‘Only we Chinese pump with real money’

Um … happy 11th, Bitcoin?

If you thought Libra was going to be the biggest crypto news of the year, Xi Jinping has another thought for you. China embraced blockchain technology with a gusto that would make Satoshi blush. They even banned negative sentiment about blockchain. Whatever happened to the caution they expressed as they cracked down on the ICO craze? We’ll see how things play out after the country launches its digital currency, the DCEP, perhaps quite soon. On Unconfirmed, Alex Gladstein and I discuss why he believes that Xi’s championing of blockchain could someday be seen as a blunder. 

Plus, don’t miss this week’s Unchained, featuring Hunter Horsley and Matt Hougan of Bitwise. We spoke about how they plan to approach their next Bitcoin ETF proposal, plus they give the scoop on those Bitcoin IRAs you may have heard about.

This Week’s Crypto News…

Chinese President Xi Jinping, in his first remarks on blockchain technology, advocated that the country go all in on it, an executive at an organization for Chinese exchanges said the country would launch the first central bank digital currency, and the country passed a pro-cryptography law. The government even banned negative sentiments about blockchain. (I’m sure this isn’t what Bitcoin people were expecting!) These moves caused a spike in WeChat searches for “blockchain,” and, to a lesser extent, “Bitcoin,” plus prompted a Chinese-led rally in Bitcoin and frenzy for Chinese blockchain-related stocks. (Dovey Wan had a colorful tweet translating Chinese traders boasting about how they pumped the price: “Fuck ETF, fuck Bakkt, fuck Libra, none of these BS will pump, only we Chinese pump with real money, the only way to pump.”) 

The Chinese Communist Party wasted no time in trying to use blockchain technology in the most dystopian ways possible, releasing a dapp where party members could state their loyalty on a blockchain. Though I’m sure this is just the beginning, as Alex Gladstein and I discuss on this week’s Unconfirmed. 

It’s not clear what the office will be doing, but we will be watching this space because of the timing of this news after China’s pro-blockchain moves and because of CZ’s positive reaction to the news. He tweeted, “When China moves, it moves fast! Considering it is the largest body of population on the planet. It’s incredible. Don’t get left behind. Embrace it.”

A long history of bad blood led Jihan Wu to forcibly take control of the Bitcoin mining giant and push out co-CEO Micree Zhan. A leaked transcript of a meeting at Bitmain goes into their disputes, which began all the way back in 2015. Dovey Wan had some tweets that give a peek into the drama, where she said, QUOTE” 1. Jihan turned Bitmian HQ upside down while Micree was in Shenzhen 2. Investors didn’t know. NO shareholders consent 3. ONLY after the coup, Jihan started to talk with investors on how to negotiate with Micree.” Earlier in the week, competitor Canaan filed for a $400 million IPO on Nasdaq, while CoinDesk later reported that Bitmain had also reported for an IPO with the SEC.

There’s been a lot of chatter recently about under what circumstances Ethereum should fork, and a new piece by Leland Lee and Haseeb Qureshi argues that DeFi makes it unforkable, by using the example of USDC, which is the second-most used stablecoin in DeFi, of how entangled the system is. 

Meltem wrote a piece on what she sees as the current phase of Bitcoin history, in which, as more of our lives have gone digital, the corporations who manage our digital lives, such as Facebook, Apple, Amazon, etc., will want to also own our financial activity. As she puts it, QUOTE, “If you already own everyone’s data and digital lives, why would you let a bank capture all of the value of their economic activity?” 

Remember that idea from 2015 that blockchain technology would make the back end offices of all kinds of financial infrastructure more efficient? Well, three exchanges including Credit Suisse, obtained a no-action letter from the SEC to use such technology created by Paxos. As Fortune puts it, QUOTE, “this will mean that brokerages can begin recording a relatively small number of their stock trades with each other on the blockchain rather than on the legacy computers of the Depository Trust & Clearing Corporation, the industry-owned collective responsible for settling and clearing all trades.”

Coinbase pulled together a bunch of fun facts about the original cryptocurrency. I was interested to see that, according to Google Trends, “In 2009, Austria had the highest relative interest, followed by Kazakhstan (2010), Estonia (2011), Finland (2012), Ghana (2015), Nigeria (2016), and South Africa (2017).” We’ll see if China takes that mantle for 2019.