By David Drake
For more than 18 months now, China has waged war against cryptocurrencies. About a year ago, the country placed a ban on the sale of initial coin offerings and just weeks ago, it increased pressure on cryptocurrency activities.
But even as the country suppresses any efforts of digital asset trading by limiting speculation, it is increasingly embracing blockchain technology. The technology is known to facilitate secure transactions between parties, eliminate the need for intermediaries,such as banks, and provide a faster way of transferring funds at a more affordable rate.
As a result of these capabilities, the technology has captured the attention of numerous developers. This has resulted in the creation of blockchain-backed companies which utilize this technology to address real problems across sectors.
Such companies include web mining monetization platform, Gath3r, peer-to-peer crypto trading firm, BQT, and portfolio optimization platform LiveTradr. At the same time, the technology is increasingly being utilized to address challenges in the marketing and social spaces. In marketing, NoizChain, alongside IOU, are facilitating interactive marketing and online customer satisfaction, respectively. ONe Network and URAllowance are also using blockchain to enhance social media security and family interactions, respectively.
According to Joseph Oreste, founder & CEO of Qupon, the preference for blockchain depends on the transparency that blockchain networks offer users.
He says, “Private ledgers mean someone else owns your data, it’s that simple. I think people are starting to see the privacy hazards with private services. That’s what is so great about public blockchain ledgers, they offer an open and transparent network. This is especially important with regard to e-commerce. Qupon is building a global e-commerce marketplace for merchants to advertise digital coupons on a public ledger.”
Reports show that since 2016, China has invested $3.57 billion in blockchain technology. This past May, the country’s president referred to blockchain as a breakthrough technology. In the recent past, some local governments, such as Nanjing, Shanghai and Hangzhou, have made public their investments in blockchain.
Andrey Sikorsky, the Operations Leader at IOU, believes that China could well be on its way to becoming a global leader in blockchain.
He says, “The largest technology companies in China such as Alibaba Tencent, consenSUS and others very quickly introduce blockchain technology. Because the government of China puts these developments into one of the priorities of the country’s development. China seeks to take a leading position in the efficiency of speed and economy in the political and strategic arena of the world. Thus, we believe that China with financial capabilities and a huge number of technical specialists have many chances to complete this mission.”
As its investment in blockchain increases, China is still clamping down on digital currency speculation. The price of Bitcoin rose to a high of $19000 towards the end of last year, then set on a downward spiral early this year.
A cryptocurrency crush experienced in February has been attributed to its high volatility as well as those of more than 1200 other cryptocurrencies that emerged after Bitcoin. An impending Chinese government crackdown on cryptocurrencies is thought to have contributed to the crush at the time.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.