Notable: The Chinese government is shifting up a gear in anti-crypto propaganda. That she needs it shows more than anything how powerful Bitcoin and other cryptocurrencies are.
China’s “Blockchain-based Service Network” (BSN) is a government initiative to promote the commercial adoption of blockchain technology. But that has nothing to do with cryptocurrencies.
Cryptocurrencies are, two senior BSN officials claimed a few days ago in the government-sponsored People’s Daily, “the largest Ponzi scheme in human history.” This is because the early adopters benefit the most, and to remain stable, cryptocurrencies needed a constant flow of new investors. The inner circle, therefore, tries to push the deceit further by dressing it in ever new cloaks.
But there is hope that the system will collapse. The status is extremely fragile. “If there is malicious short selling, no new investors, tight budgets, or a change in regulatory policy” this will lead to collapse “and the value will go to zero.”
This statement is strikingly reminiscent of the western “computer scientists against bitcoin” and what the “ skeptics ” are saying. It also doesn’t seem to come by chance, but to be part of a propaganda offensive. Because just a few days earlier, the Economic Daily, a newspaper directly subordinate to the Communist Party (KP), read something very similar :
“Bitcoin is nothing more than a chain of digital codes, and the returns on it come mostly from buying low and selling high.” In the future, as investor confidence wanes or as sovereign countries declare bitcoin illegal, it will return it to its original value. It’s nothing at all.”
At the same time , China’s social media are intensifying censorship of everything related to cryptocurrencies and NFTs. According to one report, none of WeChat’s one billion users are allowed to write anything about crypto and digital assets (like NFTs) anymore.
Every public account that works with crypto will be “shadowbanned”, which means that it will be muted for other users without information from the person concerned.
All of this is a remarkable series of messages that surprises at first sight, but makes sense at second and third glance.
The news is surprising because China has actually banned bitcoin, crypto and NFTs (on public blockchains). Since autumn 2021 in full and with the utmost consistency . Why warn so vigorously about something that is already banned? Why go so far as to suppress even talk about it? Could it be that the rule of the CP is not as perfect as it makes it out to be to its own citizens and the rest of the world? Is it possible that the CP cannot “protect” its citizens by coercion alone, but has to convince them?
Apparently. At the end of May it became known that underground mining continued to flourish in China despite the absolute ban. In fact , miners fled China in droves after the CP banned mining. But a study from the University of Cambridge shows that mining is making a comeback in China. Although the USA continues to provide the most hash rates, China has worked its way back up to second place with 22.9 percent.
As long as the hard, economic facts are right – the availability of chips and cheap electricity – even a KP doesn’t seem to be able to stop mining.
NFTs also seem to be trading briskly in China, despite the ban. Dubbed “digital collectibles,” they seem to be sneaking onto numerous platforms, including an app from Alibaba. Even public blockchains like Ethereum and NFTs are used in China , for example to store and link information that the government censors, like a video about the insane lockdown in Shanghai.
Bitcoin and cryptocurrencies are almost impossible to ban. Nothing underscores this quite like the latest news from China. The government has tried so many things. It has united a phalanx of companies in the fight against crypto, and the police are investigating intensely and vigorously. But apparently – this is simply not enough.
In addition, the competition between the state and the private sector is likely to play a role in the new propaganda offensive. No nation is pushing a dystopian digital currency as much as China with the digital yuan. But this currency needs specialists, computer scientists, designers, influencers. Likewise the BSN and its projects.
In a free society, the free market attracts the best professionals. Especially in the blockchain area, developers who are proficient in the smart contract language Solidity are desperately sought after and attracted with more than fantastic salaries and conditions. Because government agencies cannot compete, they depend on prohibition and propaganda to get the talent they need to make their blockchain projects a reality.
The meme that China was banning Bitcoin again got a stale aftertaste after the comprehensive bans on trading and mining. But as it turns out, it lives on: China will have to ban Bitcoin again and again.