Yesterday, Bitcoin blew up… in China. As reported by Blockonomi, Xinhua, the leading state-run publication (and the purportedly most-read media outlet) of the People’s Republic of China, released an entire article on Bitcoin.
The article, whose title roughly translates to “Bitcoin: The First Successful Application of Blockchain Technology,” was seen by many on Twitter as a ground-breaking development for the cryptocurrency space; Xinhua’s readership likely ranges in the dozens of millions.
Unfortunately, though, the article isn’t as bullish or positive for the cryptocurrency space as the headline implies. Here’s why.
Not Good for Bitcoin?
It’s no secret that China has recently grown to dislike Bitcoin. While the nation’s leader, President Xi Jinping, last month announced that China should formally adopt blockchain technologies, cryptocurrencies remain largely restricted; the bans on Bitcoin trading, cryptocurrency events, ICOs, certain media outlets, the use of WeChat and AliPay to transact money for digital assets, and so on seemingly remain in place.
It should maybe come as no surprise then that the aforementioned Xinhua article about Bitcoin wasn’t entirely optimistic. Sure, the piece had some highlights for cryptocurrency bulls — the headline, for one, is a nice touch — it gets a bit more harrowing when you delve into the nitty-gritty of the piece.
Head of Fidelity-affiliated Avon Ventures, a cryptocurrency venture fund, Alex Thorn reminded to his followers that the article, while explaining the ins and outs of Bitcoin quite well, calls the cryptocurrency “highly concentrated/centralized” phenomena, something that is bad for the climate, and is something “most importantly” used for black market transactions.
It also asserted that the cryptocurrency markets are hyper-volatile — a characteristic that pundits like Facebook’s David Marcus say make Bitcoin unviable as a digital currency, despite its youth to, say, the U.S. dollar — and the idea that Bitcoin may be a tulip bubble, something that mainstream economists often claim it is.
Thorn did joke, however, that China “isn’t” bad for the environment, centralized, and a 100% good actor — criticizing the hypocrisy of the nation bashing Bitcoin.
Chinese state media (read: government) calls bitcoin:
•bad for climate
•only used for black market txs
In other news, black is white, up is down, and China is good for the environment, definitely not centralized, and 100% only does good. https://t.co/ivzOKu35sO
— Alex Thorn (@intangiblecoins) November 11, 2019
It is important to note that this isn’t the first time that a state-affiliated actor has tried to bash Bitcoin by way of an article. Per previous reports from Blockonomi, the People’s Daily, another state-run outlet (often called a state mouthpiece by Western media), reminded the Chinese that Xi’s support for blockchain does not equate to support for cryptocurrency:
“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”
This article also purportedly called cryptocurrencies a term that directly translates to “air coins,” Chinese slang for “s**tcoins,” according to some involved in China’s cryptocurrency space on Twitter.
“China Coin,” Not Bitcoin
China’s seeming attempts to try and discredit Bitcoin come ahead of the launch of a sovereign cryptocurrency. It isn’t a stretch of the imagination to assume, then, that China is making use of anti-Bitcoin rhetoric to push the viability of a Chinese yuan-backed or -based digital asset.
For those who missed the memo, the People’s Bank of China will soon be launching a cryptocurrency that will act as a medium of exchange for consumers and as a settlement network for corporations and banks. There is no concrete timeline for the project, though officials have said that the cryptocurrency is nearing a prototype phase that can be rolled out to beta/pilot testers.
It still isn’t clear how this new cryptocurrency and respective blockchain will interact with Bitcoin, but as we wrote on Monday, China is likely doing everything in its power to separate the antithetical state-run and decentralized blockchains.