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China Blockchain Research

03 Jul 2017

A brief on ICOs

Written by

Over the past few weeks, little-known ICOs have grabbed the media's attention. ICOs, or 'Initial Coin Offerings', have become a new way for individuals and start-ups to obtain funding. A significant number of these ICOs are originating from China, so we decided to take a look at the dynamics behind these new funding vehicles. 

Blockchain technology has become one of the hottest topics in China Fintech. So when Ant Finance, the most valuable tech unicorn company in the world, announced they were working on a blockchain-based solution for the charity space, it captured lots of attention - but what is behind the move?

Last week China’s central bank announced the possibility of launching its own digital currency on its official website. What is behind the government's push to launch a digital currency? Control money outflow? Better monitor cash transactions? 

So over the past week, the internet has been aflutter with talk of Bitcoin and China again. A March 10th Goldman equity research note entitled 'The Future of Finance' offered a few comments about Bitcoin in China seem to have reignited the debate about Bitcoin's place in the Middle Kingdom. There are a lot of misconceptions out there, we felt we needed to set a few of them straight.

According to the latest hardware specifications of bitcoin mining manufacturers, even with it no longer makes sense for individuals to mine on their own - even in China where electricity is somewhat cheaper. Except if they are willing to wait a long time. 

Ripple Labs announced partnerships with two U.S. banks, which will allow their customers to make same-day distributed money transfers at a very low-cost. How about partnering with Chinese banks? Could Ripple in China work with banks in a space where Bitcoin in China has struggled?

Bitcoin has seen its reputation in the eyes of the general public drop following various security breaches (i.e. Mt Gox) that have left many uncertain about the digital currency’s legitimacy and future. In addition, people are starting to question if Bitcoin really has a place in the market and if there is actually a problem that it solves – there is almost a malaise in the eyes of many who are getting tired about reading about it. Although Bitcoin might be hitting headwinds, security enhancements are underway and blockchain technology seems to be thriving.

Seven months after the PBOC's crackdown on bitcoin exchanges in China and we're seeing a resurgence in talk about what Chinese bitcoin exchanges are doing and where they are going. While accusations of falsifying trading data and questions about bitcoin's future in China still abound, China's bitcoin exchanges want to move on and forget the past, but are they going in the right direction?

We are pleased to announce the release of Zennon Kapron's book on the Past, Present and Future of Bitcoin in China. "Chomping at the Bitcoin" will be released on the 25th of August.

Fiona Zhao, one of our analysts here at Kapronasia, has been covering bitcoin in China from the beginning. Here she lays out the reasons why bitcoin in China won't survive. 

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