China’s Crypto War - Sharon's Straight Talk
Bitcoin price is known to be volatile. But with the new-found support from mainstream corporations and investors, will it be smoother sailing from now on? My feeling is that we may be in for a few more twists and turns.
One big shadow hanging over Bitcoin is China. The Chinese government has been actively preparing for a major crypto battle, which may very well be its last ditch effort to dominate the world and hold on to power in China. How the West, particularly the US, responds will decide the future of Bitcoin and more importantly, who is going to come out on top, a totalitarian state or Western democracies.
To give you a little background about Bitcoin, this beautiful, fancy image is all over the place. But real bitcoin looks nothing like this. On its best day–well actually–any day, it looks more like this. Bitcoin is basically a combination of 0s and 1s generated virtually by computer software.Think of the bitcoin system as a computer game of treasure hunt. Based on the rules written by whoever designs the game, you get rewarded with gold and gems after completing certain tasks.
You may have heard the term “blockchain”. This is the technology that the Bitcoin system runs on. Details of every bitcoin transaction that has ever taken place are stored in the blockchain. It is called “blockchain” because processing is done in batches, or blocks. Those blocks are then linked to each other, creating a chain of blocks.
Bitcoin blockchain is a public blockchain, meaning it is decentralised and no single organisation controls it. Everything that is validated on the bitcoin blockchain cannot be altered.The security makes it possible for people to send and receive coins directly without having to go through a bank which normally charges a hefty fee. This, by the way, is a big reason banks don’t like cryptos. They lose a good source of revenue, and are becoming irrelevant as cryptos gain popularity. So, how does China come into play relating to the cryptos? Well, it is no secret that China has never been a fan of Bitcoin.
As early as 2013, the Chinese government banned all financial institutions from dealing in bitcoin. In 2017, the government shut down all crypto exchanges within its borders.
The ban was hardly a surprise. Bitcoin is decentralised, resistant to surveillance and censorship. The technology makes it possible for Chinese to bypass the country’s strict exchange control and move their wealth to a safer destination. If that happens on a large scale, the Chinese economy will not hold. But China didn’t just stop at the ban. It went on the offence. Watch more from Sharon’ Straight Talk