Daily: is China in LOVE with Blockchain ?!?!

So today on Box Money Daily, I'm going to start off with the market analysis. And it seems that China is trading quite a bit. So this kind of episode will mostly center around two Chinese topics. We have China, they're praising blockchain at an official event, but they're using the official party language. So we're going to look and analyze the language and how that affects future blockchain development. We also have NIO. There is a certain amount of FUD surrounding NIO right now. So we're going to take a deeper look and deeper dive at what's happening over there. We also have, of course, Bitcoin transactions. The volume is at an all-time low right now, which means it's a really good time to start sending those transactions or even combining your transactions on your current wallet because it's much cheaper. So guys, all this and more on today's Box Money Daily. My name is Michael, and everything covered here is my personal opinion, not financial advice. And I would like to give you a big shout out to everyone who's supporting this channel and, of course, hitting up those like buttons. So let's take a look at the market recap first of all. So not much is really happening on the market. We're still pretty much stuck on the $447 billion market cap right now. I do want to notice, of course, there's a big drop in the price of Ripple. Yesterday, there seems to be this rumor going around that Ripple is listing on, of course, Coinbase. But honestly, rumors are just rumors. And I really never speculate on exchange rumors, especially because, well, how can you even verify? Just because two CEOs might be appearing together doesn't mean anything. But on top of that right now, we have a lot of trade volume on Chinese exchanges. So if you look at OKEx, Huobi, they're kind of topping the trade volume for Bitcoin and for Ethereum. It seems like China is kind of hot right now in terms of trading. Well, at least Chinese exchanges. These Chinese exchanges are a little bit interesting because, of course, they don't really allow Chinese users, but they're run by ex-Chinese people. So something interesting is definitely happening over there. One thing about this whole current period is that because there's less and less speculation going on in terms of Bitcoin, there's really less and less transaction volume. So we do hit a two-year low for transaction volume. And that means the fees for sending Bitcoin transactions are dropping. This means right now, if you really want to transfer some Bitcoin, well, you can send it at a much cheaper price. Exchanges are also lowering that withdrawal fee. We've seen that with multiple exchanges like Coinbase. There's a neat trick you can do right now because the transaction fees are low. And that's called combining your transactions. So something interesting about Bitcoin is that the amount of fees you pay doesn't depend on the amount of Bitcoin transactions you transfer, but the number of inputs it refers to. And inputs are how many different people send you different transactions. So every different transaction you receive is a different input. So if you have lots of inputs going into a wallet, for example, if you receive multiple payments, you're a vendor or something like that, then right now is probably a good time to combine them into one single input. So in the future, it's a little bit cheaper to send. If you guys don't really understand what that means, leave a comment below because I want to explain how this UTXO model works and how that affects transaction fees. And I don't know how many people want to understand that. So if you do want to understand it, leave a comment below and I'll explain this in a little bit more detail. Now onto the feature topic of the day, which is China. So right now we have this interesting situation developing in China where they like blockchain and dislike cryptocurrency. So this is really emphasized in the newest event. So the interesting thing is that Pony Ma, the CEO of Tencent, if you don't know what Tencent is, they're a huge conglomerate in China. They control basically most of social media. So they have QQ and WeChat, and they're the primary means of social interaction in China. Well, he came out and said, well, although the invention of blockchain is excellent, the key to its future largely lies in its actual applications. Meanwhile, ICOs remain highly risky. We do not intend to participate in launching our own cryptocurrency. So this is something that's very much a party line. So what he's saying is very politically correct in China. They don't want to create their own cryptocurrency. They acknowledge that blockchain is extremely revolutionary. So they want to be in the space and not issue their currency. So what does that mean? That means they're going to support private blockchains. So the reason why is because if you have a public blockchain like Neo, Ethereum, VeChain, or even Bitcoin, that means you must reward your nodes with some form of currency. That's the way you prevent Byzantine actors. So the way they try to go around this, the way the Chinese government is pushing this, is they're really heading down hard on ICOs. And they're promoting these big internet giants to adopt their own private blockchain. We also see Alibaba. So a subsidiary of Alibaba called Lynx Technology, they're trying to use and leverage blockchain technology for shipment logistics. So it seems like these big companies, Tencent, Alibaba, might favor the private blockchain because that's what the party line is. And they kind of want to not piss off the Chinese government. Let's just say that politely. So this is why it's so carefully phrased. That's why Tony Ma's statement is so carefully phrased to please the government regulators so the government keeps protecting their industry as well. They really benefited from the fact that Facebook was banning China. They benefited from the fact that Google was banning China. Well, Baidu really took off because Google, one main competitor, was removed off the table. So definitely this great firewall has allowed these Chinese tech companies to develop very well. That being said, there's also a limitation to private blockchains as well. The idea of having a trustless system is that different people, different people that's not part of the same company also hold nodes and they also hold a say on the network. So this is the idea of Ethereum or Bitcoin. The fact that different people now hold nodes means that you can basically not change the blockchain. And also, of course, the software, the smart contracts are going to run according to the network rules and these network rules cannot be changed unless the consensus change, unless the whole network itself, including the outsiders, adopt. And this is where you gain the trustless property because there's outside people making sure that this blockchain is honest. So right now, we definitely have this kind of competition between the private and the public blockchain. And an example that China is still using the public blockchain is with VeChain. So they're building a new, VeChain is helping China build its new smart city of Guayan and they're using a lot of the technology for product and anti-counterfeit. The reason why you want to do that is because, well, with anti-counterfeit, you don't want one party controlling all of the nodes. Well, otherwise, it's just going to be a giant database and it's going to be exactly the same as before. The power of the public blockchain is that the public now controls the network and then you can't really alter it without the public's approval. So we have these two competing technologies going inside and it's going to be interesting to see which one China is going to prefer because with a public transfer, you get transfer value between different corporate entities as well. So if Chinese giant Alibaba adopts this shipping logistics, adopts blockchain using their own private blockchain, releasing that information outside is going to be a little bit harder for people to really verify that it's complete. It's basically one company telling you, yeah, trust us. We haven't changed our own shipping records. But of course, if you're doing and submitting that to auditors, for example, PricewaterhouseCoopers, which is what VeChain has partnered up with, then you want a trustless entity. You want a public blockchain so that this proof that you're providing was verified by the public blockchain. So now let's move on to the last topic, which is NeoFuzz. So recently there's been a big dip in the price of the green giant known as Neo and the reason for that is this uncertainty over why the network paused. Is the network really safe? And do they even have enough nodes? So this question really came about from Eric's Walls tweet. This has been quoted quite a few times. And he questioned how decentralized is Neo and also why their peer-to-peer system paused, why the DBFT consensus mechanism stalled for a while when one of the nodes seemed to have disconnected. So this has been basically at the center of a debate for a while and I want to talk about a few things. So one thing about the nodes and what Neo is doing right now is quite interesting because this has been known for a while. The fact that Neo has seven consensus nodes right now managed by Neo Council should not be a surprise to anyone who's researched Neo. So Neo is now choosing to have less consensus nodes because they want faster development. If you think about it, Neo really tagged on the smart contract feature and they really quickly improved on it. So they're kind of sacrificing decentralization at its current point for faster development. And I've said this many times about technology. It's always this kind of compromise you have to deal with. Do you want more decentralization and slower upgrades? A little bit like Ethereum. Think about how it takes almost two years for Ethereum to upgrade a new feature on their network versus faster deployment but less decentralization. So there's a compromise there that you have to choose. So Neo has selected to have a faster development and less nodes because they're a younger project. So right now they have seven consensus nodes running and they want to improve that. And that's what something that was covered in the Neo DevCon at which I attended. So now comes another bigger question is why did the network pause? Because of course when these networks pauses, if a node does something a little bit weird, there's a meant to kind of protect itself from it. That's the whole idea of a Byzantine fault tolerance. The fact that if one of these nodes don't really do what they're supposed to do, you're supposed to tolerate that. They have gone Byzantine. That's a kind of fancy name for they've gone not supporting network, maybe even attacking the network. So if they do go Byzantine, the network must find a way to protect itself. So what Neo tends to do is that Neo tends to prefer pausing and make sure there's finality that transactions aren't messed up over of course performing and continuously pumping out new blocks. So the network did perform according to Da Hongfei. It performed as it's supposed to do if there's an event of some sort of error. And that was the case. There seemed to be some sort of bug there as well. So you can read up a more detailed article on this and they're trying to fix the bug, which caused the pause as well. I do want to say before ending this episode that China is really being behind this kind of opaque curtain right now. We really don't clearly see what's happening in China. And I've been trying to gather as much information as possible. One bit of news that has been really wrong over the past few months is regarding mining, because we've seen more and more articles saying that China has banned mining. And people even take it to be true that China really did ban mining and that Chinese miners have completely left. This is completely untrue because yesterday I had a talk where Peter Nguyen he runs one of the big mines in China. In fact, he runs enough mining or power. He can take miners consume enough power to power 200,000 homes. And he has known and he knows that Chinese are still running these mines. But the problem is, is that these miners don't want to come out to reveal the location. They don't want to be part of any formal statistics. And he says the bigger, biggest factor for miners moving abroad is not because of government policies, but rather cheaper electrical costs in countries like Canada. And of course, in the ring of fire, I'm definitely going to cover more China to allow us as a channel to learn more about what's happening on and having a global picture. And one thing that you can know for sure is that the fact that the Chinese government is cracking harder and harder and harder on cryptocurrency trading means that there's still a lot of Chinese people trading cryptocurrencies in China. So don't look at what they say, look at what they do. So guys, I'd love to hear your comment about what's happening in China and what you think is going on and something that questions that you might be concerned about as well. And I'd love to try to find those out for you as well. Thank you guys so much for watching this episode. Remember to click the little subscribe button to subscribe to this channel. And of course, check out my Instagram page. I'm doing these micro updates recently on Instagram and it's a hell of a lot of fun. Thank you guys so much for watching. See you next time.