Bitcoin scaling dilemma: The communication gap between China and the rest of the world is a major factor

Editor's note: Communication between Chinese and foreign communities is very important. Virgilio mentioned in the interview that "there is a huge disconnect between Chinese and foreign communities", which was confirmed by the recent news that the People's Bank of China interviewed the main leaders of Chinese exchanges, which was distorted by some foreign media as China "banning" Bitcoin. Regarding the incident of the central bank interviewing domestic exchanges, 8btc.com was the first to report and interpret the incident in English even before the English version of China Daily. In this incident, it was at the forefront of the global English media and eliminated the "communication gap" in a timely manner.

In this interview, Virgilio Lizardo Jr., Vice President of International Affairs at Bitbank Group, talked about the Chinese Bitcoin mining business and the communication problems that exist between China and other countries.

Virgilio has been a cryptocurrency believer since 2013. He completed an introductory cryptocurrency course at the University of Nicosia and became a certified Bitcoin professional through the Cryptocurrency Certification Association.

Virgilio was born in the Dominican Republic and grew up in Panama, USA, but he has lived in China for nine years. In addition, the company he works for, Bitbank Group, covers all aspects of the Bitcoin ecosystem, including exchanges, mining, digital wallets, and financial services. BW.com is one of the largest mining pools in the world and a subsidiary of Bitbank Group. With his experience in China and the Bitcoin circle, Virgilio is the right person to talk about Bitcoin mining in China. The following is an interview with Virglilio by Babbitt International Station.

8btc – How would you describe the current state of Bitcoin mining development in China?

China’s Bitcoin mining industry has become a fiercely competitive landscape. Players from all over the world come to China in search of the lowest power and most efficient hardware. China also has a large community of tech-savvy entrepreneurs and is close to large power facilities suitable for mining. You can often see Chinese companies doing various roadshows to promote their hardware or software. This is part of an exciting, fast-paced and cutting-edge industry.

8btc – Compared to the rest of the world – with mining emerging in India and the US and scattered across other countries – do you think China’s dominance of Bitcoin mining will be threatened in the coming years?

I am very happy to hear about the development of Bitcoin mining in other places, but I don't think they will be a competitor to China anytime soon. Many people come to China for abundant and cheap electricity and reasonably priced hardware, which China has. China has a combination of cheap labor, infrastructure and experience that will be very difficult for other countries to surpass.

8btc – Do you think the trend of Bitcoin mining will change in the next few years?

Because Bitcoin mining technology is advancing so rapidly, I think the next evolution of mining will come in the next few years. I often call this the "mining farm" era of Bitcoin. We've gone from laptop mining, to GPU mining, to ASIC mining. In my opinion, the future of mining will be centered around small, diverse devices that can process Bitcoin transactions. But exactly when that will happen remains to be seen.

8btc — Do you think the Bitcoin halving will have any significant impact on the entire Bitcoin ecosystem?

People always ask, if the reward is halved, how can miners make money? The good thing about Bitcoin is that its core function is predictable. Everyone in the Bitcoin ecosystem knew in advance that Bitcoin would halve every four years. Therefore, everyone was very careful to plan accordingly. 2014 to early 2015 was a difficult period for Bitcoin, and the price of Bitcoin was in a bear market. In China, it was called the "Bitcoin Winter". During that period, many companies and people in the cryptocurrency circle disappeared. If you still stick after that, then you are a true believer and you have a strong business model from the beginning.

8btc — Recently, blockchain has made interesting progress in several economic sectors in China. As China is the region with the highest concentration of Bitcoin-related activities, what do you think of these developments?

Awareness of Bitcoin and blockchain technology has increased significantly this year. Starting with the People’s Bank of China’s February announcement, CCTV’s aggressive coverage in May, almost weekly conferences, educational events around the country, and more interest in blockchain from national and local governments.

China is definitely a global hotspot for blockchain activity. I hope to see some tangible product, technology, initiative, and regulatory developments from all this attention.

8btc – Can you comment on Segwit/block size expansion? If so, can you share your thoughts from a mining perspective?

We recently visited Bitcoin Unlimited and the Blockstream/Bitcoin Core team, and both of these teams have held events in China to have public discussions about their proposals. I would like to see more of this outreach. I think the main problem with our current situation is that there is a deep communication gap between China and the rest of the world. This is not limited to Bitcoin. But since China is a big player in the industry, this is a very bad situation. This is why I am very happy to see 8btc introduce an English site. This will really help to bridge this gap.

Another aspect is that most of Bitcoin's technical materials are written in English, so the Chinese community needs time to translate and analyze it. Currently, the number of people who can do this is very limited. I believe that community members are still reviewing proposals on technical aspects and discussing how to move forward. As in other parts of the world, everyone in the Chinese community has different opinions, and discussions in the Chinese community are still mainly conducted on the popular Babbitt forum.

8btc - Is the current Bitcoin mining landscape what you thought it would be? Or is it different from what you thought it would be - price, confirmation times, adoption levels, etc.? If so, what and why?

I’ve heard it said that if mining becomes the hottest topic in bitcoin discussion, then it’s a sign of trouble, so I’m surprised by the current climate: the fact that the block size debate has reached a point where every move and announcement by miners is being put under a microscope.

Another interesting aspect is being able to see the development of the mining industry in terms of miner manufacturing. Many manufacturers have disappeared in the past two years, and there are many stories of heartbreak and loss. Mining equipment production is a very complex process involving chip design, supply chain management, negotiations, and extreme time pressure. It is a big feat to complete such a process.

8btc —Personally, what do you think most of us don’t realize or pay close attention to?

I have lived in China for nine years and I learned about Bitcoin four years ago. My passion for Bitcoin has grown through the lens of China’s development and I am lucky to experience Bitcoin from this unique perspective. What I can see is a huge disconnect between people’s impression of the reality of Bitcoin in China and the speed at which false narratives about China are spread. For example, foreign media have made various false reports, such as “China bans Bitcoin, China does not ban Bitcoin” or “China’s capital outflows fuel Bitcoin price increases” or “China’s miners’ monopoly will encroach on Bitcoin”, which were popular in the past.

There are many reasons for this disconnect, including strong Internet firewalls, language, culture, distance, history, etc. In this environment, few people can build bridges. So my advice to Bitcoiners who are interested in understanding what is happening in China is to work on the news sources. Go to 8btc, go to WeChat and communicate with each other. Where there are big challenges, there are big opportunities. This may not be easy to do, but when you do it, you will understand not only the development of Bitcoin in China, but also Bitcoin itself.