Some days ago @somebody has stated on Steemit, that "The Chinese are coming". These @somebody wrote, that 'cn' had reached the top 4 tag position on Steemit in a very short time. He gave a good overview of the recent taken milestones of the Chinese entering to Steemit - from the Chinese translation of the Steemit Whitepaper to new Chinese whale accounts like @abit (300k SP) and newly established Chinese Steemit discussion groups. Also he explained, why the Chinese like him are so fascinated by Steemit and STEEM.
In this post I want to provide some thoughts, why these 'chinalization' of Steemit is a hint for a huge future success of STEEM, the cryptocurrency, that is build into Steemit.
China is already dominating the Bitcoin market - which is a good thing
March 2015: A study by Goldman Sachs stated, that 80 percent of the global Bitcoin trading volumes comes out of China. (Source) Why? Because of the strict capital controls in China, Bitcoin is for Chinese people a solution to solve many problems. With the cryptocurrency it is possible to make anonymous transactions, bring large amounts over the border or simply prevent oneself against the inflation of the Yuan.
So, it’s no wonder, that Chinese are dominating the Bitcoin market. An impressive real time visualization could be found at Fiatleak.com:
(Source)
Another interesting visualization of the Chinese domination of the Bitcoin market was published by The New York Times:
(Source)
Another sign of the heavy weight of China in the Bitcoin market is the recent selling of the Chinese Bitcoin Mining company Canaan for 466 million US-Dollars. (Source) And besides this official company there are many other big hidden Bitcoin mines in China. Danny Vincent gave in an BBC documentary recently an impressive view behind the curtain of a huge Chinese Bitcoin mine:
(Source)
Is this Chinese domination of the Bitcoin market a good thing for the users of the cryptocurrency? Yes it is, because the Chinese a stabilizing the price of Bitcoin. In the first half of 2016, they pushed its price again over 700 US Dollars. (Source) The Wall Street Journal stated, that Chinese investors added 1 billion US Dollar to the Bitcoin market cap. (Source)
China will be dominating the STEEM market as well and will raise a new question about the nature of Steemit/STEEM
Will there be the same 'chinalization' of Steemit and the STEEM market? In my view it’s likely that the Chinese will as well dominate the STEEM market. First, there are so many Chinese at all. Second, cryptocurrencies are already well-established in China. Many Chinese have trust in them. Many of them use Bitcoin and Ether already. And they are constantly looking for good alternatives. Because of the already big market cap of STEEM they are likely to start soon investing in it heavily. And third, they also will enter the mining-by-content business. Because this is a good starting point for many talented Chinese to acquire some coins simply by providing content. The top 4 position of the ‚cn‘ tag is only an obvious sign of this trend.
The coming rising of Chinese investment in STEEM and participation on Steemit will raise an interesting question:
Is Steemit/STEEM a social news website like Reddit with an additional cryptocurrency or is it a cryptocurrency like Bitcoin with an additional social news website?
The founders of Steemit.com - @ned and @dan - stated in the Steemit Whitepaper, that their aim is to build the best social news website in the world. Maybe the Chinese are seeing Steemit - respectively STEEM - more as an aim of building the best cryptocurrency in the world.
Is this 'chinalization' a good thing for STEEM and Steemit? Yes, in my view it is, because it's stabilizing the STEEM market. And the STEEM market itself is the fundament of Steemit.
Thanks for reading. Karl (卫岚德)