The forum title was obscure, even by cryptocurrency standards: Web 3.0 Blockchain Application Cum Computing Power Overseas and Distributed Storage Conference.
But attendees at the event in Chengdu, China made it clear why they showed up amid a government crackdown on Bitcoin mining. They are looking for ways to stay in the cryptocurrency, even if that means testing their luck in lesser-known parts of the ecosystem that may or may not come under Beijing’s wrath.
While many miners have fled China, these cryptocurrency enthusiasts are betting they can continue to thrive under Communist Party watch by turning to lesser-known tokens and decentralized storage technologies with names like Filecoin. , Swarm, Silicoin and Chia. It’s a high-risk bet at a time when Xi Jinping’s government is stepping up surveillance of energy-intensive industries and anything that could pose a risk to financial stability.
Filecoin is a “gray area company that has yet to gain the attention of regulators,” said Tom, who works for a Shanghai-based company that makes mining machinery. Like many of those interviewed for this story, he asked not to use his full name given the sensitivity of the subject in China.
Despite the steady pace of headlines about China’s cryptocurrency crackdown, the mood at the Chengdu Marriott Hotel Financial Center was generally upbeat. At a pre-conference schmoozefest not far from the hotel, attendees toasted themselves on Moscato Rose wine and Harbin beer, while munching on yam crisps, fruit platters and mini cakes.
A minor named Li said she was initially upset after China imposed a sweeping ban on Bitcoin mining and trading at the end of May, but has since moved into mining. Filecoin, which she hoped to be more stable because it was “less energy consuming”.
Wang, another miner at the party, said he is investing heavily in Ethereum and further plans to more than double by 30 the number of mining complexes he operates in eastern China, including one on the island of Chongming in Shanghai, an area known for its wetlands.
Zhu Can, whose Smart Cloud Computing firm owns data centers and assembles machines, is betting on Swarm. Coin miners are rewarded for the data storage and processing services they provide, which are then used in the so-called distributed storage ecosystem as payment for data interactions, Zhu said. He was optimistic the government would approve the digital asset even though it is cracking down on other areas of crypto.
“It’s like when the Internet was there and a lot of people used technology for scams,” Zhu said. “This is something that needs to be cracked down on by the government.”
China has banned cryptocurrency exchanges and initial coin offerings, but has not prohibited individuals from holding virtual currencies. Anhui province pledged earlier this month to shut down all mining projects over the next three years, following similar efforts by Inner Mongolia, Yunnan and Sichuan. China also arrested more than 1,100 people last month for involvement in activities using cryptocurrencies for money laundering.
Tan Weizhe, managing partner of Zhizhen Capital, said many Chinese miners are now taking a wait-and-see approach. Nonetheless, he expects a big change to happen overseas around the Chinese National Day in October, given the more favorable legal environment in places like the United States. His company offers power mining migration services and manages cryptocurrency mining operations in the United States, Canada and Australia.
“Mining machines are considered personal property in a democratic country and therefore somewhat sacred and inviolable,” Tan said.
In a time of both disinformation and too much information, quality journalism is more crucial than ever.
By subscribing you can help us tell the story well.