Does China Have A Role In Bitcoin’s Rise

Everyone loves Bitcoin. Personally, I can’t get enough of it. Though I just sold all of my XRP, as an aside, because I learned it was being delisted from Coinbase next week, Bitcoin, on the other hand, I am keeping for the moonshot.

Now that Grayscale has its Bitcoin Trust exchange-traded fund, the market cap for Bitcoin has hit a trillion dollars. It is approaching $40,000 per coin.

We know the role central banks are playing in BTC’s rise: debasement of currency via money printing. But what about China?

This is the most curious one for me, especially following what appears to be the self-exile of Jack Ma, the billionaire founder of Alibaba BABA +4.1%. Ma got into some trouble with Beijing regulators following the postponed listing of his fintech company Ant Financial, owners of AliPay, which is ubiquitous in China (you can also find it at your local CVS for some reason). Now there is talk of breaking up the Jack Ma tech empire, something akin to what anti-Big Tech advocates here in the U.S. have been asking be done of Google and Facebook.

One can almost see Chinese billionaires buying up Bitcoin, just in case Beijing comes for their wealth. Lord knows the dollar is in decline, and they probably already own a ton of stocks.

The Chinese currency, out of all the G10 currencies, has the strongest statistical correlation to BTC over the last 12 months, at around 84%. That means that as the RMB gets stronger against the dollar, so does Bitcoin, 84% of the time, says Vladimir Signorelli, head of Bretton Woods Research in Long Valley, New Jersey.

“When Bitcoin rises, the RMB is rising right along with it,” he says, adding that the euro has a 74% to 75% correlation with Bitcoin. The Russian ruble has a 25% correlation.

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And then there is the Jack Ma effect. He’s the “canary in the coal mine” says Signorelli. “There could also be an internal dynamic in China keeping Bitcoin bullish,” he says. “You have Jack Ma’s total disappearance since October. Was it a canary in the coal mine for every millionaire and billionaire in China that you need to have a Plan B? There is a real risk of outright confiscation of your wealth. They see it clearly now.”

China’s crypto market has a massive user base. Singapore-based ZB.com Exchange is one of the top four exchanges that are popular among Chinese users. “Our in-app community is very active with Chinese users right now,” says Oman Chen, ZB’s CEO. The seven-year-old company runs digital asset trading platforms ZBM, ZBX and Bithi, cryptocurrency wallets like BitBank, and has a venture capital and research arm. “Most of these traders are very optimistic about the price of Bitcoin,” Chen says.

QCash, a stable coin trading pair supported on ZB.com, which is anchored to the Chinese yuan, is seeing strong trading volumes, according to ZB data. QC is the most liquid yuan-based stable coin.

China’s Digital Yuan Experiment

Last month, China gave its digital yuan a test drive in Suzhou. The experiment lasted roughly 10 days, but stands as a testament to China’s interest in crypto beyond the Bitcoin phenomenon.

Xinhua newswire reported on one resident surnamed Lu who had bought some snacks at a store in the Tianhong Shopping Mall using digital yuan. She transferred 66.6 yuan (about $10.21) from her digital wallet to the vendor’s account with no need for a cell tower connection.

Lu was one of the 100,000 residents of Suzhou who were given 200 digital yuan in the pilot program and could spend it at designated brick-and-mortar stores as well as online at JD.com between Dec. 12 to 27. Noted: not Alibaba.

This doesn’t mean the Chinese government loves Bitcoin, of course. Just that its population is more accustomed to the concept of cryptocurrency than the average American. Go ahead, ask your dad if he knows what Bitcoin is.

“The Chinese government considers Bitcoin a commodity, not a currency,” says Aries Wanlin Wang, a Chinese cryptocurrency investor.

The digital RMB (DCEP) program in Suzhou has adopted some blockchain functionalities but it is not the fully decentralized kind that true Bitcoin lovers want.

“The Chinese government wants to promote the digital yuan before anyone else,” says Wang. “They see the potential of a new payment and clearance system in the digital currency era. It may substitute the current Swift system,” he says, which tracks interbank transactions and is led by the U.S.

Crypto For Poor Countries

Last month, Venezuela’s government said it was giving up on its currency and would switch slowly to a digital system. Their Bolivar is worth less than seashells found on Margarita Island so it makes sense.

Argentina should be next. All of this will drive continued enthusiasm for Bitcoin, no matter the price. At the start of 2020, Ripio, one of Argentina’s largest crypto exchanges, had around 400,000 users and then ended the year with over a million.  

Argentina’s tight control over dollars (no one wants pesos there), coupled with a new 35% tax, plus limits as to how many dollars you can buy (just $200), means the Argentines have discovered Bitcoin in a big way, too.

China’s currency, unlike those two basket case currencies of South America, is strong and getting stronger. Moreover, its central bank has been moving on a digital form of its currency for at least three years. They lead on this within the big and medium-sized emerging markets. Indeed, the only country ever talking about Bitcoin is Venezuela, run by the mightily corrupt Socialists United party.

“Even though Beijing has a strong resistance to cryptocurrencies, namely Bitcoin, they have taken the part of blockchain technology that is beneficial to their country’s development,” says Chen from Singapore.

“The central bank’s digital currency can not only give the country a higher level of control over the fiat currency but also snatch back some Chinese users from third-party digital payment platforms such as Alipay and WeChat,” Chen says. Since central bank digital currency is issued at the national level, like fiat currencies, the state endorsement is more powerful to skeptics and it accelerates demonetization in favor of crypto.

Bitcoin, in China at the moment, is rising with the fortunes of a stronger yuan and the digital yuan experiments.

Rich Chinese nationals may be thinking, ‘you know what, I rather have something that is loaded and convertible and beyond the reach of Beijing and perhaps the reach of the PBoC’ — that’s the central bank of China.

In this way, they don’t have to worry about currency devaluation and Bitcoin becomes a tax hedge. The top income tax rate in China is around 45%.

People might not remember, but this time last year gold was at $1515 an ounce; it’s now around $1850. The dollar on a gold basis has lost 20% or more of its value, notes Signorelli, searching for reasons why Bitcoin has doubled in less than four weeks.

“If you put your currency and inflation hedges into BTC instead of gold, man…you’re doing fantastic,” Signorelli says. “My suspicion is that as Chinese wealth increases, it is going to be increasingly difficult for Beijing to prevent their nationals from seeking ways to preserve their capital outside of the RMB. If they can’t buy U.S. real estate or stocks, and U.S. and European bonds pay little, they’ll take some more risk with Bitcoin, I think.”

Kenneth Rapoza

Kenneth Rapoza

I’ve spent 20 years as a reporter for the best in the business, including as a Brazil-based staffer for WSJ. Since 2011, I focus on business and investing in the big emerging markets exclusively for Forbes. My work has appeared in The Boston Globe, The Nation, Salon and USA Today. Occasional BBC guest. Former holder of the FINRA Series 7 and 66. Doesn’t follow the herd.

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China Uncensored

Bitcoin. It’s a big deal in China. It can be used to subvert government controls. And the government can’t shut it down. At the Oslo Freedom Forum, China Uncensored producer Matt Gnaizda sat down with Bitcoin expert Leo Wheese. He’s the President of the Bitcoin Association of Hong Kong. YouTube demonetizes our channels! We need your support!! https://www.patreon.com/ChinaUncensored We also accept bitcoin! http://www.chinauncensored.tv/bitcoin/ Make sure to share this video with your friends! __ Subscribe for updates: https://www.youtube.com/ChinaUncensor… __ Twitter: https://twitter.com/ChinaUncensored Facebook: http://www.facebook.com/ChinaUncensored Instagram: http://instagram.com/ChinaUncensored or check out the China Unscripted Podcast! http://chinaunscripted.libsyn.com/ __ © All Rights Reserved. #bitcoin xrp libra bitcoin news btc

China’s Central Bank Proposes a Blockchain-Based Trade-Finance Platform

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The People’s Bank of China proposed a blockchain trade financing information platform for the Guangdong-Hong Kong-Macao Greater Bay Area.

A number of governing entities in China recently came together to issue an official document, proposing the development of a blockchain-based trade finance platform.

Contributors included the People’s Bank of China, the China Banking Regulatory Commission, China Securities Regulatory Commission, and the Foreign Exchange Bureau.

In the document, the four organizations submitted their opinions on how best to finance the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, with an emphasis on global trade and finance.

Disrupting how cross-border trade info is shared

In an attempt to develop and implement better financial technology in the region, the proposal states that the country should build a blockchain-powered trade financing info service platform “under the premise of legal compliance and commercial voluntariness.”

The platform, they stated, would help participating banks securely share information pertaining to cross-border traders through a reliable source.

Blockchain’s decentralized infrastructure makes third-party intervention unnecessary when sharing trade info between members. This makes for a highly secure foundation for a trade finance information platform.

They further proposed the use of artificial intelligence and big data in marketing, risk prevention, and financial supervision.

China is going both local and global on blockchain

China is spearheading blockchain innovation faster than most other countries. Both its local and central governments are consistently experimenting to disrupt various industrial sectors.

A Cointelegraph report from April cited that the government launched its first blockchain platform for providing government services in the eastern China province of Anhui. The platform was intended to provide electronic certificates and licences.

China also recently launched a Blockchain-based Service Network that allows companies from all over the globe to develop and run blockchain applications.

Additionally, during a meeting with the Financial Technology Committee yesterday, the People’s Bank of China deputy governor, Fan Yifei, urged China to accelerate its blockchain adoption strategy.

By:

Source: https://cointelegraph.com

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How Sony Keeps Innovating With Blockchain Technology

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Sony Corporation (Sony) has been at the forefront as the world’s leading innovator for years. This has resulted in Sony owning the largest music business through Sony Music Entertainment, operating the largest video game console business and being the leader in video game publishing business. This isn’t surprising as Sony has been a household name since the early ‘90s and their current position at the top is just Sony’s natural spot. The Japanese company is heavily invested in several new technologies including blockchain and AI, and the speed at which their testing and investments in the space are rolled out is remarkable.

Last week it was announced that Sony have developed a high-speed processing technology that facilitates data transactions for a new breed of database platform called Blockchain Common Database (BCDB). The work was done as part of a transportation-focused Mobility as a Service (MaaS) initiative led by the Netherlands Ministry of Infrastructure and Water Management back in 2019. What makes this technology interesting is that they have achieved successful execution and storage of seven million transactions per day, simulating a real-world scenario where buses, cars, bikes and taxis all share their location and other metrics.

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Of course, Sony is no stranger to investing in the blockchain space. In 2018 they announced that they are working on a platform that will control and manage digital content and rights. They have also created a portal for managing educational course records and transcript management through blockchain, an initiative conducted by Sony Global Education along with Fujitsu.

Since Japan has been one of the first countries to recognize the value of digital assets and begin creating a positive regulatory framework toward cryptocurrencies and specifically bitcoin as early as 2017 we have seen a lot of blockchain and digital assets investments coming from the Far East. Sony, through their investments arm Sony Financial Ventures (SFV), have participated in the latest funding round of the Securitize platform. This platform, which specializes in digital securities, has a strong connection to Japan and Asia but their roadmap is focused globally.

With all the work and investments they are putting into the enterprise blockchain space, Sony will be a strong contender for next year’s 2021 Blockchain 50 list. The list has already welcomed the presence of one of Sony’s competitors, Samsung. Overall, Sony is showing a strong desire and willingness to innovate in using blockchain technology for supplementing their existing infrastructure and business use cases. From those efforts, the net winners will be their consumers and partners, who will benefit from access to better and faster services at an eventually optimized price.

Follow me on Twitter or LinkedIn.

I am an enterprise blockchain architect based in New York. I have deep technical expertise in blockchain and DLT protocols and systems. My coverage includes weekly round-up of enterprise blockchain developments. Previously, I co-founded BlockEx which developed several financial services products including an innovative Digital Asset Exchange Platform with bonds issuance capabilities.

Source: https://forbes.com

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Check out a written version of this script on our website: https://blockchain.wtf/2018/05/series… Business on the Blockchain is a new series aimed at keeping you up to date on all of the big business moves towards blockchain technology. More and more businesses are exploring cryptocurrencies and blockchain, and we’re here to help you understand how some of these businesses are making this transiton. It’s an exciting time for blockchain adoption, check out which businesses are jumping onto the wave! Sony has been one of the most popular consumer technology brands for a good while now. They are Japanese based, but no matter where you live, you’ve likely heard of htem. Whether it be the Walkman or the Playstation, Sony has long cemented itself as giant in technological innovation over the span of several decades. They are constantly trying to create technology that will address today’s problems. The issue that Sony has turned to the blockchain to solve: Representing digital rights. On April 26th a patent was published, and it revealed that Sony had applied to use blockchain technology as a means of tracking digital rights. They have named it the Blockchain-Based Digital Rights Management (DRM) By implementing an immutable blockchain, ownership could be imprinted via transaction, permanently placing this information across multiple nodes. Reach out and sign up for our mailing list at: https://blockchain.wtf/contact-us/ Interact with us on social media and stop by our website: * Website: https://blockchain.wtf * https://twitter.com/blockchainwtf * https://facebook.com/blockchainwtf * https://steemit.com/@blockchainwtf * https://medium.com/@questions.blockch…

Blockstream Reveals Massive Bitcoin Mining Facilities, Fidelity An Early Customer

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On Thursday, blockchain technology company Blockstream revealed details related to their massive Bitcoin mining data centers in Quebec, Canada and Adel, Georgia. The facilities account for a combined 300 megawatts worth of energy capacity, and they’re currently available for hosting enterprise-level mining activities, in addition to Blockstream’s own mining operations.

Blockstream plans to open their facilities to smaller scale miners in the future. For now, two of their active customers include Fidelity Center for Applied Technology and LinkedIn founder Reid Hoffman.

The size of Blockstream’s mining facilities cannot be overstated. According to Blockstream CSO Samson Mow, the facilities would account for roughly 6 exahashes of Bitcoin mining power if used at full capacity with the latest ASIC mining hardware. This would have equated to 10% of Bitcoin’s total network hashrate less than a month ago, according to BitInfoCharts. However, the Bitcoin network hashrate recently skyrocketed to around 80 exahashes this week.

In addition to their mining centers, Blockstream will soon launch the first mining pool with a focus on putting more power back into the hands of individual miners via the BetterHash protocol.

Blockstream Concerned About Bitcoin Mining Centralization

According to a company blog post, Blockstream first got into Bitcoin mining due to concerns around the centralization of the industry back in 2017. At that time, the activation process for Segregated Witness (SegWit), which was a capacity increase and bug fix for the Bitcoin network, had become politicized by Bitcoin miners in the eyes of many Bitcoin developers and users.

Concerns related to Bitcoin mining centralization were recently discussed on a panel at the Bitcoin 2019 conference in San Francisco. Genesis Mining CEO Marco Streng explained why Bitcoin users should be more alarmed about the level of centralization in mining, while longtime Bitcoin developer Matt Corallo did his best to point out the issue may not be as bad as it seems at first glance.

Notably, Blockstream CEO Dr. Adam Back, who was cited in the original Bitcoin white paper, also spoke at the conference regarding his thoughts on the future of Bitcoin and other cryptocurrencies alongside Yugen Partners Chief Scientist Dr. Scott Stornetta, who was also cited in the Bitcoin white paper.

Putting Power Back in Miners’ Hands

In addition to pushing for the geographic decentralization of Bitcoin mining, Blockstream’s upcoming mining pool should be helpful due to its use of BetterHash. The BetterHash protocol, which was developed by the aforementioned Corallo, solves a key issue with mining centralization in that it allows individual miners to choose which transactions go into new blocks rather than the mining pool operators.

While Bitcoin mining is rather centralized in terms of mining pools, the picture looks much better in terms of the diversity of entities that are actually operating the hardware. Putting individual miners in control of transaction selection means collusion in terms of transaction censorship, blockchain reorganizations, or other types of 51% attacks on the network would be much more difficult.

Braiins also recently announced a new mining protocol, called Stratum v2, that offers a similar upgrade in terms of the decentralization of transaction selection (based on Corallo’s work).

When asked why Blockstream decided to go with BetterHash rather than Stratum v2, Blockstream CSO Samson Mow stated, “Stratum v2 seems to still be in the discussion phase, and we started with BetterHash months ago.”

Some critics may argue that implementing BetterHash while also developing large Bitcoin mining data centers may be a bit of a contradiction in terms of promoting decentralization, but Mow pushed back on this argument when reached for comment.

“I don’t believe Blockstream Mining poses centralization risks,” said Mow. “If anything, Blockstream Mining serves to decentralize the Bitcoin mining ecosystem in many ways. We’re self-mining with just a small portion of our available power, with the rest allocated to customers, and we have plans to make the hosting service available to smaller miners that otherwise would not be able to mine effectively. Also, by leveraging the BetterHash protocol in our mining pool, all of our customers can run their own full-nodes and build block templates. This means the pool cannot use their hashrate for censoring transactions or falsely signaling readiness for Bitcoin protocol upgrades – which has happened in the past as with SegWit2x.”

Even with these concerns around Bitcoin mining centralization, some U.S. lawmakers are convinced they would not be able to ban Bitcoin.

On the other hand, Facebook’s Libra cryptocurrency project would be much easier to manipulate, regulate, and control. That said, multiple members of the Bitcoin industry have pointed out the roundabout ways Bitcoin could benefit Facebook’s Libra.

That said, even if improvements are made to the decentralization and censorship resistance of Bitcoin from a technical level, the reality is the digital cash system still faces a serious regulatory issue in terms of its use as a payments mechanism due to the way in which the crypto asset is taxed.

Follow me on Twitter. Check out my website.

I’m a writer who has been following Bitcoin since 2011. I’ve worked all over the Bitcoin media space — from being editor-in-chief at Inside Bitcoins to contributing to Bitcoin Magazine on a regular basis. My work has also been featured in Business Insider, VICE Motherboard, and many other financial and tech media outlets. I’m mostly interested in the use of Bitcoin for transactions that would be censored by the traditional financial system (think darknet markets and ransomware) in addition to the use of bitcoin as an unseizable, digital store of value. Altcoins, appcoins, and ICOs don’t make much sense to me. Find all of my work at kyletorpey.com. Disclosure: I hold some bitcoin

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