Why has bitcoin had success in China?

[Amanda2015]

One of the reasons bitcoin has been relatively successful in China is that the Chinese already have experience of using virtual currency, such as Q coins, which were introduced in 2002.

Q coins are issued by Tencent QQ – an instant messaging software service company with more than 800 million active users that offers a variety of services, such as online social games, music, shopping and microblogging.

From my experience, when asking Chinese people for their email address, around four out of 10 have an address on the QQ server.

Q coins can be purchased via a bank, telephone or Q card at an official price of 1 yuan per coin, and can be used for purchasing Tencent services, such as electronic greeting cards and online games.

On top of this existing exposure to virtual currency is the fact that bitcoin gives an opportunity for people to move money out of China and transact with international merchants/customers. This is important as there is currently a 350,000 yuan (around $50,000) limit on overseas investment.

Chinese exchange platforms, such as OKCoin, BTCC and Huobi, allow trading without charging a fee, thus, using bitcoin is faster and cheaper compared to traditional money transfer methods, such as Western Union.

This is important for the millions of Chinese who study and work abroad.

Zennon Kapron, financial technology expert and owner of the Shanghai-based consultancy Kapronasia, told CoinDesk that China's main experimentation in the bitcoin space is in trading and the manufacture and operation of mining equipment. He argues that, with this being the focus, bitcoin is unlikely to cause a financial revolution in China.

According to Kapron, to work in China, bitcoin has to become accessible and useful for the masses in daily transactions. This might be challenging. Merchant fees in China are lower than in the West and platforms such as Alipay and WeChat/Tenpay dominate the mobile and non-bank payment market.

While this might be true for the mainland, in greater China, and Taiwan, in particular, bitcoin seems to have a really kicked off.

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[7788bitcoin]

How do you define "success"? I think only a very very small percentage of Chinese is using bitcoin. Not many merchants in China accept bitcoins. It is still far from "success" IMO.

[NorrisK]

I think it is more likely related to the chinese gambling mentality. They don't mind as much to take a risk to earn massive amounts of money, even if this involves a new technology that they (might) not fully understand.

This will speed up adoption, as they are not so reluctant and scared of potential losses.

[KenChanYu]

Yes, bitcoin is starting to take off in Taiwan and majority in asian hands. Coins like Gulden will be for Europe in the future. Litecoin is also dominated by asian market.

[Amph]

if it is related to mining then it is because they have big place with cheap electricity, and since, again, they are too many, you see it more, versus other countries

i would imagine that if china were only 50-100M, they would not control 60% of the network

[Outlander]

How could you bring up the Q coins? How could it be used to compare with Bitcoin? Q -coin is company coins and centralized! Ten cent can issue as many Q coins as he likes! Q-coins are deeply embedded with its provided service, which is the reasons of the success!
Op just focuses on the benefits Bitcoin could possibly bring to China! It doesn't mean the success in China!

[ereborltc]

if it is related to mining then it is because they have big place with cheap electricity, and since, again, they are too many, you see it more, versus other countries

i would imagine that if china were only 50-100M, they would not control 60% of the network

I don't think so. Chinese ppl will find a way to solve it! They have a strong desire to make profit! They have a strong mining, exchange and ASIC manufacturer industry!

[n2004al]

I think it is more likely related to the chinese gambling mentality. They don't mind as much to take a risk to earn massive amounts of money, even if this involves a new technology that they (might) not fully understand.

This will speed up adoption, as they are not so reluctant and scared of potential losses.

That's correct according to me. The success it is more because of gambling mentality of the Chinese people. This gambling mentality make them mining without thinking to much about the risks which bring this behavior. Then the mining bring money and make them more interested to go ahead.

The words go from one to one and then everyone begin to mine seeing the others. The results: The Chinese are the first mining people in the world and the bitcoin is used to much from them.

[Smokeasy]

One of the reasons bitcoin has been relatively successful in China is that the Chinese already have experience of using virtual currency, such as Q coins, which were introduced in 2002.

Q coins are issued by Tencent QQ – an instant messaging software service company with more than 800 million active users that offers a variety of services, such as online social games, music, shopping and microblogging.

From my experience, when asking Chinese people for their email address, around four out of 10 have an address on the QQ server.

Q coins can be purchased via a bank, telephone or Q card at an official price of 1 yuan per coin, and can be used for purchasing Tencent services, such as electronic greeting cards and online games.

On top of this existing exposure to virtual currency is the fact that bitcoin gives an opportunity for people to move money out of China and transact with international merchants/customers. This is important as there is currently a 350,000 yuan (around $50,000) limit on overseas investment.

Chinese exchange platforms, such as OKCoin, BTCC and Huobi, allow trading without charging a fee, thus, using bitcoin is faster and cheaper compared to traditional money transfer methods, such as Western Union.

This is important for the millions of Chinese who study and work abroad.

Zennon Kapron, financial technology expert and owner of the Shanghai-based consultancy Kapronasia, told CoinDesk that China's main experimentation in the bitcoin space is in trading and the manufacture and operation of mining equipment. He argues that, with this being the focus, bitcoin is unlikely to cause a financial revolution in China.

According to Kapron, to work in China, bitcoin has to become accessible and useful for the masses in daily transactions. This might be challenging. Merchant fees in China are lower than in the West and platforms such as Alipay and WeChat/Tenpay dominate the mobile and non-bank payment market.

While this might be true for the mainland, in greater China, and Taiwan, in particular, bitcoin seems to have a really kicked off.

Not trying to stereotype, but Bitcoins are backed by hard math which some peope appreciate more than others.

[ranochigo]

Since it is issued by a central company, I doubt the chinese were more familar to Bitcoin due to that. Bitcoin is a completely different thing as it is secured by cryptography and nothing else. However, China Telecom and Baidu both started accepting Bitcoin shortly before the rise. This could have resulted in the chinese having more confidence about the legitimacy of Bitcoin.

Also, the cheap land space and electricity could have aroused the interest of those who are moneyminded and started mining.

[randy8777]

it's purely that china has very cheap power rates and the fact that chines people like to go big when investing in something. the only downside to a lot chinese investors is that they are very short term minded.

[Mickeyb]

It's very simple. Getting money out of the country and screwing their capital controls was one convenience. Their gambling mentality and speculating has added to their interest in Bitcoin. Cheap electricity and cheap mining productions have worked for them very well.

Their sheer size in population is also very important. In the percentage of population I think there are no more users in China then in the rest of the world. But when you take this same percentage of users and you multiply it by 1.5 billion people, you actually get many more users.

[medUSA]

<snip>
bitcoin gives an opportunity for people to move money out of China and transact with international merchants/customers. This is important as there is currently a 350,000 yuan (around $50,000) limit on overseas investment.

This is the main reason. The ability to move money out of China unregulated is "priceless". I believe millions of blackmarket money have already moved out of China this way. It is also precisely this reason Chinese government wants to ban/hinder bitcoin in China.

[avatar_kiyoshi]

Although in China still "Restricted" about legality of Bitcoin, but China is dominate bitcoin mining pool: https://blockchain.info/pools

They have a pretty much bitcoin exchanger too. they have strong faith to bitcoin.

[sekaiissobig]

I don't think so,
It is more likely that the mindset is influenced by Q coin but
the reality is the original mindset of majority of chinese, which want to gain profit in short time,
while the electricty supply is quite cheap, so chinese can invest their little money in mining,
with lots of bitcoin in market, there are many more chinese wants to enter this empty market.

[Miss Fortune]

One of the reasons bitcoin has been relatively successful in China is that the Chinese already have experience of using virtual currency, such as Q coins, which were introduced in 2002.

Q coins are issued by Tencent QQ – an instant messaging software service company with more than 800 million active users that offers a variety of services, such as online social games, music, shopping and microblogging.

From my experience, when asking Chinese people for their email address, around four out of 10 have an address on the QQ server.

Q coins can be purchased via a bank, telephone or Q card at an official price of 1 yuan per coin, and can be used for purchasing Tencent services, such as electronic greeting cards and online games.

On top of this existing exposure to virtual currency is the fact that bitcoin gives an opportunity for people to move money out of China and transact with international merchants/customers. This is important as there is currently a 350,000 yuan (around $50,000) limit on overseas investment.

Chinese exchange platforms, such as OKCoin, BTCC and Huobi, allow trading without charging a fee, thus, using bitcoin is faster and cheaper compared to traditional money transfer methods, such as Western Union.

This is important for the millions of Chinese who study and work abroad.

Zennon Kapron, financial technology expert and owner of the Shanghai-based consultancy Kapronasia, told CoinDesk that China's main experimentation in the bitcoin space is in trading and the manufacture and operation of mining equipment. He argues that, with this being the focus, bitcoin is unlikely to cause a financial revolution in China.

According to Kapron, to work in China, bitcoin has to become accessible and useful for the masses in daily transactions. This might be challenging. Merchant fees in China are lower than in the West and platforms such as Alipay and WeChat/Tenpay dominate the mobile and non-bank payment market.

While this might be true for the mainland, in greater China, and Taiwan, in particular, bitcoin seems to have a really kicked off.

Maybe because Chinese are very optimistic people and really believe in bitcoin.
Which is a good thing.

[neonshium]

The recent economic slow down in China, made people to look for alternate investments for their saving. When people simply switch over from their currency into another usually people go for gold, but now we have digital version of gold.

[manselr]

There's a big difference from mining to actual usage. Sure, China is king of mining Bitcoins for some reason, probably has to do with the fact they saw profit to be made due their cheaper electricity bills, and sure there's probably something more too hidden from us, such as the goverment seeing the millionaire value this thing may have in the future therefore stacking on it by promoting miners and supplying them with resources. In any case, actual usage is mostly by geeks and in-the-know early adopters like us too. We are too soon in the game yet to expect widespread usage anywhere.

[Luqman]

How do you define "success"? I think only a very very small percentage of Chinese is using bitcoin. Not many merchants in China accept bitcoins. It is still far from "success" IMO.

Agreed, nice thought..

[Amph]

if it is related to mining then it is because they have big place with cheap electricity, and since, again, they are too many, you see it more, versus other countries

i would imagine that if china were only 50-100M, they would not control 60% of the network

I don't think so. Chinese ppl will find a way to solve it! They have a strong desire to make profit! They have a strong mining, exchange and ASIC manufacturer industry!

it's all about number, there are other good place in america where you can have 0.05 electricity, but despite this no one is going mining, because they can't build their asic like chinese can do