China is suddenly full of nice things to say about blockchain technology

Yes to blockchain, no to cryptocurrencies.
Yes to blockchain, no to cryptocurrencies.
Image: Reuters/Dado Ruvic
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Last weekend TV viewers in China learned that “the value of blockchain is 10 times that of the internet.” The source? China Central Television (CCTV), the government-controlled main broadcaster. It was perhaps the biggest official endorsement of the technology in the country so far.

CCTV’s hour-long show about blockchain (video in Chinese) included government officials and international crypto experts like Don Tapscott, the Canadian author of Blockchain Revolution. It was the first time that China’s top media outlet educated a domestic audience so thoroughly on the concept and value of blockchain.

Although the show warned against blockchain-related fraud, its overall portrayal of the technology was positive—noteworthy considering China banned initial coin offerings and shut down crypto exchanges last fall, and subsequently cracked down on crypto mining.

During the crackdowns, CCTV routinely blasted crypto projects. Now, China’s crypto community is thrilled about the change in tone, with many taking to social media to share a screenshot of the three sentences CCTV used to define blockchain at one point in the show:

Blockchain is the second era of the Internet.
The value of blockchain is 10 times that of the Internet.
Blockchain is the machine that produces trust.

Each of those lines can be traced back to blockchain bigwigs and Western media reports. For example, it was Zhang Shoucheng, a Stanford physics professor and the founder of blockchain-oriented VC firm Danhua Capital, who first floated the idea that blockchain is 10 times more valuable than the internet. Appearing as a guest on the show, Zhang predicted that blockchain will give rise to companies with market values at least 10 times bigger than centralized companies like Google and Facebook.

In a speech last week, Chinese president Xi Jinping called upon his country to take the lead in developing new technologies like artificial intelligence, the internet of things, and blockchain. The latter has become a surprisingly hot topic at political gatherings in China.

But China’s embrace of blockchain is compromised. For one thing, Beijing has made it clear that it wants blockchain, but not cryptocurrencies. In other words, it’s not interested in public blockchains, with tokens as a requirement because that’s the incentive for anyone to participate in the network. In addition, by banning cryptocurrencies, China is also rejecting some fundamental ideas often associated with blockchain technology, such as free asset movements and non-government-controlled money. In fact, the Chinese central bank is developing its own centralized digital currency.

Xu Hao, a senior official with the Guizhou government, drove home that point in the show:

“When talking about blockchain, many people are talking about ‘decentralization.’ I’d like to make a small change to the word. I think the essence of blockchain is ‘de-intermediarization.’ There is no way to get rid of the center.”

Blockchain, in other words, with Chinese characteristics.