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China Vs USA: Who is Winning the Blockchain Battle?

China Vs USA_ Who is Winning the Blockchain Battle_

China and the US are the superpowers of the 21st century and their respective blockchain innovations have both countries at the top of the technological leaderboard. As the two countries face off in a highly publicized trade war, many people are also looking to see which nation is winning the blockchain battle.

The blockchain jobs on offer

One way of comparing the industries is to examine the blockchain jobs on offer in each country. Right now, it looks like the US has got the upper hand. According to data compiled by The Next Web, nearly half of the related jobs on recruitment site Glassdoor globally were based in the US, followed by the Uk then India.

With the caveat that glassdoor is a US-based company despite hosting international job posts, China had just 42 positions advertised compared to the US’s 2,616.

Notably, the top three employers are IBM with 110 open positions, followed by Ernst & Young, Oracle, and Deloit– all well established corporate giants in the technology world.

Opposing government approaches

Where China may be superior, however, is its government’s commitment to promoting the development of the technology and President Xi Jinping’s open support for blockchain, calling it a ”breakthrough” technology. Following his positive comments, the state-controlled media station CCTV ran a one-hour special explaining that “the value of blockchain is 10 times that of the internet”.

The People’s Bank of China, the country’s central bank, has spearheaded blockchain testing in finance, and there is a general consensus from the experts that when it comes to core technological developments alone, China is beating the US.

China’s rapid industrialization and development as a nation since the 1980s shows just how powerful the government’s commitments have been, as well as demonstrating the benefits of a having heterogenous authoritarian leadership no matter how controversial this concept may be.

The influence of crypto

Neither country has what would be described as pro-cryptocurrency policies, but the Chinese government has taken a much harder stance. Regulations prohibit financial firms holding or trading cryptocurrencies, and while trading platforms were effectively banned in 2018.

In the US many states are also pursuing regulatory efforts to cover cryptocurrency instruments but cryptocurrency trading remains legal, as does holding initial coin offerings unlike in China.

While cryptocurrency only accounts for a percentage of blockchain use cases, the inability of start-ups to explore tokens and digital currency without fear of government intervention sets China back in terms of what blockchain development teams can work with. In mid-April last year, police in Shanghai went so far as to stop an event for cryptocurrency entrepreneurs.

There is no clear frontrunner in the blockchain race as it stands, but many pundits are focused on China’s robust development policies and quality of innovations so far despite the US’s upper hand for cryptocurrency.

 

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27.6% Tariff on Chinese Crypto Mining Rig Manufacturers Could Be a Blessing or a Curse for Miners in the USA

A trade war is underway between the United States and China, and now the biggest crypto mining rig manufacturers in the world are caught in the crossfire. Bitmain, Canaan Creative, and Ebang International are among the largest crypto mining rig manufacturers in the world and are all located in China. Crypto mining rigs have been re-classified as ‘electrical machinery apparatus’ in June 2018 after being originally classified as ‘data processing machines’, bringing them under a 27.6% United States tariff, whereas before the tariff was 0%.

These tariffs have arisen out of a growing trade war between the United States and China. On 15 June 2018, the same month mining rigs were re-classified, the United States imposed 25% tariffs on USD 50 billion of Chinese imports. China retaliated with tariffs against the United States, prompting 25% tariffs against USD 200 billion of Chinese imports, which goes into full effect on 1 January 2019 but are already at 10% as of 24 September 2018. If China retaliates again, the United States promises tariffs on an additional USD 267 billion of Chinese goods, bringing the total of Chinese imports under the new tariffs to USD 517 billion, which is essentially 100% of all Chinese imports to the United States.

It is a general rule that tariffs benefit domestic producers and the government at the expense of consumers. Indeed, crypto mining rig manufacturers in the United States will have an opportunity to capture the U.S. market, after years of being dominated by Chinese crypto rig manufacturers like Bitmain. This is where the tariffs could be a blessing since it will open up the opportunity for U.S. manufacturers to become global competitors in the crypto mining business. In general, since Bitmain has a monopoly on the global crypto mining business, it might be a good thing for U.S. crypto mining manufacturers to break that monopoly since it would increase worldwide competition and lower mining rig prices.

It will take some time for U.S. crypto mining rig manufacturers to get to the point where they can compete with Bitmain on a global scale. In the short-term, the tariffs are a curse for both the Chinese crypto mining rig manufacturers, who will lose sales, and for U.S. customers who will either choose not to buy rigs or lose most of their profits if they decide to buy rigs and pay the tariff. The crypto hash rate in the United States could decline relative to the rest of the world. Simultaneously, the loss of U.S. demand could substantially weaken Chinese crypto mining manufacturers and cause mining rig prices to increase worldwide.

This tariff curse would be lifted if U.S. mining rig manufacturers can evolve to produce rigs as cheap and efficient as Bitmain’s rigs, at which point U.S. miners will no longer be at a disadvantage, and the whole world could benefit from the global competition between Chinese and U.S. crypto mining rig manufacturers.

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