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China’s BSN Blockchain Ready For Global Expansion Despite ‘Challenges’

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China’s blockchain-based service network a.k.a BSN is eyeing its first major international expansion, according to a CNBC report. CEO Yifan revealed the firm’s plan to launch a project called BSN Spartan Network overseas sometime in August.

The Hong Kong-based firm boasts itself as a “one-stop-shop” for blockchain cloud applications. It aims to bridge different blockchains together to help businesses deploy the technology.

Even though Chinese President Xi Jinping has doubled down on Blockchain technology, elevating it to a national priority, it is strictly against any cryptocurrencies other than Digital Yuan.

Due to this, the Spartan Network will rely on half a dozen public blockchains that do not operate with cryptocurrencies. One of those will be a non-crypto version of the Ethereum blockchain when the project launches in August.

Yifan also confirmed that the Blockchain transactions fee will be paid in U.S. dollars rather than Ethereum’s related cryptocurrency called ether.

“The purpose of this is to drop the cost to use public chains to very minimal so that more traditional IT [information technology] systems and business systems can use public chains as part of their systems. That is why we are working with other major public chain protocols to convince them the mainstream is non-crypto public chains.”

More hurdles for BSN ahead

Being a blockchain firm and not dealing with cryptocurrencies will have its challenges. The CEO admitted that the initial years will be “difficult to push as most people in the blockchain industry only understand crypto.

Not only that, as it is backed by the Chinese government, foreign firms would likely be a bit hesitant to do business with the firm.

But Yifan begged to differ saying, “People will say BSN is from China, it is dangerous. Let me emphasize, BSN Spartan will be open source … we will not access anything from our end.”

“That is why when we a launch in August we will open-source immediately and we are working with a lot of western companies,” he added.

On the other hand, here is some good news for Bitcoiners.

China’s iron hold over Bitcoin miners from running operations in the country seems to be wavering. Data from the Cambridge Bitcoin Electricity Consumption Index [CBECI] showed that activity has picked up again and the nation is now the second-largest Bitcoin miner, after the US.

China Regains the Title of the 2nd Top Bitcoin Mining Hub

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According to recent research, China failed to implement its cryptocurrency prohibition last year, and the country has since resurfaced as one of the world’s main Bitcoin (BTC) mining hubs.

China became the second-largest Bitcoin hash rate supplier in January 2022, according to the Cambridge Bitcoin Electricity Consumption Index (CBECI), months after local officials banned all crypto operations in the country.

According to data, Chinese bitcoin miners generated 21.1 percent of the entire global BTC mining hash rate distribution in early 2022, behind only the United States, which generated 37.8% of the total hash rate in January.

China once hailed the bitcoin mining industry

In 2019, China was the world’s largest Bitcoin mining country, accounting for more than 75% of worldwide BTC hash rate power. In July and August 2021, the hash rate decreased to 0% after a string of crypto mining farm closures around the country.

Despite the crypto ban in September 2021, the hash rate share climbed to 22.3 percent in that month and never went below 18 percent during the research period.

The new data, according to CBECI project leader Alexander Neumueller, is sufficient to prove that Bitcoin mining is still active in China.

Kazakhstan, the world’s third-largest BTC mining center, sees a modest reduction in hash rate share, according to the latest CBECI data. Kazakhstan’s contribution to the BTC hash rate fell from 18 percent in August to 13.2% in January.

Miners are currently mining up to 9% of the global BTC hash rate in unspecified places, according to CBECI statistics. With 6.5 percent and 4.7 percent, respectively, Canada and Russia are the next two largest mining centers.

Russia has dropped out of the top three nations in terms of BTC hash rate power, as well.

The most recent CBECI update provides more granular statistics on hashrate distribution in the state’s main Bitcoin mining market.

According to the figures, Georgia, Texas, and Kentucky have the greatest hash rate, accounting for 32 percent, 11.2 percent, and 10.9 percent, respectively. These three states collectively account for more than half of the overall hash rate in the US.

States like New York, California, North Carolina, and Washington, according to data, have major mining activity.

Bitcoin Is Now Identified as a Legal Virtual Asset Property by the Shanghai High Court

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A recent judgment from China’s Shanghai High People’s Court has given the country’s experiment with cryptocurrency a fresh twist. While China’s expulsion of crypto miners and other judgments had effectively restricted crypto trading and associated operations within its borders, the Shanghai ruling may provide some relief to the community.

The judgment in question found Bitcoin to be a virtual asset with economic value that is protected by Chinese law. “The People’s Court has established a unanimous view on the legal position of bitcoin in actual trial practice and designated it as a virtual property,” it wrote on its official WeChat channel.

In China, the highest municipal court is the high people’s court, which is preceded by the people’s courts and intermediate people’s courts.

They are directly controlled by the central government and have a structure that is identical to that of the Supreme People’s Court, which sits above them. In China, the Supreme People’s Court is the highest court.

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Bitcoin Is Now Identified as a Legal Virtual Asset Property by the Shanghai High Court 2

China and Bitcoin

The High People’s Court was considering a lawsuit brought by Cheng Mou, another Shi Moumou, who was seeking the restoration of his (one) bitcoin. On October 10, 2020, Cheng Mou filed the complaint at Shanghai’s Baoshan District People’s Court, and Moumou was ordered to refund the bitcoin.

The defendant, however, declined to do so, and the case was sent to the Shanghai High People’s Court. While the case is still pending in China’s lower courts, the decision might be significant since it establishes a precedent for how virtual assets are viewed under Chinese law.

To date, the government has discouraged cryptocurrency trading and shunned miners in an effort to minimize energy use and discourage the entire business.

“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said in September last year. It also warned Chinese citizens that crypto trading could “seriously endanger the safety of people’s assets.”

According to Liu Yang, a lawyer from Beijing’s Deheng Law Firm, the high court’s declaration would serve as a reference judgment for civil issues concerning bitcoin in the Shanghai area.

China Chokes Crypto Market Tighter – Warning Illicit Activities

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China is limiting its digital asset market even further as officials fear that criminals are using the sector.

Three industry organizations in China have jointly released rules days after a Chinese media source called for swift monitoring of digital collectibles.

On Wednesday, China’s government-run organizations, the National Internet Finance Association of the country, the Banking Association, and the Securities Association issued warnings to financial institutions against enabling ‘illegal’ NFT trading.

Last year, these government-backed organizations took a tough stance against the Chinese cryptocurrency sector. China then outlawed initial coin offerings, bitcoin mining, and cryptocurrency transactions.

China’s NFT market is getting pretty popular

NFTs are ownership certificates for a one-of-a-kind digital property, such as a video, song, or artwork. Digital artifacts are gaining hold in China, and tech giants such as Ant Group and Tencent Holdings have welcomed them.

Although NFTs might help China’s digital economy, the trio warned that they could also lead to speculative trading, money laundering, and illicit financing. Last year, the trio also declared a combined ban on cryptocurrency trading.

The statement, which was published on the country’s Banking Association’s website, stated that NFTs must not be utilized to issue financial assets such as securities, insurance, loans, or precious metals.

Members of the trade groups were also prohibited from providing trading venues or financing for NFTs.

The statement states that cryptocurrencies cannot be used to price or settle NFTs, and real name identification is necessary for anti-money laundering purposes for NFT issuers, purchasers, and sellers.

Online marketplaces have been launched by Chinese technological titans such as Jack Ma’s Ant and video game maker Tencent (0700.HK), and a rising number of enterprises are researching NFTs.

Xtep International produced its first digital running shoe collection this month, while the official Xinhua news agency presented a digital media photo collection via NFTs last year.

China has yet to establish a regulatory framework to control the trade of NFTs in the nation.

Despite some of these legal difficulties, Broadcaster Shandong Television, a Chinese television network, is apparently building an NFT marketplace. Xinhua News Agency has previously made a similar declaration, highlighting government-owned media businesses’ involvement in the NFT market.

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China to maintain its status quo on the crypto ban

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The People’s Bank of China [PBoC] has reaffirmed that it would continue its policy of banning crypto speculation in a statement released from its meeting that was convened on 4th March 2022. The annual meeting led by PBoC has outlined regulatory priorities for the country’s financial market in the coming year.

The conference was attended by the heads of local banks, the National Internet Finance Association of China, foreign currency settlement, and clearing services providers, the top bank said in the statement.

China had executed one of the most comprehensive crackdowns on crypto trading and mining last year, forcing major crypto exchanges and mining companies to shut down their operations. Primarily led by the country’s top regulators who have instructed commercial banks to stop offering services to trading platforms such as over-the-counter trading desks and exchanges.

Those who refused to obey had their bank accounts blacklisted or canceled making crypto platforms unable to cash out on tokens or offer a fiat on-ramp to their users. In order to keep an eye on defaulters, the financial agencies also teamed up with the police to monitor and track cross-border transactions from trading platforms. 

China’s share in Bitcoin transactions down by 80%

According to a report released by the Financial Stability Bureau of the Chinese central bank on 2nd March 2022 that discussed the impact of the crypto crackdown on the financial markets. The translated note claimed that all peer-to-peer exchanges in the country had been eradicated from 90% to 10%.

China has continued to maintain an outright aggressive stance against crypto use since the beginning. The first ban came in 2013 when it prohibited banks from handling Bitcoin transactions. It has carried out multiple crypto crackdowns and enforced numerous bans on crypto markets since 2013, but Chinese investors have always found a way to evade these bans.

Another ban on local cryptocurrency exchanges in 2017, forced them to shut their operations completely. The country later intensified its crypto crackdown efforts in 2021, when it carried out elaborate regulatory operations to eradicate Bitcoin mining from the country and by September 2021, it had deemed all digital asset transactions illegal.

Supreme court of China rules out crypto transactions as illegal

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On Thursday, China’s supreme court declared cryptocurrency transactions to be unlawful, threatening violators with steep penalties and up to ten years in jail.

While top-level Chinese government authorities had previously declared crypto illegal in 2021, the measure now makes it technically illegal, allowing the government to pursue dealers in court.

In September of last year, following a severe energy deficit, the nation imposed restrictions on crypto mining and commerce. Several businesses were forced to relocate to Singapore or shut down entirely due to the migration.

China had previously been the world’s largest crypto miner. Following a similar restriction in Kazakhstan, markets now perceive Russia as a major, up-and-coming player in crypto mining.

What does China’s new rules mean for crypto investors?

For major transactions, the court’s new order now specifies jail terms of three to ten years and penalties of 50,000 yuan ($7918.28) to 500,000 yuan.

Fines for smaller transactions range from 20,000 to 200,000 yuan. The new law will take effect on March 1st.

The supreme court’s decision also puts an end to rumors that the country would not entirely ban crypto in the nation. Eastern Zhejiang province recently increased power costs for cryptocurrency miners, implying that the government attempted to discourage crypto mining through high bills rather than legal action.

The action did not affect the crypto market, though, as the attention remained on Russia-Ukraine tensions. Markets had recovered overnight as stocks confidence increased.

China’s stance on cryptocurrencies should not be misinterpreted as an indication that it is ready to ignore the fundamental technical revolution that blockchain technology and tokenization have brought about.

The country is nearing the end of its digital yuan tests, which have already begun in several pilot projects around the country.

During the second half of 2021, a digital form of the country’s national currency, the digital yuan, was utilized in over $8 billion in transactions.

China’s measures to control and restrict crypto usage on its land are likely aimed at reducing the number of citizens and organizations using decentralized blockchains to conduct business.

The Russia-Ukraine conflict and China’s cryptocurrency rules appear to have impacted the entire cryptocurrency market. However, cryptocurrency remains a lifeline in conflict situations.

China’s tech firms are laying the groundwork for Metaverse applications; Here’s how

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Some of China’s biggest technology firms are starting to experiment and pushing their way to take on the metaverse realm. But there are fears of censorship and regulation amidst Beijing’s tough stance and hawkish behavior as it continues to keep a close watch on the practices of its domestic technology firms.

On the other hand, U.S. firms like Facebook parent Meta have fully embraced the metaverse concept, while Microsoft’s acquisition of gaming company Activision indicates its firm footing in the virtual world network.

Compared to that, Chinese firms are taking a more cautious approach.

China’s tech giants splashing the metaverse waters

In November, gaming giant Tencent CEO Pony Ma said the metaverse will aid in the growth of existing industries such as gaming.

Ma said the company has “a lot of the technology and know-how building blocks” to explore and develop the metaverse.

Meanwhile, ByteDance has pushed for an aggressive expansion into gaming over the last year. In August, the company acquired virtual reality headset maker Pico. Besides that, ByteDance also owns TikTok, the short-form video app, and its Chinese equivalent Douyin.

Alibaba this year said it would soon launch augmented reality glasses for virtual meetings. Last year Search giant Baidu launched a metaverse app called XiRang, a kind of virtual world that can hold up to 100k people at once. 

China’s tightly regulated metaverse

But all that comes under the close monitoring of the Chinese administration as the country continues to censor content on its tightly controlled internet.

In January, authorities passed a set of regulations that govern how internet firms can use recommendation algorithms. That was followed by draft rules regarding so-called “deep synthesis” technology. This is with relation to the type of software that could be used to generate or edit voices, videos or images, or virtual settings.

With regards to crypto usage, Liu from Daxue Consulting said, There’ll likely be very limited options for crypto,” adding that China’s digital currency might be used instead of crypto assets.

According to a report by Morgan Stanley, in China, the total addressable market for the metaverse could be 52 trillion yuan, or around $8 trillion. Despite strict laws and regulations tech firms like Tencent, TikTok owner ByteDance, and Alibaba could be the front-runners in this domain.

China starts digital yuan pilot trial on app stores

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China has released pilot versions of its digital yuan wallet application on both iOS and Android app stores. Meanwhile, the central bank takes it a notch higher by developing its digital currency. The local media, BlockBeats China took to Twitter to announce the launch.

The ‘e-CYN” app (pilot version), which was developed by the People’s Bank of China’s (PBOC) digital currency research institute, was available to download on the Chinese Android and iOS app stores, on Tuesday in Shanghai.

PBOC governor, Yi Gang had said in November 2021, that, the country opts to continue to advance the development of its Central Bank Digital Currency (CBDC) and enhance its design, usage, and interoperability with existing payment tools.

However, to download the trial app and activate the wallet, it is a requisite for users to reside in one of these 11 places in China: Shenzhen, Suzhou, Xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian, and the Winter Olympics area.

An early start for yuan wallet’s CBDC in China

While countries all over the world are still at the stage of investigation of Digital currency technology, The Chinese have embraced an ahead of time pilot through CBDC for public use.

The PBOC had been at it, racing ahead with its own CBDC project, rolling out a virtual version of the yuan in trials across many provinces, for a while now. Many experts have said that the PBOC is likely to be the first to fully launch a CBDC.

What China’s CBDC could mean for the world

China is one of the very few countries that favor technology becoming far more important than money. By issuing a digital yuan, the country isn’t looking to dismount the U.S. dollars as the reserve currency, according to experts. In addition to rolling out the digital yuan in domestic pilots, the Chinese have made use of the digital yuan as a condition in the Regional Comprehensive Economic Partnership, as a successor to the Trans-Pacific Partnership that includes China and not the U.S. More importantly, it is accelerating a reality first broached by cryptocurrency that with the right technology, own money can be created and the rails to move it.

Marathon invests in Bitcoin Miners worth $879M

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The Nasdaq (global market) listed firm, based in Las Vegas, Marathon Digital Holdings Inc., has made a ‘Record Breaking’ purchase of Bitcoin mining machines that are worth $879 million.

The purchase of Antminer S19 XP (Bitcoin mining machine) has been made from Bitmain, a company that makes hardware for blockchain and artificial intelligence applications. Marathon Holdings made this announcement in a Securities and Exchange Commission(SEC) filing on 28, December 2021. The deal is expected to increase the firm’s hash rate to 23.3 EH/s by early 2023.

The order was announced last week on 23 December 2021, but its purchase price had not been disclosed. The disclosure of the price of the investment was out in the open only yesterday, 28 December 2021. The order expresses the delivery of 78,000 units of Bitmain’s Antminer S19 XP mining machines, all through 2022.

Marathon to pay Bitmain in batches

The machines are set to be dispatched in six batches, each consisting of 13,000 units, which will be delivered each month starting from July 2022 till the end of the year. The payments by Marathon to Bitmain will also be made in respective segments.

Marathon said,

“35% of the total amount within two days of execution of the purchase contract, 35% of each single shipment price at least six months prior to each such shipment, and the remaining 30% of each single shipment price at least one month prior to each such shipment.”

Marathon Digital Holds Inc. is expected to have 199,000 operational miners generating 23.3 exahashes per second(EH/s) by early 2023 and a 600% increase from current levels, as per reports.

In 2021, Marathon Digital made large purchases of miners, and in October obtained a $100 million revolving lines of credit with Silvergate Bank in bitcoin and U.S. dollars to go toward its mining operations and buy new equipment.

After China’s ban on Bitcoin mining in October, the share of U.S.- based BItcoin mining has increased significantly. The U.S. is leading the Bitcoin mining market with an over 35% hash rate.

Bitcoin [BTC] Hashrate hits a 7-month high to reach 180EH/s

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The Bitcoin [BTC] Hashrate has gained by more than 23% in the last 24 hours, climbing to 179.41 EH/sec since its record high on May 2021. This comes at a time when the king coin’s price has undergone a sharp price correction of more than 17% in a span of 24 hours, in contrast to the rising hash rate.

Zooming out, more than 54% of bitcoin’s collective computing power, went into a nosedive in the period between the month of June-July owing to China’s clampdown on the mining rigs. Since then, the BTC hash rate has risen by a whopping 163% from its all-time low of 68 EH/sec, five months ago.

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Bitcoin [BTC] Hashrate hits a 7-month high to reach 180EH/s 4

The mining hash rate is an important metric on the security aspect. This is due to the fact that the hashing represents the computational power in the network, so the greater is the difficulty level of the network, the higher the security and its overall resistance against malicious attacks. Although BTC’s exact hashing power is not known, it is possible to estimate it from the number of blocks being created and the difficulty level of the current block.

Bitcoin [BTC] hashrate since China’s ban

The Bitcoin network hash rate is nearing its complete recovery since China’s ban this year. The communist nation which initially hosted more than 70% of the total BTC hash power, went on a massive crackdown on the mining rigs, forcing a considerable amount of miners to go offline, plummeting the hash rate to its all-time low in July. Months later the metric completely recovered and held onto its momentum.

According to a recently published report by Kraken Intelligence, following the ban, miners relocated to friendlier nations and started getting back online, which gradually increased the hash capacity and the network’s mining difficulty also started adjusting upwards. Reading along with the same, the report further noted,

“On-chain data shows that computational power deployed to the network is likely to continue heading higher and might hit a new all-time high in early December. While much-expected hash rate to hit an all-time high at the tail-end of December, the network is now pacing to beat expectations amid an ongoing surge in demand from miners. Though the latest recovery in difficulty suggests miners have by and large completed their migration to overseas locations such as North America, Kazakhstan, and Russia after being prohibited from mining in China, it’s also a testament to the confidence in miners underpinning the network.”