Surprise at China outlawing cryptocurrency exchanges is not news, its naiveté
How foolish are we being when something as expected as reports of the Chinese government outlawing cryptocurrency exchanges and tokens can move prices as dramatically as it has in the past week and a bit?
Why are we surprised that the Chinese government is taking a strong negative position on the ultimate tool of economic empowerment? I think we’ve become so accustomed to the idea that China is an emerging economic power, “a part of our global community” if you will, that we’ve forgotten a few fundamentals:
- China is not a democracy; representatives are not elected by the public.
- China doesn’t allow the free movement of information; Google, Facebook, Youtube, Twitter, Instagram, Pinterest, Dropbox, Slack, The New York Times, Bloomberg, The Independent, BBC, The Wall Street Journal, Reuters and TIME, amongst many others, are all banned & inaccessible from inside China because of the existence of a massive firewall that prevents anyone inside China from accessing information deemed undesirable by the government.
- China’s economy is directed by the government; market forces don’t determine how resources are allocated, so the idea that a parallel economy, created on the back of cryptocurrencies and tokens and existing outside of Chinese government control, would be allowed to exist, is preposterous.
There’s enough evidence to suggest that the Chinese government is creating it’s own cryptocurrency — the “digital RMB”. Who needs competition, right? This is not even the first time that an international online service has been shut out of China & replaced with a local alternative — it’s the modus operandi . The local option typically proceeds to gain a massive user base and enjoys monopoly status in China, provided that it toes the party line. Ever heard of Baidu? That’s Google. How about RenRen? Facebook. Sina Weibo? That would be Twitter. Frankly, I’m surprised that cryptocurrency has been legal in China for this long and that cryptocurrency exchanges were allowed to exist in the first place.
Stop giving away your bitcoins for cheap. There’s nothing to see here — move along & HODL.