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How does the Tron (TRX) future look practically now?

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Right from its beginning, the collective goal of the Sun-led foundation was to run a true decentralized platform that will ensure secure content sharing in a decentralized way. As the project got matured, it introduced DApps to manage the despotism for its community to uproot the disruption of the third parties like Google, Facebook and Apple that control and boast power to devourer and take financial share without any exertion.

Hereby, decentralized apps (DApps) allow a peer-to-peer connection among users to transact without any hesitation. Additionally, in attempt to complement its platform, it introduced TRX (its native token) with the total supply of 99 billion, circulating among various small and large projects.

As of today, Tron stands at 11th position by the market cap, trading at $0.0135 and is down by 5.37% in the last 24 hours. For many crypto enthusiasts, it will be intriguing to figure out how the things would go concerning coin as 2018 ends now.

It is worth noting that Tron (TRX) is one of the fast-growing projects due to its admirable efforts and strides, and it seems it would be in zenith soon. Hence, the experts have predicted that TRX price will surge to at least $0.5 by the end of 2021.

On the other hand, some investors and traders are anticipating that TRX will rise to an estimated price through the short-term period as of Dec 2018. While taking the recent performance of Tron into account, some analysts have concluded that it will be placed at an average price of $0.03, which points to 109% change.

Subsequently, mark $0.05 can be expected as the peak for Dec 2018. It is not sure that whether it will come to life because the rise and fall of virtual assets rely on multiple facts that affect the industry as a whole.

Despite the fact that bears are hugging entire market, Tron continued its progressive activities and launched an accelerator program last week, granting 1 million USD to the developers to build their dream DApp. The amount will only be used for innovations in the blockchain to make it more attractive.

What TRX value can we expect after 2018?

It is a fact that predicting the accurate prices of cryptocurrencies is impossible, but experts spare no effort to portend. Analysts produce deviations by taking the current behavior of the market into account, and also examine the historical data along with polynomial regressions.

In this case, Tron (TRX)‘s projected rate is $0.03.5 for Jan 2019 and also can rise between $0.4, a topmost figure that can come to happen in q1 of the upcoming year. The digital asset might grow steadily beyond the year 2019.

The flutter between the $0.03 and $0.04 would come to the table from May to August. With that passage of time, the digital currency led by the visionary leader, Justin Sun, can record a change nearer to 199.46%

Subsequently, beyond the last quarter of 2019, the projected price of TRX seems to be hovering between $0.05 and $0.07.

Reasons why Tron (TRX) has been holding the grounds

Tron is barely a year old, but the blockchain firm has achieved an accountable success already. Why? We hear you ask. First, it has an excellent team. Second, the project has boarded vital partners regularly. Third, it never stops, keeps sealing deals and all.

Image courtesy of Pixabay

SR Rewards – TOP 5

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In a previous article, The Tron Standard, I talked about the benefits of having a democratic process for running a blockchain network. The conclusion was that it’s the most efficient and self sustaining method, through which all parties involved win and contribute to the development of the ecosystem. In this article I will focus on the community’s benefits for voting Super Representatives.

The battle for a SR position is fierce. New SRs are entering the scene every now and then, and causing turmoil. The 27 positions are occupied by the teams and projects most trusted by the community. However, the rewards granted for voting for a SR, play an important role as well. Thanks to the TronGoodies website, it is easy to see the current rewards.

Current ranking:

1. SesameSeed. It’s no secret that voting for Sesameseed right now grants the biggest rewards. A total of 8.89 SEED for every 100K votes, every 4 cycles means a total of 49 TRX at 1:5.5 conversion rate in Telegram trading channels. However, this big reward does not come without any risks. Without a fully functioning DEX, most of the trades are performed in Telegram trading channels where scams have been on the rise lately. Editing Buy/Sale messages is a known issue that is yet to be fixed. Same goes for trading decimal messages by mistake, and selling SEED for .6 or .7. So even if the SesameSeed voting reward is bigger than most SR’s, an additional involvement from the voters is required if they desire to convert their SEED to TRX, and it’s not risk free.

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SesameSeed are well known on the Tron Network as being ecosystem builders and DApp funding accelerators. They have a track record of delivering on time, being professional and helping the Tron community.

2. TRONSiliconValley. Voting for TRONSilliconValley with 100K TRX would grant you 25 TRX every 4 cycles, placing TRONSilliconValley on the second place terms of profitability. This SR is currently offering 90% rewards back to its active voters, have a gambling DApp and have launched their token on the network called WIN. The team members wish to remain anonymous.

3. CryptoGirls. Recently CryptoGirls decided to increase their shared rewards to 85%. As a result, they were placed on the third place regarding rewards granted to their voters. Currently, 100K votes for Cryptogirls would grant you 24.83 TRX every 4 cycles. The advantage for voting Cryptogirls is the fact that you get paid automatically in TRX. You can easily check your upcoming reward on their website. CryptoGirls’s future plans focus on developing and sponsoring the development of tools for the community.

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CryptoGirls are known for helping several SR candidates run nodes on the Tron Network. They also guided several SRs such as Tronstronics, Tron-Europe, and SR candidates such as CommunityNode, Swisstron and FreeSpaceWIFI to implement and configure the CryptoGirls automatic script to pay voters. They developed personalized versions of their script for token creators such as CityUPTAKE and Tronstronics to distribute TRX tokens instead of TRX to their voters, or to airdrop tokens to the wallets that own that token.

4. Tronstronics. Voting for Tronstronics with 100K TRX would grant you 5.63 TRX every 4 cycles, and additionally, 1000 of their own token called Tarquin. Tarquin is currently sold at about 34 TRX for every 1000 Tarquin. The reason Tronstonics is on the 4’th place in terms of rewards is because Tarquin has a limited number of people interested of trading it. Unlike SEED, it has a reduced liquidity and it doesn’t have a clear use case, but it does have SEED’s trading risks in Telegram channels.

5. TronWalletMe. Voting for TronWallet with 100K TRX would grant you 24.46 TRX every 4 cycles. This SR already has a functioning product, a wallet which you can download from Google Play and Apple Store. The team also has their own token called TWX which will be used on their soon-to-be launched P2P DEX.

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These are the best rewarding 5 SR’s at the moment, which are available on the https://www.tokengoodies.com/ website. Keep in mind that these numbers and rewards are constantly changing, so the numbers in this article might be old news in a few days/weeks/months. Do your own research and vote for the SR which you desire. Sometimes the highest paying SR may not necessarily be the the best choice. It all depends on your perception of them, your values and your objectives.

Bitfinex Adds Three New Tron Pairings

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Tron was given a boost in popular cryptocurrency adoption when Justin Sun, the Founder and creator of the number 11 ranked cryptocurrency announced that Bitfinex, the popular cryptocurrency exchange, will start support three TRX pairings with the Pound Sterling [GBP] Japanese Yen [JPY] and the Euro [EUR]. The Tron official wrote on Twitter:

“Crypto exchange @bitfinex adds #JPY, #GBP and #EUR trading pairs to #TRON. #TRX $TRX.”

Bitfinex has created quite a lot of news in the cryptosphere with several traders appreciating the platform for its features and ingenuity. At the recently held Ethfinex Government Summit, Parolo Ardoino, the Chief Technology Officer of Bitfinex delivered a talk about his exchange discussing the recent products, Ethfinex and EOSFinex with the community. Here, he conveyed that Bitfinex created these products to follow an unbiased approach to avoid disputes within the developers’ community.

The updates come in the wake of a bear market that has shocked many investors. Tron supporters have openly stated that the announcements from the house of Tron have come as a sort of reprieve when a lot of the other cryptocurrencies have gone silent on the developmental front. With price movement fluctuating tumultuously, the Justin Sun led cryptocurrency has been trying hard to overtake its rival, Monero, on the cryptocurrency charts.

The community reeling after the announcement, Coin Lis, a cryptocurrency trader and blockchain enthusiast commented on Justin Sun’s Twitter announcement. She wrote:

“I knew some friends who were waiting for the EUR trading pair. They’ll be super excited! #trx #tron #crypto”

Another Twitterati, LockCrypto also put forth an opinion regarding TRX and the Bitcoin correlation movement. The comment read:

“More currency pairs / stable coin pairs means we don’t need to buy ETH/BTC anymore. go #tron level out the play field less correlation to bitcoin movement”

China BlockChain Part 1-Winning the most Important Race in 500 Years

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Blockchain is virgin territory, a new frontier. Getting there first, exerting influence, and dominating the market matters.

England, France, Spain, and Portugal all knew this when the New World was discovered.

America knew this with global force projection after WWII, and most recently, the internet.

But like all history, the empires of the past are not the empires of the future.

For anyone that is paying attention, President Xi is standing in front of China, conducting a masterful performance of Ride of the Valkyries as he leads his country to dominating the 21st century and beyond.

He is weaving a strategic future plan in military restructuring and economic dominance on three continents with new technology for finances and society.

It is a bold plan — reviving the silk road, harnessing blockchain, and upsetting the geopolitical status quo.

Winning the blockchain race and applying the technology to their One Belt One Road Initiative (OBOR) will allow China to neutralize America’s global influence.

China will reemerge as the Middle Kingdom in terms of global dominance and prestige — a time when China was the center of the world.

President Xi calls blockchain a “breakthrough” technology:

“A new generation of technology represented by artificial intelligence, quantum information, mobile communications, internet of things and blockchain is accelerating breakthrough applications.”

President Xi is pushing ahead on two fronts — geopolitical and technology.

China is unique because he can do so without being challenged politically and the Chinese are already accustomed to mobile pay, which is the same user interface blockchain technology will use.

China’s policy of a government and private sector hybrid approach to furthering Chinese interests which always supports the Chinese solution over the outside approach is well documented and expected to continue into the future.rad1 1

The Geopolitics

Why would China even want to undertake a massive modern silk road project through 69 countries, connecting 40% of global GDP?

To understand that, we have to understand a bit of history, geography, and the problem China currently sees for itself.

Stay with me, it won’t be bad. Promise.

The History

The original silk road was the dominant trade route from Europe to Asia from 200BC to 1500AD.

1700 years of trade traveled overland. It’s beautiful country. If you ever get the chance, go travel through the northern ‘Stans and see some of the ancient cities. Highly recommend it, but go early. The mountain passes close as early as October.

In the 15th century, a maritime route was found from Europe to Asia. It cost less, and was less dangerous than the overland route. Win-win.

Most trade shifted to ships and the importance of the Silk Road declined.

The Geography

Ever wondered why Singapore and Kuala Lumpur are located where they are?

Singapore and Kuala Lumpur literally sit at the intersection of maritime trade between Europe, Africa, and Asia for the last 600 years.

They are located on either end of the Strait of Malacca. The strait is 500 miles long, 1.7 miles across at the most narrow.

I’ve been through the Strait of Malacca, and at times, you could almost walk across the decks of ships, one to another, going from Indonesia on one side to Malaysia on the other and not get your feet wet. There are that many ships transiting, over 100,000 per day.

Nearly 18% of all oil produced in the world transits through the strait.

This includes eighty percent of China’s oil imports, with China the largest importer of oil in the world.

The importance of the Strait of Malacca to the world economy and to China’s economy specifically, and therefore her national security, cannot be understated.

Remember, Christopher Columbus sailed right off the map to the west to find a more direct route to Asia. In a way, the Strait of Malacca has shaped the last 600 years of geopolitics and empires, and will continue to do so.

The Problem

America was the clear winner from World War II. Its cities, manufacturing, capital markets, and infrastructure untouched by the devastation due to it’s geographical advantage of having oceans separate it from the conflict.

America capitalized on this advantage by continuing to project power through maritime force, establishing military bases and friendly relations with countries surrounding China for the last 70 years.

And there is the problem — China is surrounded. Held hostage by the Strait of Malacca and U.S. influence.

China is keenly aware that eighty percent of their oil supply has to pass through a 1.7 mile wide strait, and even the natural gas shipping routes north from the Western Australia Gorgon and Wheatstone projects must pass through waters largely controlled by the U.S. and their allies.

The first step to minimizing the risk this poses is for President Xi to continue to build bases and aircraft carriers.

He’s playing the hand he’s been dealt, and the U.S. has been dealing for 70 years.

This was the reason for the island building in the Paracel Islands, Scarborough Shoal, and Spratly Islands in the South China Sea.

China is building a buffer between their ports on the mainland and U.S. allies in the South China Sea to be able to guarantee keeping a shipping lane open to the Strait of Malacca and open ocean.

Both of these are not permanent solutions. The One Belt One Road Initiative is the permanent solution to the problem.

If you don’t like the game, change the rules.

Europe bypassed the Silk Road in favor of the maritime route through the Strait of Malacca in the 15th century because it was less costly and less dangerous.

What was old is new again.

China will go back to the overland route for the same reason Europe went to sea. It’s less costly and dangerous for them.

How is building an entire economic corridors of roads, railways, powerlines, pipelines for the next 30 years less costly and dangerous?

The cost they are measuring against is the total economic destruction of the country and the end of the Communist Party if 80% of their oil imports can get turned off by other countries.

That makes thirty years of construction and loans to other countries for the OBOR look like a great deal.

It’s much less dangerous to build a road and seek mutual cooperation than to continue to build aircraft carriers and compete head on against the U.S. Navy.

By reconnecting 40% of the world’s GDP along a land trade route, China is going to completely reset the geopolitical power dynamics which most everyone alive today has taken as absolute — in essence turning the clock back 500 years.

Long live the Emperor

In March, President Xi was elected to a second term with 100% of the vote. This was after lifting the presidential term, meaning he can now be President indefinitely.

Could President Xi pull a George Washington and step down after his second term in office, retiring to his farm in peace?

Maybe. We’ll see.

In the meantime, President Xi, and by extension, China has a distinct advantage in politics and long-term strategy over our leaders in the West.

They are united in their goal of winning the Blockchain race and pursuing their long term strategic goals. Completely undistracted by the politics of election cycles.

The fact that China even knows there is a race to win shows how far ahead they are than the leaders and legislators in the West.

President Xi is giving clear direction to China’s Central Bank and the country that China will win the blockchain race.

China is the largest holders of blockchain patents in the world with the People’s Bank of China submitting 41 patent applications in the last 12 months alone.

China’s State TV has said China expects blockchain to be 10x more valuable than the internet.

The China Center for Information Industry Development (CCID) officially publishes their ranking of crypto and blockchain projects consisting of the top 33 projects in their view.

The CCID is under China’s Ministry of Industry and Information Technology, a state agency of the People’s Republic of China.

China’s Communist Party has even released a book titled “Blockchain — A Guide for Officials”.

Not only is the Communist Party expecting state officials to be studying the book and understand blockchain, but one of the cabinet-level ministries is working on a blockchain standardization for the tech’s development in the country.

There is no one in a western government doing anything similar to this, and at this point, the chances of catching up are slim.

To put this race into scale, the current total market capitalization for the five largest internet based stocks in the U.S. are: Facebook ($470B), Amazon ($934B), Apple ($1.05T), Netflix ($157B), and Google ($813B).

Widely referred to as the FAANG stocks with a total market cap of $3.404 trillion U.S. dollars.

When the Chinese State TV is broadcasting to the country that blockchain will be worth 10x what the internet is worth, China believes the prize money for the country who can win the blockchain race and dominate this new frontier is at least $34 trillion U.S. dollars.

China believes blockchain will be worth more than the entire U.S. Stock market which is $30 trillion.

Wait a second.

How is a Chinese Mayor running around Shenzhen with his “Blockchain Guide for Officials” and building a deep water port on the coast of Pakistan so ships don’t have to go through a strait named Malacca going to make blockchain more valuable than the entire U.S. stock market?

It comes down to two factors. Adoption and network effect.

Adoption

China is about four to five years ahead of the West in mobile pay. Everyone uses their phones. No one uses cash or credit cards.

This is mostly due to the fact that credit cards never took off. When you’re sitting in Din Tai Fung eating some of the best dumplings you ever had in your life in Beijing, you just scan the QR code and pay with your phone.

Wall Street Journal video showing how widespread and easy mobile pay is in China.

For comparison, China does $9 trillion per year in mobile pay, compared to $112 billion in the United States.

So for China, as more blockchain comes online, the user interface isn’t going to change. They are already used to scanning QR codes and paying with their phone.

Network Effect

The most common way to value network effect is through Metcalfe’s Law.

In fact, Wall Street analysts use Metcalfe’s Law to value the FAANG stocks.

Essentially Metcalfe’s Law says that for every person who is added to a network the increase in value isn’t by one person, but exponentially by the number of interactions that one person can have with others on the network.

Now, we’re talking about China using blockchain along the One Belt One Road Initiative and connecting 69 countries through economic corridors, totaling 40% of the worlds GDP with trade from three continents.

And before it even starts, China is already at $9 trillion on mobile pay.

Thinking about the network value exponential increase, I don’t think I can accurately comprehend the exponential value increase that blockchain is going to provide when multiplied by the number of people along the One Belt One Road Initiative, all using blockchain.

It would only take a bit over a 300% increase to equal the U.S. stock market, and considering bitcoin has gone up over 80,000% using the network effect in the last seven years from 2011–2018, I would consider 300% easily doable by 2049.

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The Future — Shoes from Africa through Pakistan to Europe and Asia along the OBOR

A Chinese entrepreneur opens factories in eastern Africa where they make shoes for popular brands.

As a way to pre-clear customs on arrival in the deep water port of Gwadar, Pakistan, the entry point to the OBOR, as well as prove the authenticity of the shoes, a blockchain based NFC chip is installed in the shoes, and a different one on the container once inspected and sealed at the factory in Ethiopia. This helps cut down on the $400 billion per year business of counterfeiting and streamline customs and shipping.

The QR code is scanned on the container upon arrival — tracking data, import taxes all automatically captured.

The container is then loaded on a truck, leaving the port and entering onto the OBOR, in route either to Europe or to Asia.

As the truck enters the OBOR, the truck passes under a sensor which records the truck number, time, date, location, insurance and registration data as well as the container data and drivers data — all recorded to the blockchain which cannot be tampered with, altered, or destroyed.

Every time the truck passes through a new country, same thing, blockchain sensor records the information and tolls are automatically paid. If the NFC chip is tampered with, the code doesn’t work and the truck will be stopped for inspection.

Along the economic corridor, as the driver stops for fuel and food at Chinese trade alliance built facilities, all transactions are paid for through mobile pay Chinese blockchain apps developed by private companies through cooperation with the Chinese government.

The Middle Kingdom Returns

If China wins the blockchain race and is successful with implementing it within the One Belt One Road Initiative, the money Chinese companies will make across the OBOR through the network effect will be immense.

The geopolitical risk the Chinese government will mitigate for essentially pennies on the dollar by building the OBOR and bypassing the Strait of Malacca means political survival for the Communist Party while mitigating the threat posed by the U.S. Navy and allies.

The increased prosperity within China, as well as the geopolitical influence along the OBOR and throughout the world will be unlike anything seen in the last 500 years.

And going back to President Xi’s original comment,

“A new generation of technology represented by artificial intelligence, quantum information, mobile communications, internet of things and blockchain is accelerating breakthrough applications.”

It shows he is already thinking along these lines of what blockchain can accomplish as he pushes forward on the geopolitical and technological fronts to secure a better future for China.

Seeing parts of the old Silk Road was pretty cool. Maybe I’ll get a shot to ride along the 21st century version some day when China turns the clock back 500 years.

Stay frosty out there. — Radigan

 

China & Blockchain Part 2 : The World’s Most Undervalued Market

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Imagine if Facebook, Amazon, Apple, and Google had just gone public. You were a programmer building the platform — but you couldn’t own any shares.

That is exactly what is happening in China today.

Mr. David Li, the founder of Trinity recently explained on an AMA an interesting difference on how blockchain projects are valued between China and the West.

“For the Chinese who are working on blockchain projects, the price of the underlying project means nothing to them — since they can’t own it. They are focused solely on the tech.”

Thinking about the significance of that statement, I looked at the current daily trading volume for bitcoin to Chinese Yuan (BTCCNY).

The Chinese Yuan accounted for only 0.79% in daily trade volume to bitcoin.

Interesting.

When was the last time the Chinese public had a straight forward onramp from Yuan to bitcoin anyway?

December 2013. Almost 5 years ago.

China stopped mainstream financial institutions on the mainland from dealing with bitcoin in December 2013, when the overall market cap for all cryptocurrencies was only $15.7 billion U.S.

 

total crypto currency 1

Logarithmic chart from 2013 to Present — Total Cryptocurrency Market Cap

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Closer look at May 2013 to December 2013 market capitalization

The last time there was direct Chinese participation, the total market capitalization went up 881% in 6 months.

Since then, almost 5 years, the market has risen 1310% without the Chinese having a direct path to market participation.

That is a lot of pent up demand.

Imagine working in Shenzhen, seeing the market go up over 1300% while you are programming a blockchain project — and you can’t legally own any of it.

But that still doesn’t paint the entire picture.

The other part to remember is the difference in projects which made up the market in December 2013 at $15.7 billion compared to today, at $221 billion.

It’s a different world.

Here are the Top 25 cryptocurrencies by market cap in December 2013. I pulled this off archived pages from www.coinmarketcap.com

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Some of these projects no longer exist from five years ago.

Today is a very different picture where the projects in scale and function go well beyond the scope of most projects in the Top 25 in 2013.

In fact, just the four Chinese projects below in today’s Top 25 by market cap would have equaled 44% of the entire market capitalization of all blockchain projects in 2013.

#13 Tron — $1.4 billion

#14 NEO — $1.2 billion

#16 Binance — $1.1 billion

#19 VeChain — $719 million

With China not having a direct route to cryptocurrency markets and western institutional investors not in the Chinese blockchain space yet, these current valuations are based mostly on western individual buyers.

The next questions then are:

If China has no direct route to buy any of the projects they are currently working on, are they really even accurately valued at current prices?

Would China want their projects to be accurately valued before the Chinese had a chance to buy their own projects?

How is it possible to gauge current western institutional involvement in the Chinese blockchain space?

The impact on the value of Chinese projects when the People’s Bank of China (PBoC) has their own cryptocurrency in place.

Yesterday, it was reported “Bank of Communications (BoCom) a Chinese state-owned commerical bank has issued RMB9.3 billion (US $1.3 billion) of residential mortgage backed securities (RMBS) through its proprietary blockchain network, Jucai Chain.”

China is getting closer to issuing a Chinese sovereign cryptocurrency. That day is coming.

President XI is calling blockchain a breakthrough technology, the PBoC have filed for 41 blockchain patents this year, and China State Television say blockchain will be worth 10x more than the internet, estimated at $34 Trillion U.S. dollars.

The Digital Currency Research Lab (DCRL), the research wing of the People’s Bank of China, is the organization furiously filing blockchain patents.

From a report in November 2017, the DCRL said:

“ — it’s inevitable for the central bank to launch its own digital currency to upscale the existing circulation of the fiat currency.”

When that happens, we will see China reopen exchanges on the mainland.

But it won’t be a bitcoin to Chinese Yuan pair.

It will be a — for lack of a better term —a CryptoYuan, paired not just to bitcoin, but to most other Chinese blockchain projects as well.

Similar in function to tether pairings currently, but fully backed by the PBoC and stable in value to the Yuan.

Where Chinese can transfer CryptoYuan direct from their bank accounts to an exchange and buy projects through the direct pairing.

In essence, the Chinese government is signaling their intent of competing directly with stable coins like Tether and cutting out BTC completely as a reserve cryptocurrency, all while maintaining control of their own money supply.

By launching a CryptoYuan, controlled by the People’s Bank of China, this will align the interests of the government, banks, and people simultaneously.

It will give the Chinese government the taxing mechanism that they need through financial transaction transparency. They will not be relying on people to self report like what is currently happening in the West.

Think of it like a 1099 from a brokerage account. The person gets a copy for their records, as does the taxing authority for the Chinese government, but it’s on the blockchain and immutable.

Also, this will not be unique to the Chinese government. The West will eventually follow as taxation through transaction transparency is a driving factor for countries with record low, or negative interest rates as they all seek maximum tax revenues available.

It is the reason the Common Reporting Standard (CRS) has been adopted by most major economies in the world through the Organization for Economic Co-operation and Development (OECD) to determine which country has taxing jurisdiction over assets without relying on the owner to self report.

A Chinese sovereign currency will also give the Chinese banks a secured place in the new Chinese blockchain future. The banks will be running the nodes for the blockchain, tracking the transactions from CrpytoYuan to digital assets and back in all accounts.

Notice how you never hear so much as one Chinese banker ever say a bad word about blockchain?

Compare that to the West, where every week it seems like a different banker is on CNBC espousing his personal views on why blockchain will never work and cryptocurrencies are a terrible idea.

Not in China.

The only person that occasionally speaks is the PBoC Director and when he does, all he says about blockchain is “the blockchain belongs to the public and serves the public interest.”

And he calls bitcoin “inspiring”, saying it gives “ordinary people (the) freedom to participate.”

The PBoC sets the tone for the entire financial sector in China.

The silence from the rest of the bankers in China is deafening.

They know their government is putting the pieces in place for their entire country to participate and they will play a key role. They don’t have to say anything.

A sovereign cryptocurrency will give the Chinese people a direct link to their bank accounts to buy blockchain projects.

We will see what the final product looks like when it launches, but if it is what the government is hinting at, China will actually have a more frictionless way to buy blockchain projects and cryptocurrencies than the West.

The Western Disconnect in the Way Chinese Blockchain Projects are Viewed

Global Coin Research recently wrote a fascinating article describing the difference in mindset between Chinese market participants vs western market participants.

Market participants in China know there are bad actors and fraud to watch out for in all markets, cryptocurrencies and blockchain included.

For most western investors, blockchain and cryptocurrencies are their first taste of what an unregulated market feels like.

For individual investors in the blockchain space, we willingly accept this is the digital frontier and know there is no safety out here.

Win or lose, it is completely on us.

There is no regulatory body coming to save us. No bank to call when we send funds to the wrong address on the blockchain or lose a private key.

But for institutional investors, all of that sound terrible, and being comfortable with it completely insane.

In the last two to three years we have seen institutional money start to make forays into the western blockchain space.

But it has been completely safe expeditions.

A long only bitcoin fund.

Possibly buying tokens at steep discounts before the project launches to the public.

Buying a percentage of platforms or exchanges with known entities from previous deals in traditional markets.

Why?

Think about the makeup of the investors who are in these institutional funds. The smallest Limited Partner (LP) allowed in these funds are Accredited Investors who have $1 million liquid net worth. There are different opportunities and rules when these investors hit the $5 million and $10 million mark depending on the fund.

The average age of a millionaire in the U.S. is 59 years old, almost perfectly in the middle of the baby boomer generation in America which is the massive aging population born between 1946–1964.

Talk to most baby boomers. What do they have to say about bitcoin, let alone the blockchain or other cryptocurrency projects?

How about investing in China?

If they have an opinion, far and wide, it is mostly negative on both accounts.

This mindset is what institutional Fund Managers are up against when they bring blockchain deals to their LP’s to invest in.

Chinese markets and Cryptocurrencies combine their clients worst fears.

If the millionaire baby boomer isn’t comfortable with the deal, they won’t invest. If they don’t invest, the fund doesn’t make money.

So the fund managers have stayed with the majority of western projects and traditional type venture investing in the space so far in order to close deals and keep the funds viable.

This is the greatest strategic advantage to the individual investor currently available, but will not last forever.

Eventually the fund managers will have the right connections in China to convince their baby boomer clients to invest in Chinese blockchain deals.

Just look at Global Coin Research’s twitter followers. Venture Capitalists and Institutional Investors reading the same research individual investors are — all looking for an edge in news which is not usually translated to english.

This is not by accident.

China is the only level playing field currently for western individual investors competing at the same price point as institutional investors for projects — for now.

The Dragon Awakens

There is a lot of action currently behind the scenes in the West as institutions prepare custody solutions to allow institutional money from endowments, hedge funds, state pension funds, etc. to join us brave privateers that beat them to this New World of cryptocurrency and blockchain.

Bakkt even announced yesterday their first contracts for BTC in November will be a one to one ratio.

All this is bullish.

But the real news has not been announced yet.

China launching the first sovereign cryptocurrency in the world and reopens exchanges so their country can participate.

When that happens we’ll see how high this dragon can go with five years of pent up demand and the largest middle class in the world reentering the cryptocurrency market.

And this time, it will be with the full support of the Chinese government.

Combine that with institutional money eventually flowing into Chinese blockchain projects and we’ll see Chinese projects accurately valued for the first time since they launched.

We will also see if this is when the West wakes up to the fact they are losing the blockchain race.

Whether China launching the CryptoYuan and reopening exchanges is the 21st century Sputnik moment the West needs to spur them into action remains to be seen.

None of this is financial advice. I only know I cannot accurately value any Chinese projects until the PBoC Director lets China participate again.

See you there. — Radigan