China and its cryptocurrency: this will be a global game changer
China continues with its plan for the launch of its official cryptocurrency, paying particular attention to one of the least-talked about, but enormously important aspects of previous experiences with virtual money: how to distribute the stuff.
This has been the fundamental problem: aside from a comparative minority of well-informed and wealthy individuals, most of us have little understanding of how cryptocurrencies work, which is why only a relative few have been able to accumulate them in sufficient quantities to make real money when they become popular. To put this in perspective: around 1,000 people, the so-called bitcoin whales, own around 40% of the total bitcoins in circulation in the world, making it easy for them to manipulate their price. Today, for example, one bitcoin whale moved 94,504 BTC, worth more than $1 billion outside any control or supervision and paying just $700 in fees.
The absence of any distribution mechanism for most cryptocurrencies beyond “I believe it, we’ll see what happens later,” has allowed schemes to emerge that jeopardize the future viability of its use, generating a highly problematic and volatile ecosystem.
China is obviously a very different case. It has started by breaking one of the rules of most cryptocurrencies by proposing strong…
