What Is Behind China’s Leadership Role In The Cryptocurrency Industry?
China has maintained a leadership role in the Bitcoin and cryptocurrency industry. Almost every major startup in this industry and other related technologies look forward to some kind of affiliation with China. Considering one of the fundamental aspects of the cryptocurrency industry, which is Bitcoin mining, China alone accommodates over 50% of Bitcoin miners. This is outright domination, and nothing less than leadership. What everyone will want to know at some point is why this is so.
In an earlier report on 8BTC, it was revealed that China accounts for 65% of the world’s hash power which is used to measure the power of computers linked to the Bitcoin network. This is despite all the regulatory measures that are in place, which in essence will be expected to slow down the level of adoption. Perhaps, on the other hand, the multitude of regulations that we see in China may be as a result of the enormous level of cryptocurrency activity going on within the region.
According to Jason Cassidy, CEO of GAME Credits, China’s dominant role in cryptocurrency has been a theme now for many years. He notes that apart from ASICMINER which dominated the mining equipment industry in the early days of Bitcoin, many other Chinese startups have joined the game. Anyone who has been in the industry long enough will corroborate Cassidy’s view on this point, especially in remembrance of when Bitcoin mining was such a profitable venture. With a couple of Bitcoin halving events already achieved, the reward level of Bitcoin mining has dropped exponentially. Perhaps, this is one of the reasons why Bitcoin mining is no longer as popular as it used to be.
When I first entered the industry in 2012, China was already playing a leading role in the Bitcoin mining space. Back then the dominant player was ASICMINER however over time more and more Chinese startups have joined the fray and helped China cultivate a leading role in the cryptocurrency world.
Cassidy explains that technology is a huge part of Chinese GDP and this will continue to grow as the nation pushes the limit of innovation across many domains. According to him, the government is also looking at introducing its own digital Yuan in the near future which will bring a new level of blockchain awareness and adoption for the country. Details about China’s activity around digital Yuan and the pilot testing of the CBDC has also been reported on 8BTC. The report explained how China is leading the race in this area of technological development.
As the future of money becomes cashless and transitions to a purely digital world, Cassidy believes that the arms race for digital currency supremacy will heat up. This, he notes, may mean that Big Tech becomes the replacement for banking over the coming decade and whomever is positioned best to win that race will become the de facto leader of this sector. “China’s current trajectory certainly favors them in this regard given their affinity for technological innovation”. The nation’s support for emerging technology and the share population of willing citizens to venture into the industry cannot be overemphasized. When is comes to exercises like Bitcoin mining, factors like the weather and cost of electricity might play a supportive role. However, most importantly is the willingness of the people to participate, and the creation of an enabling environment by the government.
Competitors like the US and many European nations are actively working to grow their exposure within cryptocurrency – the question is are they doing enough to compete? This is a story that Cassidy believes will play out over the coming years. However, he foresees China holding its leadership position in the realm of cryptocurrency.
“The future of China is one that is digital and the government will continue to support this trend for the foreseeable future”, concludes Cassidy.