World CryptoMap: China
Tags: Maps, Cryptocurrency, China, Blockchain, Bitcoin

Happy Chinese New Year! to celebrate this amazing holiday, we’re going to visit a country with an immense density of crypto miners and traders, where cryptocurrencies are viewed as a valuable asset and a means of safe investment. China is one of the main exchange markets and home to some of the biggest bitcoin ‘mining pools’ in the world. Unfortunately, the ban on cryptocurrencies from Chinese Government had a negative effect on the whole industry. Despite this fact, there are plenty of reasons to stay optimistic!

Let’s go sightseeing!

Government & Regulation

In 2016, blockchain technology development was added into the 13th Five-Year Plan — the plan for national development over 2016–2020 — thus making China one of the first states in the world to accept the technology in its official policy. It’s important to note that state-sponsored usage of the blockchain is heavily favoured, as opposed to decentralized practices characteristic of many blockchain-based projects. It might still be too early to make any conclusions, but at the very least, this governmental support is likely to boost the country’s R&D.

Bitcoin hasn’t enjoyed such a warm welcome from Chinese officials, though. Let’s take a quick look at the timeline:

December 2013: People’s Bank of China (PBoC) issues a “Notice on Preventing Financial Risk of Bitcoin”, prohibiting all crypto-related operations for banks. The main reason for this measure is the lack of safety due to Bitcoin’s decentralized nature. At this point, Bitcoin has already gained massive popularity throughout China;

People’s Bank of China (PBoC) issues a “Notice on Preventing Financial Risk of Bitcoin”, prohibiting all crypto-related operations for banks. The main reason for this measure is the lack of safety due to Bitcoin’s decentralized nature. At this point, Bitcoin has already gained massive popularity throughout China; December 2016: China introduces blockchain technologies into its 13th Five-Year Plan;

China introduces blockchain technologies into its 13th Five-Year Plan; September 2017: China bans all ICOs. Shortly after, Chinese BTC exchanges are forced to halt all trading operations (particularly crypto-to-fiat ones) because of government investigations in the crypto industry. Eventually, the oldest Chinese crypto exchange, BTCC, shuts down all domestic operations. Yet even after the ban on cryptocurrency trading, the Chinese government along with local corporations like Tencent and Alibaba continue to see huge potential in blockchain technologies and focus on developing decentralized financial platforms;

China bans all ICOs. Shortly after, Chinese BTC exchanges are forced to halt all trading operations (particularly crypto-to-fiat ones) because of government investigations in the crypto industry. Eventually, the oldest Chinese crypto exchange, BTCC, shuts down all domestic operations. Yet even after the ban on cryptocurrency trading, the Chinese government along with local corporations like Tencent and Alibaba continue to see huge potential in blockchain technologies and focus on developing decentralized financial platforms; January 2018: China bans P2P and OTC markets. By this point, Chinese state regulators have worked out a long-term strategy to eliminate cryptocurrency from the national economy by announcing a ban on foreign crypto-related platforms. This is obviously seen as a big deal given the immense amount of crypto mining conducted in China;

China bans P2P and OTC markets. By this point, Chinese state regulators have worked out a long-term strategy to eliminate cryptocurrency from the national economy by announcing a ban on foreign crypto-related platforms. This is obviously seen as a big deal given the immense amount of crypto mining conducted in China; February 2018: Access to offshore crypto exchanges and ICO websites is blocked;

Access to offshore crypto exchanges and ICO websites is blocked; May 2018: China’s president Xi Jinping praises the blockchain technology, calling it “a part of the technological revolution”. The State Council of China urges local financial authorities and state-funded research centres to put extra effort into the development and commercialization of blockchain technologies. A blockchain-powered system to combat fraud is revealed by the PBoC;

China’s president Xi Jinping praises the blockchain technology, calling it “a part of the technological revolution”. The State Council of China urges local financial authorities and state-funded research centres to put extra effort into the development and commercialization of blockchain technologies. A blockchain-powered system to combat fraud is revealed by the PBoC; June 2018: China’s largest TV broadcaster CCTV informs the viewers that “the value of blockchain is 10 times that of the Internet”. In the hour-long video, Chinese government officials team up with international experts to educate the audience on the concept and potential of blockchain technologies.

China’s largest TV broadcaster CCTV informs the viewers that “the value of blockchain is 10 times that of the Internet”. In the hour-long video, Chinese government officials team up with international experts to educate the audience on the concept and potential of blockchain technologies. July 2018: China’s central bank has hailed it’s cryptocurrency crackdown a complete success. Declared by the People’s Bank of China (PBoC) and reported by state media, data apparently shows that the Chinese currency is now involved in less than one percent of all Bitcoin $BTC▼1.62% trades worldwide.

China’s central bank has hailed it’s cryptocurrency crackdown a complete success. Declared by the People’s Bank of China (PBoC) and reported by state media, data apparently shows that the Chinese currency is now involved in less than one percent of all Bitcoin $BTC▼1.62% trades worldwide. August 2018: Authorities warned about risks from illegal fundraising activities under the guise of “cryptocurrencies,” and at least one major business district in Beijing banned promotional cryptocurrency events.

Authorities warned about risks from illegal fundraising activities under the guise of “cryptocurrencies,” and at least one major business district in Beijing banned promotional cryptocurrency events. November 2018 : Taiwan officially tightened anti-money laundering (AML) policies targeted at crypto exchanges, requesting exchanges to monitor and prevent any illegal transaction processed using digital assets. Pressure from China was cited as possible reasons for this decision.

: Taiwan officially tightened anti-money laundering (AML) policies targeted at crypto exchanges, requesting exchanges to monitor and prevent any illegal transaction processed using digital assets. Pressure from China was cited as possible reasons for this decision. December 2018: The People’s Bank of China (PBoC), the country’s central bank, highlighted the illegality of Security Token Offerings (STOs) in the country.

The People’s Bank of China (PBoC), the country’s central bank, highlighted the illegality of Security Token Offerings (STOs) in the country. January 2019: China has released its latest government-sponsored rankings of major cryptocurrencies, placing Bitcoin (BTC) in 15th, while EOS was 1st and Ethereum was 2nd. The rankings were released in a press release on Jan. 24. The crypto rankings by China’s Center for Information and Industry Development (CCID) were first announced in May last year. In this ninth edition of the index, EOS keeps its place as the top-ranked blockchain, which has been occupied by the platform since June 2018.

Mining

China is known for its numerous plants manufacturing video cards and ASIC miners. Thus, Chinese miners are able to purchase the necessary equipment at a much lower cost compared to the rest of the world.

The country can already boast a remarkably low price for electricity; add to it the decision of the Chinese government to encourage the industrial production of cryptocurrency by offering additional discounts on electricity to crypto farm owners, and you can see why China is one of the world’s largest mining centers.

Farms for crypto mining are strewn all across the country. Notable examples include Sichuan (also known as “the capital of bitcoin mining”, with its industrial farm placed right next to a hydroelectric power station), Liaoningprovince (with a three-story farm in its small city of Dalian accounting for over 3% of the entire Bitcoin network’s hash rate), Xinjiang, Inner Mongolia and Yunnan.

Business & Research

China is one of the most technologically advanced countries in the world. With its tendency to be among the first adepts of new concepts (such as QR-powered payments), it comes as no surprise that even before the new state investment into blockchain technology, China had already become a leader in that area: