Or at least 100 million of them did. Back in the mid-2000s, internet company Tencent launched Q Coins, virtual currency with which users could buy items for their avatars. Tencent accepted points won by online gamers in exchange for Q Coins, making it a virtual central banker of sorts since it was issuing Q Coins without hard-currency backing. And users started exchanging Q Coins among themselves, and since they were untraceable by the Chinese government, Q Coins began being used for black market transactions. Eventually Q Coin trading volume hit several billions of yuan per year, rising at 15-20% annually. China’s central bank worried that Q Coins could be used to launder money and to inflate asset bubbles. The government eventually cracked down, banning, among other things, the exchange of “virtual currency” between user accounts.
China’s capital controls make it extremely hard for to buy stuff beyond China’s borders—most online stores don’t accept yuan or Chinese payment systems, and there are limits to what they can exchange into foreign currency. As bitcoin markets develop overseas, Chinese bitcoin owners could in theory change it into currencies that sites like PayPal, Amazon, etc., accept. Right now bitcoin (比特币, or bitebi) commands somewhere between 600 and 700 yuan at the time of this writing. Those who wish to trade it can get started on Taobao or Paipai.
Because it’s hard to get currency out of China, that makes the stuff within China that you might conceivably want to invest in bubble up really quickly. Property, stocks, art, tea—speculation dominates in every major asset market you can think of in China. The Chinese are a people used to high risk-reward investments. This is already underway: a source from a Chinese tech company who is also an avid online gamer tells Quartz that he hasn’t yet seen signs of bitcoin being accepted as a payment method in China. “Speculation, so far, is the only use,” he says.
Unlike other advanced developing countries, which tend to have leapfrogged PCs in favor of mobile phones, Chinese people tend to have a high degree of PC ownership—and it’s still growing fast. With a lot of patience, those can be used to mine bitcoins. Of course, the wealthier bitcoin investors can just buy this Bitcoin mining machine on Taobao.
“Well, there’s already a whole industry built up around ‘gold-mining‘ or ‘gold-farming,’” explains Mark Natkin, managing director and founder of Beijing-based tech research firm Marbridge Consulting, on whether there’s a potential base of bitcoin-miners in China. ”And then there are all these claustrophobic, windowless rooms packed with college students living off instant noodles and playing games all day, for days at a time,” he says. It’s unfortunate, but this habit is so prevalent that Chinese people occasionally die from marathon online game sessions. And online game addiction has become such a common problem that there are entire camps dedicated to it (as well as this dad, who sent in-game assassins after his kid’s avatar).
As the online gamer source tells Quartz, “the currency’s system is so decentralized” that it would be extremely difficult for the Chinese government to do anything about bitcoin. That wasn’t the case with Q Coin, he says. ”The [Ministry of Commerce] can regulate Q Coin because of two things. One, Tencent submits regular reports about Q Coin’s circulation and transaction volumes. Two, MoC can withdraw Tencent’s license if things get out of control,” he says, adding that the Chinese government has no mechanism for tracking bitcoin transaction or circulation. And unlike with Tencent, there’s no company or entity to target for regulation. ”To China’s conservative regulators,” he adds, “Bitcoin is a game [that's] way more dangerous.”