It is gratifying that the Chinese government's top leaders' understanding of Bitcoin is improving year by year

Chapter 0 Introduction

Yesterday, Bitcoin became popular again in China. One of CCTV's most watched programs, Focus Interview, aired "The Secrets of Bitcoin Network Fraud and Money Laundering". It included comments on Bitcoin by the former president of the Bank of China.

This article reviews what several government heavyweights have said about Bitcoin.

Chapter 1: In 2014, Central Bank Governor Zhou Xiaochuan defined Bitcoin as a commodity

When Zhou Xiaochuan was asked by a reporter at the Boao Forum on April 11, 2014, whether the central bank would ban Bitcoin, he gave the following answer:

Bitcoin is more like an asset that can be traded, not a payment currency. So, it is not like, for example, in the past, people collected stamps, which had prices written on them, but they were mainly collectibles and traded as assets, not payment currencies. So it should be said that it does not fall into the category of whether we should ban it or not.

This was three years ago, and it represented the highest level of understanding of Bitcoin by the Chinese government's top leaders. Zhou Xiaochuan defined Bitcoin as an "asset" and expressed that the central bank did not have the option of banning Bitcoin.

In 2014, Chinese public opinion still mainly defined Bitcoin as a scam (in fact, most ordinary people still regard Bitcoin as a negative thing), and a large number of Weibo celebrities, experts, and well-known people all defined Bitcoin as something "without intrinsic value". In such a context, it is not surprising that reporters would raise the question of "whether the central bank will ban Bitcoin" at such an important event. But Zhou Xiaochuan was still able to identify it as an "asset" and a "commodity" in such a big environment, at least denying the social view that it is a scam, a thing without value, etc.

Chapter 2: 2016: Director of the People’s Bank of China studies the political and economic status of Bitcoin

Sheng Songcheng, director of the Survey and Statistics Department of the People's Bank of China, published an article in June 2016 - "Sheng Songcheng of the Central Bank: Virtual Currency is Not Currency in Essence" - in which he argued at length that virtual currencies such as Bitcoin are not currencies.

Sheng Zaiwen's theme is:

Judging from the essential characteristics of currency and its development history, virtual currencies represented by Bitcoin are not currencies in essence and it is difficult for them to become currencies.

Sheng's article was published against the backdrop of the central bank's plan to issue digital currency. The article analyzes the central bank's digital currency from an economic and political perspective and concludes that the central bank's digital currency is superior to Bitcoin. It must be said that the article only denies Bitcoin's currency status, but does not demonize Bitcoin. This is a change from the speeches of senior government officials on Bitcoin, which more or less mention the risks of Bitcoin, Bitcoin being used as a tool for evil, etc., but Sheng's article does not mention these.

Sheng’s post represents a sign that senior government officials are beginning to pay more attention to the economic and political influence of Bitcoin.

However, Sheng's article is full of logical errors. I once wrote an article that refuted Sheng's article word by word. There is a link at the end of this article.

Chapter 3 August 2016: Deputy Governor of the People’s Bank of China studies technical details of Bitcoin

In August 2016, Fan Yifei, deputy governor of the People's Bank of China, published an article titled "Fan Yifei: Theoretical Basis and Architectural Choices for China's Legal Digital Currency" which outlined the central bank's version of the digital currency.

This article is the first time that a large number of technical concepts of Bitcoin and other digital currencies have appeared in an article by a senior Chinese government official, such as private key, decentralization, blockchain, public chain... After reading this article, I think it represents the results of the central bank's extensive research on technical details of Bitcoin, etc. It shows the government's determination on the central bank's digital currency.

Well, if you say the central bank’s currency is strong, then it is strong. At least you didn’t say anything negative about Bitcoin, which is progress.

In response to Fan’s article, I also made some inferences about the currency that the central bank is going to issue, which is linked at the end of this article.

Chapter 4: In 2017, the former president of the Bank of China realized the decentralized nature of Bitcoin

On February 14, 2017, Li Lihui, member of the Financial and Economic Committee of the National People's Congress and former president of the Bank of China, was a guest on CCTV's top three program, Focus Interview, and expressed the following views on Bitcoin:

“Bitcoin is built on a borderless platform. It is impossible to destroy Bitcoin, so it will still exist. The important thing is that we must control it and manage it.”

The entire episode of Focus Interview revolved around an online fraud case, where several criminals used stolen QQ accounts to defraud a company of 12 million RMB, and then laundered 5 million of it through Bitcoin. The program mainly brought up the supervision of Bitcoin exchanges.

The program is relatively simple, it is a fraud case, Bitcoin is used as a money laundering tool. Bitcoin is used by bad people, which is not Bitcoin's fault. However, this kind of value judgment is not the theme of this article, everyone can make their own judgment.

Li Lihui understood the essence of Bitcoin, which is decentralization. This means that the government has a high level of understanding of the essence of Bitcoin. You cannot "destroy" a successful decentralized product. The "borderless platform" that Li mentioned refers to the Internet. Bitcoin relies on the Internet to exist. Unless the Internet is eliminated, Bitcoin cannot be "destroyed."

Li also proposed a certain feasibility for the regulation of Bitcoin. The subject of regulation cannot be Bitcoin. Bitcoin itself is a technology that cannot be regulated. What can be regulated are commercial companies based on Bitcoin, such as exchanges.

Chapter 5 People's Daily's Description of Bitcoin Over the Years

I wrote an article on October 18, 2015, reading all the articles about Bitcoin published on People's Daily Online and summarizing People's Daily Online's attitude towards Bitcoin.

As an official media, People's Daily describes Bitcoin in roughly the following manner.

1. In the first half of 2013, some people either hinted or stated directly that Bitcoin was a game of passing the parcel, and there was a strong negative and contemptuous attitude towards it.

2. In the second half of 2013, as the price of Bitcoin skyrocketed, the People's Daily began to strongly warn against the risks of Bitcoin investment, emphasizing that Bitcoin has not been endorsed by the government and strongly resisting it.

3. Throughout 2014, following the Mt. Gox incident, the price risk of Bitcoin was emphasized, and its technical characteristics were denied, with a strong attitude of contempt.

4. In the first half of 2015, when Bitcoin entered a downturn, the People's Daily took a sarcastic stance.

5. At the end of 2015, the United States began to promote Bitcoin in a high-profile manner and began to make substantial arrangements for regulatory affairs. The People's Daily began to call for official regulation. People began to be wary of Bitcoin and frequently warned the government of financial risks.

It only took the People's Daily two years to go from ignoring you at the beginning, to mocking you, and then to being wary of you. That's quite a lot of progress.

There are links to articles at the end of this article.

Chapter 6: Senior government officials have made some progress in understanding Bitcoin

In 2014, the central bank governor said:

It’s not a question of whether or not we have banned anything.

In 2017, the former president of the Bank of China said:

Bitcoin cannot be destroyed.

This is the progress in the understanding of Bitcoin. In 2014, it was said that there was no ban, and in 2017, it was said that even if you wanted to ban it, you would not be able to do so. This is because the Chinese government’s top leaders have a high level of understanding of the decentralized nature of Bitcoin.

In 2016, the central bank played two trump cards because it wanted to vigorously promote its version of digital currency.

Sheng verified from the perspective of politics and economics why the central bank’s digital currency is superior to Bitcoin. The central bank has begun to study the economic attributes and political status of digital currencies such as Bitcoin. This is at least the result of the Chinese government’s top leaders beginning to pay a lot of attention to the influence of Bitcoin.

Fan tends to analyze technically why the central bank's digital currency is stronger than Bitcoin. This article represents the Chinese government's high-level understanding of the technical characteristics of Bitcoin , and a large number of technical details such as private keys and private keys are mentioned.

Compared with the People's Daily's ridicule of Bitcoin from 2013 to 2015, these central bank and People's Bank of China officials do have a higher understanding of Bitcoin.

Chapter 7 Conclusion

These are the results of the strong price increase of Bitcoin in the past 8 years, which has forced the central bank to pay attention. Brothers and sisters, you should also understand Bitcoin.

A series of articles on the attitude of Chinese government leaders towards Bitcoin:

What kind of digital currency will the People's Bank of China issue? - Reasoning after reading "Fan Yifei: Theoretical Basis and Architecture Choice of China's Legal Digital Currency"

"Bitcoin is a better currency than credit currency - refuting the article "Central Bank Sheng Songcheng: Bitcoin and other virtual currencies are not currencies in essence""

"People's Daily's Comments on Bitcoin in Recent Years" http://www.8btc.com/tan90d23

Bitcoin cannot be de-Sinicized