the various measures taken to regulate cryptocurrency on the continent . In a separate section, the report highlighted the optimistic outlook for the blockchain sector and the massive attention given to it by venture capitalists and the Chinese government in 2017.
In summary, the Chinese government has shown a positive attitude towards blockchain technology despite its application to cryptocurrency and mining operations. China wants to control cryptocurrency, and China will control it. Repeated controls by regulators aimed to protect citizens from the financial risk of cryptocurrencies and to limit capital outflows. At present, it is legal for Chinese citizens to hold cryptocurrencies, but they are not allowed to carry out any form of transaction; hence the prohibition of trade. As the market stabilizes in the coming months (or years), we will undoubtedly see a renaissance of the Chinese cryptographic market. Blockchain and cryptocurrency go hand in hand (with the exception of the private channel where a token is not needed). Countries can not forbid cryptocurrency without banning awesome technology!
One thing we can all agree on is that the blockchain is still in its infancy. Many exciting developments await us and this is the best time to lay the groundwork for a world with blockchain.
Last but not least, HODL!