Bitcoin Asia: China Emerges as New Frontier for Bitcoin Innovation
Ah, the Wild West. The Man with No Name, John Wayne, Billy the Kid, Jesse James.
The frontier has a way of capturing the imagination of people of all ages. Cowboy, outlaw, gold digger. A land of opportunity and harsh cruelty. I can’t forgive, but I can’t reject it.
Bitcoin was once such a frontier. In the early days, fraud, “criminals” and underground markets were rampant. The underbelly of the Internet embraced it first. It was an agora filled with exotic and obscure characters. It thrived as a counterculture without any rules or regulations. There is no government to protect you from yourself. No KYC, no AML. All you need is your name, PGP key, gribble, and Web-Of-Trust. Luck comes, fortune disappears. A beautiful chaos ruled only by the authority of the Bitcoin blockchain. True anarchy.
Along the way, entrepreneurs and VCs stepped in, and the siren call of mass adoption invited judges into our territory. Now, 10 years later, the prospects for a new world centered on individuals seem bleak. Markets were institutionalized, businesses were regulated, and consumers were now “protected.” Dissent has been replaced by doctrine. Tradition and sovereignty were traded for religion, driven by expectations of gold and dollars. The bold dream of an underground economy is gone.
That is until we start looking overseas, in the Far East, where new frontiers surface.
wild wild east
I have not the slightest confidence in a man who makes no amends for the slightest vice. – Mark Twain
As I boarded a plane to Hong Kong last week, it was interesting to recall the timeline that brought me there.
Some would argue that the sun is starting to set on the Chinese Bitcoin empire after the famous block size war in 2017. Its golden child, Bitcoin, and its close associates suffered an embarrassing defeat at the hands of Bitcoin users at the time. Some never recovered financially from the ordeal. Certainly, the ban on the blanket industry put the final nail in the coffin a few years later. The miners were expelled and the exchange closed. Areas that were once ecological behemoths have receded into the shadow realm.
This dynamic puts many market participants in an awkward position. While NgU maximalists in the West have dipped into the KYC market, Bitcoin users in China have had to rely on unregulated cryptocurrency platforms to meet their needs. Two forks that will set the tone for years to come.
For better or worse, the consequences of these differences were starkly revealed at Bitcoin Asia 2024. Of course, there was full steam on display everywhere you looked. At least a few of them were either scams or will blow up in a way that makes them indistinguishable from scams. Most of them were stupid ideas. But what is noticeably missing? Centralized exchange booths and customary fiat operators. A new frontier!
Of course, the usual suspects are already hurling blame and trying to shame everyone involved.
You need to understand that a huge amount of energy has been expended over the last 10 years to clean up Bitcoin. Venture capitalists and Western entrepreneurs have laid out the red carpet to make fiat companies feel at home here, and this pesky Chinese market is making them somewhat uncomfortable. Their ideological boundaries have been broken down. The degens intersect en masse, challenging common NgU tropes. Foreigners are declared a nuisance because they are inconsistent with current doctrine.
They’re losing the narrative game, they’re losing control, and they’re scared.
yin and yang
What is the strictest law of our existence? growth. – Mark Twain
I myself have decided to embrace the emerging chaos. At a time when regulatory nooses are tightening around our necks, the return of our profligate eastern brethren is a welcome sight. A fair dose of anarchy is probably just what the doctor ordered to cure the prevailing disease of conformity.
I don’t know exactly what’s going to happen, but I know there’s a change when I see it. Although these are unpredictable times, excitement about the potential of a new technological era centered around Bitcoin is palpable. In the past 10 years, I have never seen such intense interest in Bitcoin development in this region. I think it’s pretty cynical to assume that nothing good can come from that.
The “Bitcoin L2” category has grown so quickly that most people now think it’s all just a scam.
Almost all of them are scams.
But moving from “no one is trying to build on Bitcoin” to “most of these new Bitcoin projects are scams” is a surprising improvement.
Bitcoin is back.
— Jack Voell (@zackvoell) May 13, 2024
Likewise, the desire to leverage Bitcoin capital is unprecedented. Some may scoff at this concept, but the prospect of Bitcoin-based financial markets has awakened a sleeping giant and we cannot put him back in the bottle. No sugar coating. This speculative tyranny will certainly bring with it lies, fraud, and deception, but Bitcoin has by no means been immune from them.
One thing is certain: we are well past the point of no return. The Bitcoin culture we all once imagined is outdated. It was a vision doomed to collapse. It’s too vain and too narrow. The pendulum has swung too far.
Like many complex systems, Bitcoin is an exercise in balance. Good and bad. East and West. Yin and yang.
As we enter this new cycle, pushing against the forces driving it seems futile, if not misguided. Bitcoin doesn’t change and no one is trying to change it. Rather, the world around us has evolved and it seems better to channel this energy into something productive rather than fighting.
When the wind direction changes, some people build walls and erect artificial windmills.
