China plays a leading role in the future of Bitcoin

Recently, Nathaniel Popper, author of “Digital Gold,” wrote an interesting report in the New York Times about China’s connection to the Bitcoin network. Popper stated that cryptocurrency has become a multi-billion dollar industry and that China has a huge influence in this field.
Chinese Investors, Mining Pools, and Trading Volume Show China Believes in Bitcoin Popper gives his readers a glimpse into the growth of China’s Bitcoin industry and how everyone seems to want to get involved in building Bitcoin infrastructure.
From the government to investors and miners, cryptocurrencies are quite popular in China. When talking about various companies and mining pools located in China, Popper said: "When it comes to borderless currency, some companies in China have gained major de facto control over the Bitcoin network."
The author of “Digital Gold” is not the only one to observe this relationship between Bitcoin and Chinese companies, for example in 2015 Goldman Sachs (a global investment bank) reported that 80% of Bitcoin transactions involve RMB. The multinational financial company reported that the volume of transactions between the US dollar and Bitcoin ranked behind the RMB and the Euro, with the Japanese Yen trading close behind them.
The Goldman Sachs team explained: “So far, most of the active Bitcoin merchants are concentrated in the United States and Europe. Although China has higher transaction data, the restrictions issued by the People’s Bank of China have limited the use of traditional payment methods by Chinese Bitcoin companies, which has caused many large Chinese companies to stop accepting Bitcoin. However, due to the stability of the Bitcoin economy in China, some payment processors have re-emerged, such as BTC China’s JustPay.”
According to reports from Goldman Sachs, Nathaniel Popper’s latest article and the New York Times, China is gradually moving towards legalizing cryptocurrencies as “civil rights objects.” On June 27, the Standing Committee of the National People’s Congress in Beijing issued a draft legal proposal (virtual property such as Q coins and Bitcoin are officially protected by law).
However, the People’s Bank of China has issued a new policy that will impose new fees on payment institutions such as Alipay and WeChat. Whether this will affect Bitcoin payment processing is yet to be determined.
In his article, Popper described that China has a large number of mining pools. Chinese mining equipment covers almost the entire country, and these equipment have made a huge contribution to the security of the Bitcoin network.
“Large mining pool operators have become kings in the bitcoin world: running a mining pool grants them the power to vote on exchanges and bitcoin software, and the larger the pool, the more power its vote has,” Popper said.
First, Popper detailed how Chinese miners were only able to mine small blocks (Bitcoin Core developers have stopped updating the software). However, when it comes to expanding the network, miners like Bitmain CEO Jihan Wu have become more vocal, with some of them starting to deviate from the Core Alliance to conduct block size research.
The development of Bitcoin is gaining popularity in China as the value of the country’s fiat currency has fallen over the past two months.
Many people attributed the decline to China’s strict capital controls, the depreciation of the yuan, the turmoil in the Chinese stock market, and the high hype surrounding the upcoming Bitcoin block reward halving on July 10.
China is indeed closely tied to the Bitcoin network, and it continues to play a major role in the cryptocurrency space. Chinese investors have also invested $60 million in Boston-based Circle Financial, proving that there are a large number of Bitcoin blockchain advocates in China.
Wu Jihan told Nathaniel Popper that China will play a major role in the Bitcoin space, saying: “The Chinese government generally expects its companies to take the lead in emerging industries — Chinese Bitcoin companies fulfill this expectation.”
China’s financial giants control a considerable amount of the Bitcoin network’s infrastructure, which means that cryptocurrencies are safer to circulate here. Chinese Bitcoin miners and investors will have a major discussion on Bitcoin block size and a major vote on the future of the network in the future.