Despite Allowing Mining, Related Factors to Drive China’s Focus on Blockchain
China’s National Development and Reform Commission (NDRC) may now allow mining activities to go on unhindered after the recently-published finalized “Industrial Structural Adjustment Guidance Catalogue” takes effect from Jan 1, 2020, it won’t change the attention shift to blockchain.
China still dominates Bitcoin mining but with the impact of the pending block reward halving scheduled for sometime in May 2020 uncertain, the cost of mining equipment and the growing spread of activities across several countries, it would be seen if sustained interest in mining activities would be rekindled like previous years following the mandate of the top-level economic planner.
According to the COO of the world’s largest mining pool Poolin, Chris Zhu, who believes the NDRC is not just “one of the” highest but the highest and even more authoritative than the state council on some issues, the move is a welcome development for the industry as it is “good for miners in the long-term”. However, that local governments would have a say in this new policy – since he says local governments play a strong role in such and every different local governments have their own opinion on Bitcoin/crypto-related issues – considerations would have to be given to additional requirement(s) as presented by each locality.
Another top Chinese mining pool, F2Pool, is looking to build on its purported out-of-China success in Russia and the CIS region (including Kazakhstan and Uzbekistan) which it claims one of its most important strategic markets in 2019 with a new Bitcoin mining pool server launched there to better serve customers in the region.
“Our mining pool servers are located in Russia, Germany, the USA, Singapore, and China. Local servers near our miners are very important, allowing for improved connection and reduction of rejected shares.”
These and other factors will rather help in driving the global focus on new uses for blockchain beyond cryptocurrencies as China seems to be creating a base that will make it difficult for other markets to follow.
A China-based crypto insider with Gate Technology, Virgilio Lizardo Jr, thinks the Chinese President Xi’s recent speech supporting blockchain technology in China is good for the industry in general though China is still a grey zone for crypto.
“I think its a net positive overall for the crypto industry. However, China has always been a grey zone for crypto, and in many ways it still is. But having the leader of such a major country with a giant economy and an established crypto community reengage in such a public manner is a huge boost for the industry.” Lizardo Jr said, “This does however continue the long crypto narrative of China bans Bitcoin/China unbans Bitcoin and vice versa which is fueled by the aforementioned lack of clarity about what these announcements actually mean. So don’t be surprised if in a couple weeks we see some news that tamps down expectations. One thing is for sure, this will lead to more people in China learning about Bitcoin and that is always net positive for the crypto industry”.
Aside the President’s speech, it has also emerged that Chinese companies submitted roughly 7,600 blockchain-related patent applications between 2009 and 2018 – 3x as many as American companies and accounting for over 60% of the top five-country total (The U.S., China, Japan, South Korea and Germany).