Why China’s ICO Ban Could Work For You
News
|
Posted 16/10/2017
|
5449
Casey Research put out a very logical position on why we should be seeing the Chinese ban on ICO’s (Initial Coin Offerings) last month as an opportunity not a threat to crypto currencies. They demonstrate that China has a track record of banning technology companies to allow their domestic equivalents to flourish.
They banned Google as their domestic equivalent Baidu struggled, they banned Facebook so their own Tencent flourished, and Amazon and eBay allowing Alibaba to dominate… it’s a repeated pattern. Indeed the usual FANGS are nowhere to be seen whereas the five largest tech companies in China are Alibaba, Tencent, Baidu, JD.com, and NetEase.
But whilst they have banned ICO’s, Casey’s crypto expert Teeka Tiwari had this to say:
“China won’t let something as big as the blockchain go to a foreign competitor. Right now, platforms outside of China are dominating ICOs. If they don’t get back in the market soon, China will lose out on this lucrative market.”
He claims to have insider officials confirming the ban is only temporary whilst they figure out how to regulate the industry. Just as Baidu etc took off once they removed the competition, Chinese based crypto’s too will take off once they are allowed back in the market. Whilst you might dismiss this as having nothing to do with you as a ‘mainstream’ bitcoin or ether holder (as the alt currency world is one you don’t play in) you need to remember that bitcoin and ether form the basis buy in for many of these trades and ethereum tokens often the vehicle for them.
On that last point, analyst Lynn Sebastian Purcell explains nicely:
“…..Bitcoin is a digital currency that works by a blockchain technology. That technology just keeps track of who owns what, i.e., of the global leger of Bitcoin transactions. So the technology powers the coin.
The Ethereum network inverts that idea: the coin powers the technology. The blockchain technology is the Ethereum network, which runs a system of global "smart" contracts (i.e., they are like legal contracts, but are enforced automatically by a computer program). Ether is the coin that powers the Ethereum network; it's the "gas," so to speak. Each time the program runs, it requires "gas" to complete a transaction. The more people on the network, the more gas they need to buy, and so the more valuable Ether should be…..It is this unprecedented generality that forms the heart of the Ethereum network. Effectively, it's a single blockchain computing system, which is why the creator, Vitalik Butterin, calls it the Ethereum Virtual Machine. Other programs run on it, the way that programs run on the Windows operating system, or apps run on cell-phones. The difference is that apps are run on just one machine (your phone), while Ethereum "apps" are run on a distributed machine (the blockchain). Hence, why they're called DApps (distributed apps).”
Recently we wrote about China’s potential plans around the gold market too. Communism is a dirty word in democratic, capitalist countries but the control it allows could well be a massive theme of any global currencies repositioning soon, be that digital currency or the world’s oldest, gold….