The Chinese government has decided to be a leader in the field of blockchain, a technology that has enabled the creation of virtually all crypto-currencies and has thousands of potential applications, far beyond the crypto-currencies we are already familiar with, such as bitcoin, ethereum, stellar, among others. Hangzhou, Alibaba’s home city, has invested more than $1 billion in startups specialising in blockchain, while Nanjing, another Chinese city, has invested $1.5 billion in the same sector.
Historical overview
Since 2018, these central government-led blockchain investments have permeated the development of the Chinese economy. The Chinese central government itself has repeatedly signalled that it will invest heavily in blockchain technology and faithfully believes in it as a global disruptor. As a curiosity, as of mid-2019, China has designed three times as many blockchain-related technology patents as the US.
In the new digital economy, it is increasingly clear that those who lead a particular trend, i.e. those who anticipate the next stages of human transformation, will have greater influence over those who consume the technologies present at this moment in history. This brings us to the crypto-currency market and China’s influence on the rules of the game.
Note that in early 2018, China took on the role of global venture capitalist by investing heavily to be a leader in blockchain technology. Already in 2019, Chinese President Xi Jinping has openly stated that the country will use blockchain in various areas of industry, including healthcare, transport, and why not the financial system?
At this point, we cannot confuse the growing global interest in crypto-currencies with China’s interest in blockchain, as there is a trivial difference between the speculative nature of crypto-currencies and China’s actual interest in the technology that gave rise to them.
If the best-known application of blockchain is bitcoin, why is China so interested in this crypto-currency? The answer to this question and many others about China and the future of crypto-currency mining there can be summed up in one word: “Control”.
China is the country to watch
China’s Communist Party doesn’t seem to handle decentralised control well, and that reflects directly on bitcoin, as any crypto-currency gives citizens power over their own economic relationships, which are mostly regulated by governments “to some extent”, even in liberal economies like the US.
For now, China is certainly not a ‘global trader’ to be ignored. Research shows that the global economic axis of wealth creation has never been further east than in recent years, which, given China’s billions invested in blockchain, is a sure guarantee that if there’s one country to watch when it comes to blockchain, it’s China.
