Blockchain

Dragon’s Den: China, South Korea Don’t Want To Ban Bitcoin – They Want To Dominate It

China and South Korea aren't trying to ban Bitcoin, they are trying to beat it at it's own game.

Twenty-seventeen was all about which Asian economy would next ban crypto, but with news that China is creating its own Blockchain currency, this year is likely to be something of the opposite. The question for 2018 is; what Asian country is going to try and out-dominate every other to be the world’s leading Crypto provider?

China’s announcement in September that is was going to clamp down hard on anyone raising money in Bitcoin for an ICO seems to have all been but shaken off by the country’s proximity to Hong Kong, a nearby global marketplace for crypto which boasted some of the largest digital currency offerings of 2017, including Top 10 digital asset Monero.

For a couple months in the final quarter of the year there was talk on the street of autonomous decentralised organisations battling – and winning – against the mighty People’s Republic government in Beijing. As if. Later, it turned out that these mumerings in cyberspace amounted to nothing other than Chinese Whispers – “internal memos”, it was revealed, as opposed to official legislative policy were the source of confusion. Caixun, a leading Chinese business newspaper carried the news, quoting a South China electricity provider on the record.

It’s Not Who’s Banning It, It’s Who’s Buying It

It’s about as likely that anyone on the mainland was confused about Chinese national policy on crypto as it was that South Korea was about to pose a ban on digital assets any time soon, of course. Just last week however, Asia’s most technologically-engaged nation, with over 70% of the country connected to the internet, issued “guidelines” to banks and exchanges prompting sudden panic that all Crypto would be banished overnight. In fact, what the authorities said was that local financial institutions should stop serving underage South Korean would-be crypto traders and that there would be consequences if they continued to do so. Something of a far cry from an outright ban.

The fact is, neither country wants to ban crypto nearly as much as it wants to become the dominant provider of it. China, for one, has had a digital currency group researching plausible market entrant scenarios since as far back as when Bitcoin was trading for just $300 in 2014. Now it says that it is ready to develop its own version of Bitcoin’s protocol, presumably with some more Ethereum-like bells-and-whistles attached. China has its own Blockchain NEO, too, of course – and somehow it looks a little unlikely that is shutting shop any time soon:

NEO (NEO) Source; CoinMarketCap.com

South Korea already has its own native blockchain in the form of ICON (ICX), which is currently celebrating its launch party in Seoul’s tallest building. ICX has been trading on Binance, a Shanghai-based crypto exchange, itself currently experiencing outstanding volumes, since late October last year. ICX is one of the best-performing ICOs – and Cryptos – in 2017 already, up around 1400% since opening on Binance and ahead by as much as 3,500% for those who participated in the pre-ICO round. That’s 14x – 35x of gains inside less than 3 months that crypto buyers are sitting comfortably on without selling now with respect to ICX, and there is no sign at all in sight that it’s about to slow down:

ICON (ICX) Source: CoinMarketCap.com

Asian Crypto Supremacy Comes Down To Ethereum’s Smart Contract

Contrary to mainstream press reports, there is simply no evidence at all that Asian countries want to ban crypto. If there is evidence of anything at all, it’s that they want to use the threat of banning digital currencies, combined with the news cycle, to manipulate prices in certain cryptos either so they can buy them up cheaply, sell them more dearly, or install their own native versions into the mix.

The question is, how does anyone take advantage of this scenario? Probably the best possible way is to buy and hold Ethereum, an open-source, global protocol on which smart contracts are nearly universally made. While rival technologies such as Counterparty and Omni exist, Ethereum is the true incumbent when it comes to providing smart contract functionality.

Why would Ethereum stand to gain more than any other Crypto from an Asian boom in digital assets? Simply because of the fact that while Blockchains such as ICON, NEO, EOS and others are all in development, the Koreans and the Chinese are not going to sit around waiting for their native versions of the Ethereum Blockchain to emerge before partaking in the largest crypto boom in history. They are going to continued to develop increasing numbers ICOs, raise piles of cash, much of which will ultimately be directed at funding their own domestic open source applications. Most of that crypto will be in the form of Ethereum smart contracts, at least for the time being.

Development timelines on Ethereum-style blockchain projects are not short. It took the Ethereum Foundation almost 3 years to come up with the finished product, so you can be pretty certain that no rival smart contract functionality is going to be provided to the Asian crypto bulls any time soon.

Far from pushing down the prospects of crypto, Asian countries are likely to mass-adopt it at an unprecedented rate this year. That’s why there are all these warnings and grumbles from high up: to ensure that the mass-adoption goes as smoothly as possible. The fact is, that adoption is likely to be the leading catalyst for Ethereum, and could possibly push it into first place ahead of bitcoin at some point this year.

In other words, Asia is the wind behind ETH’s sails.

About the author

Sophia Chilton

Sophia Chilton

Sophia is a former Morningstar analyst who became fanatical about Blockchain after she first purchased Ethereum in October 2015 and held it right up until April 2017. She is presently in the process of co-founding her own start-up called The Digital Toyshop which she has initially been able to finance with her Ethereum profits. She lives between New York and Hong Kong, where she grew up between.

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