Beijing and Shanghai’s blockchain competition

Rage Review : As China's two largest cities, Beijing and Shanghai, competition has spread to the blockchain field. Beijing companies often choose foreign venture capital instead of the token sales model, which is called an initial coin offering (ICO); other cities are now following Shanghai's lead, and Hangzhou is in the lead in the research and development of underlying distributed blockchain technology. However, it is too early to say which brand of blockchain will win.

Translation: Nicole

Beijing and Shanghai, China's most populous and developed cities, are often reminiscent of two siblings. The two cities are very similar, but each has its own unique characteristics.

Therefore, in this situation, some competition is inevitable, and currently this competition has spread to the blockchain industry.

In Beijing, visitors may encounter “Bitcoin tops” who believe blockchain or a consortium of banks can challenge the network that powers the $10 billion digital economy. In Shanghai, however, the difference in attitude is stark — there, you’re more likely to be told that Bitcoin is old fashioned.

Metaverse, a company based in Shanghai’s Huangpu District, is in many ways a representative of Shanghai’s new breed of blockchain startups.

Even though Metaverse is relatively unknown in China, with just over 20 employees at present – ​​it has been gaining momentum for a startup in the past year, recently conducting a blockchain token presale that raised more than 10 million RMB in a few weeks.

Seeing a room full of developers at work gives you the feeling that a startup is working on something big — which is exactly what CEO and co-founder Eric Gu wanted to convey in an interview. But he also spoke candidly about his personal transformation and his thoughts on the state of the blockchain industry.

Eric Gu

Gu told CoinDesk:

“I am one of the earliest Bitcoin evangelists here and one of the most watched Bitcoin columnists. This technology is revolutionary, but it is also a double-edged sword, so the revolutionary nature may also be a factor that prevents Bitcoin from becoming a mainstream asset class.”

Gu said support from local officials is most important when they come up with a project that, he said, can avoid the same mistakes that bitcoin made.

Gu explained:

“If you expect the government to support a blockchain project, it should at least be one that the government feels more comfortable with.”

This is not a fight

Meanwhile, Beijing’s urban outlook is defined by prominent startups, including bitcoin mining giant Bitmain and major exchanges like OKCoin and Huobi.

This has left each city with “very different community and industry landscapes,” argues Da Hongfei, CEO of Shanghai-based Onchain. As the creator of a “universal” blockchain platform aimed at both public and private market adoption, he acknowledges his company would be an outsider in this position.

He admitted and said:

“Beijing is a well-known Bitcoin center with a very comprehensive Bitcoin ecosystem.”

Metaverse, Onchain, and other venture-backed startups in Beijing have diverged from the usual model, raising more than $4.5 million in a public token presale while also partnering with Microsoft to contribute to the Linux-led Hyperledger project.

Beijing companies, by contrast, often opt for foreign venture capital over the token sale model, known as an initial coin offering (ICO), in which unaccredited investors back companies by buying crypto assets.

Da went on to argue that despite investor approval (and the heated debate surrounding ICOs), there is still a larger stigma associated with Bitcoin that his company has tried to avoid.

Da Hongfei

He said:

“As for blockchain technology, or DLT, for the most part, it doesn’t have that burden.”

Trend or fashion

However, it may be too early to tell which brand of blockchain will win. For example, Da believes that other cities are now following Shanghai’s lead, which is a sign that the technology is winning.

He said:

“Hangzhou is a leader in the research and development of underlying distributed blockchain technology, not necessarily the Bitcoin blockchain.”

Other companies appear to be following in their footsteps.

For example, Metaverse is using this advantage to solve problems that arise in the collectible calligraphy and painting market, where collectors have been looking for the right tools to record their transactions while also checking the artwork’s previous ownership to ensure authenticity.

On the other hand, Onchain is working with China’s large commercial bank, Everbright Bank, to build a blockchain-based reputation point system. Both projects see value in the enterprise market, especially since there is strong interest from leading domestic companies.

Da believes that blockchain can bring the greatest benefits to Chinese consumers, although he wants to emphasize that there is a larger and more important goal that can unite innovators in Shanghai and Beijing and in Bitcoin and blockchain.

Da said:

“I think people in this industry are really trying to make some progress in reinventing our outdated, if not broken, financial system.”