The weekend’s bitcoin unsupported rumour was that China is to support the currency … allegedly.
If you thought parts of the bitcoin community were susceptible to swallowing rumors, this latest incident just took it up a notch.
A user on reddit posted a link — and summary — of a documentary on bitcoin from CCTV, the Chinese state broadcaster. This, before a translation had even been offered, was taken as tacit support from the Chinese government for the currency.
A more likely explanation came from a reddit user who took the view that cock-up is more likely than conspiracy.
Reddit user avsa said:
-“Ying, is there anything about cryptocurrencies on the official censor list?” -“no, what’s that?” -“I don’t know, it sounded complicated” -“whatever then”
“Governments aren’t one omniscient being, but lots of bureaucrats who just want their payday.”
If the Chinese government has an interest in ending the dollar’s reign as effective currency of exchange, one has to wonder why they buy quite so many US government bonds. And why they’d choose an anonymous, uncontrollable, web-based currency as its replacement.
The story was bolstered by apparent record downloads of bitcoin clients to China — which is no surprise given the TV show, and doesn’t prove support from the Chinese government or anyone else.
Nor should we ignore the existing attitude to Chinese alternative currencies. Asia’s interest in social networking began long before the US’ and Europe’s did. Many of these included internal currencies — though, admittedly, these were for buying widgets for your homepage, rather than true attempts at real-world currencies.
The most popular Chinese social network is QQ, which started as an instant messenging clone. QQ added functions from South Korea’s Cyworld, which was an Asian Facebook before Mark Zuckerberg had even started coding Thefacebook.
Cyworld not only cracked early social networking but also got its customers to pay for it. South Korean kids were keen not only to build a basic “minihompy” (mini-homepage) but also paid to decorate the page and to play background music on it.
So QQ users in China can use Q coins to buy digital items for their homepages. But the coins were starting to bleed out onto other sites and were beginning to be used for yuan exchanges and “real” goods and services. That was until the Chinese government put a stop to it.
Not today, thank you
Q coins are not bitcoins … but they might tell us more about Chinese attitudes to online currencies than a supposed spike in client downloads over a bank holiday weekend.
Cyworld lost out to Facebook in the end, not helped by a hack attack which compromised almost the entire South Korean population.
The real reason the Chinese government is not yet embracing bitcoin is because to do so would require it to change its entire attitude to the internet and privacy.
Giving Chinese citizens access to the tools they’d need to use bitcoins — like Tor networks and other encryption technologies — seems highly unlikely.