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Bitcoin interest drops in China amid crackdown on social media and miners

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This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

This week, following a tumultuous few weeks of regulation, the Bitcoin world’s focus shifted to Miami and Latin America. Searches for Bitcoin on China’s most popular social media app WeChat stabilized between 1-3 million per day, a stark difference from the peaks of over 10 million that were seen in late May.

Weibo and Baidu half pulls the plug

Baidu, China’s dominant search engine, restricted searches for exchanges Binance, Huobi, and OKEx early in the week. Typically, large internet companies work under the watchful eye of government and party officials, making this move somewhat expected. Filtering out keywords isn’t always the most effective solution, as searches for “Binance App Download” would still take users to the requested link. It’s worth pointing out that the government has limited authority in these cases since most of these big exchanges, particularly Binance, are registered in other countries and have a limited physical presence in China.

More effective was the silencing of cryptocurrency influencer accounts on micro-blogging platform Weibo. According to reports in Cointelegraph, at least a dozen accounts were suspended with a message that they had violated relevant laws and guidelines. This can have a much more sobering impact on the Chinese cryptocurrency community as influencers are often a primary source of information, especially for users who don’t access traditional western social media platforms.

Western province slams door on miners

On June 9, a district government in western Xinjiang issued a “notice to immediately suspend virtual currency mining enterprises.” The report announced that companies engaged in digital currency mining must halt production by 2PM on June 9 and report the suspension to a local reform commission. This resulted in significant drops in global hashing power, with Chinese-backed Ant Pool dropping by more than 30%. The last month has seen a bevy of regulations against mining companies as China prepares to try and meet carbon emissions goals. Miners are still scrambling to adjust to new regulations with many heading to more lenient countries like neighboring Kazakhstan.

In it for the technology

The Monetary Authority of Singapore announced it has received over 300 applications for crypto payments and exchange licenses. Singapore is a common location for Chinese companies to domicile as it is home to a thriving FinTech sector but remains close to the mainland, both in terms of geography and cultural ties. One of the companies disclosed was internet giant Alibaba. Alibaba has come under the microscope back in China for it lending practices, so it’s no surprise that Alibaba and other Chinese companies might want to diversify their financial offerings in other regulatory regions.

Accelerating the pace of change

On June 7, China’s high-ranking Ministry of Industry and Information Technology issued guidelines on accelerating the application of blockchain technology in the industrial sector. It targeted 2025 as the year that blockchain should penetrate fields such as supply chain management and traceability for internationally competitive enterprises. This will be of interest to a number of public and private chains that are able to develop within the confines of the Chinese regulatory framework. Despite cryptocurrency facing strong backlash, the Chinese government hasn’t backed down from its hopes for blockchain to be a driver of economic growth in the country.

For those looking to better understand China’s ambitions in this area, government-backed BSN hosted a webinar about China’s pursuits in emerging technologies. China technology experts Winston Ma and Paul Schulte covered a number of topics including blockchain, central bank digital currencies and even some more controversial geo-political issues. Cointelegraph’s Man in Shanghai himself was on hand to moderate, keeping an unbiased eye on things.

Bank on it

On June 8, the Hong Kong Monetary Authority released a “Fintech 2025” strategy to enhance research on a central bank digital currency. The Hong Kong Monetary Authority is working with the Innovation Hub of the National Bank for Settling and Clearing to bring a central bank digital currency to the retail level. This area is an interesting space to watch to determine how the e-HKD will be similar to the e-CNY, and what that means for the financial future of the region.



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If the peer review system is broken, what the hell is the point of Cardano’s reliance on it?

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In a recent interview with Lex Fridman, Charles Hoskinson, the founder of Cardano and co-founder of Ethereum offered his views on Bitcoin. The 33-year-old was less than complimentary, calling it “slow” and in desperate need of an upgrade. Hoskinson also took issue with the recent Bitcoin conference in Miami, comparing the whole thing to a ridiculous religious movement.

“I can’t for the life of me understand, what the hell is the point of Bitcoin?” asked Hoskinson.

But while Bitcoin has proven itself an adaptable blockchain with a decade of history, many within the crypto industry have significant questions about the “point” of Hoskinson’s own project, Cardano.

A week before this interview aired, Vitalik Buterin sat down with Fridman for a lively discussion. The Russian-Canadian programmer was asked about Cardano, and whether or not he thought Hoskinson’s project had a future. Buterin criticized Cardano’s reliance on the peer review system. Instead of focusing on academic proofs, Buterin favors a more heuristic approach. This was a sly dig, a super-geek mic drop.

Related: Bitcoin is ‘own worst enemy’ and will lose to Ethereum: Charles Hoskinson

For those unfamiliar with Cardano, the idea of peer review is very much a leitmotif of the budding proof-of-stake blockchain platform. This, we’re told, has investors excited. And so it should, in an ideal world. Peer-review is the principal metric by which scholarly legitimacy is measured. For progress, the evaluative process is invaluable.

With Cardano, it has been suggested that the term ‘peer review’ is little more than a clever marketing ploy, an ingenious way of giving the proof-of-stake blockchain platform an air of superiority. Yet Hoskinson is a staunch advocate of peer review and fiercely defensive of any criticisms that come its way. He appears to be fully invested in academic proofs. But is this a smart investment?

When one actually examines the state of today’s peer-review system, the answer appears to be no. After all, the peer review system, we’re told, is positively “toxic.”

Last year, David Rosentahl, a highly respected British-American scientist, wrote an article titled Breaking: Peer Review is Broken. As Rosentahl argues, peer review has been in a ruinous state for well “over a decade,” with cases of fraud occurring on a regular basis.

As Science magazine warned back in 2018, “the number of articles retracted by journals” has “increased 10-fold during the previous 10 years,” with fraud accounting “for some 60% of those retractions.” Three years on, things don’t appear to be getting any better. If anything, they are getting worse.

Across the board, from math to social sciences, the peer review system continues to be plagued by biases and tribalism.

John Baumgardner, Ph.D., asks the following, “Are there circumstances in which the scientific method ought to work, but for which the method does not provide ‘an accurate representation of the world’ — that is, a correct description of the way things really are?” Unfortunately, Baurngardner concludes, “the answer is yes.” To paraphrase Freemason Dyson, science is more mystery than truth.

What the hell is the point of Cardano?

If Bitcoin is nothing but an overzealous religious movement, what is Cardano? Fridman put this question to Hoskinson, who then proceeded to speak for 9 straight minutes outlining the ways in which Cardano gives “digital identities” to people in developing countries.

Others, however, see Hoskinon’s brainchild as something far less noble. According to Galaxy Digital CEO Mike Novogratz, Cardano is a “cult,” and a “weird” one at that. By default, this would make Hoskinson a cult leader.

Whatever the pros and cons of the technology that underpins the Cardano blockchain, and whatever Hoskinson’s loyal followers may see that’s worth investing in, the concern is that the cult of science is very real — and that an overreliance on the peer review process could prove to be highly problematic.

The irony of Hoskinson’s argument is that while Satoshi Nakamoto may not have jumped through peer review hoops to promulgate his white paper, the market itself has already passed judgement on Bitcoin. If peer review is “the evaluation of work by one or more people with similar competencies as the producers of the work” then Bitcoin has been reviewed positively for a decade by some of the most talented developers in the world.

Certainly it has its critics. Certainly it has its flaws. But exposure to the real world forged Bitcoin’s resilience. And whether Cardano will survive in the heat of real world usage is still a matter for some debate — as tech historians love to remind us, Betamax technology was superior to VHS, too.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

John Mac Ghlionn is a researcher and cultural commentator. His work has been published by the likes of Bitcoin Magazine, The New York Post, The Sydney Morning Herald, and National Review. Follow him on Twitter @ghlionn





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Banque de France tests digital currency-based securities settlement

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The central bank of France — Banque de France — is continuing its work on the development of a European central bank digital currency (CBDC).

On Monday the bank officially announced the successful completion of a CBDC experiment with major Switzerland-based cryptocurrency bank SEBA.

Conducted in collaboration with SEBA, Banque Internationale à Luxembourg, and Luxembourg central securities depository LuxCSD, the experiment used a CBDC to simulate the settlement and delivery of listed securities on TARGET2-Securities (T25), a European securities settlement engine. 

SEBA purchased securities from Banque Internationale à Luxembourg, with post-trade settlement managed by LuxCSD. 

Related: Digital euro offers better privacy protections than private stablecoins: ECB official

Nathalie Aufauvre, general director of financial stability and operations at Banque de France, said that the latest CBDC test demonstrated the possibilities for conventional finance systems and distributed systems to interact. “It also paves the way for other alliances in order to benefit from the opportunities offered by financial assets in a blockchain environment,” Aufauvre said.

The bank noted that the new CBDC test is part of an experimental CBDC program launched in March 2020, that aims to test CBDC integration for settlements. The program’s other experiments will continue until mid-2021 as Banque de France, in addition to other central banks in Europe, tests the viability of CBDCs.