China Bans Cryptocurrency – Invests 3 Billion in Blockchain TechnologySeptember 5, 2018
Government of China bans everything and all related to cryptocurrency.
Over the past two weeks, news sites, social media accounts, exchanges and events, and anything related to cryptocurrency are now banned in China.
Xi Jinping, the president of China, did consistently describe blockchain as a “breakthrough technology.”
With virtually every kind of information exchange and communication about cryptocurrency being banned; there is still hope, because China did not completely walk away from the efforts related to public blockchain networks and projects.
China states, it will continue to improve and speed up on its block chain development projects. China is doubling down on its investment in block chain technology from the second quarter of 2018.
Of note, Xi Jinping’s dream city, which is the Xiongan New Area, that has required the New York based ConsenSys to develop dApps that is meant to be used within the region.
In a press meet with CNBC, BlockVC, an investment firm based in Beijing stated that they are investing in more than 40 to 50 blockchain investment projects by the end of year 2018. This is with respect to developing the underlying technology at a protocol level like in the mainnet and testnet.
This investment is considered to be necessary by China, because this is the protocol that proves or disproves the ability of the project. Newer iterations in technology are meant to make cryptocurrency projects functional over a long time.
Every cryptocurrency is supposed to have its own public block chain network. There are individuals who back the operation of the network. The individuals who back the operations of the blockchain network need to get their incentive for their work.
The work involved in sustaining the blockchain technology can be anything ranging from mining the blocks, developing the blockchain based technological solutions, processing the blockchain transactions on the cryptocurrency mainnet etcetera.
The success of a cryptocurrency project is completely dependent on the working prototype of the blockchain project backed by these individuals.
The valuation of the cryptocurrency in the real-world implementation process is mainly based on the mainnet related to the particular native cryptocurrency.
The functionality of the mainnet is determined by the testnets. Testnets are the technological components that help determine the transaction functionality. The potential capabilities of the project are determined by the quality of the testnets.
Testnets are the code frameworks, and the mainnet is the end product. Mainnets are updated and revised depending upon the need.
The mainnet will have a positive or negative impact on the value of the cryptocurrency. There are several Initial Coin Offerings that happen without a testnet. There are investors who buy the cryptocurrencies before the launch of the mainnet. This is because a successful launch will lead to a substantial increase in the value of the cryptocurrency.
Sustaining the backup technology that is empowering the digital currency is very important in a cryptocurrency network.
China has decided to stabilize its network by investing in research and innovation projects to a value of 3 billion in the blockchain technology industry, despite the ban.
The current ban on everything and all about cryptocurrency is not a walk away from the digital currency. It is an attempt by the government to stabilize the backup technology. Perhaps, a central authority to regulate the protocol and incentives will soon be in place.