The angel investor and a founder of the Meitu photo editing app, Cai Wensheng criticized the Chinese government’s carelessness toward ICOs and cryptocurrencies. He wants China to employ mining and exchange operation to its own beneficiaries.
According to the Chinese entrepreneur, Cai Wensheng around 80% of the world’s bitcoin mining hardware is from China. Already with such potential, it will be impulsive to let go the opportunities to manage its crackdowns.
“China’s surplus power [can be used] to produce surplus power to produce bitcoin, [which can be] sold to the South Koreans, Japanese and Americans” — making China “a bitcoin foreign exchange earner,” Wensheng wrote on the Chinese website The Paper”.
Cryptocurrency’s Challenges and Risks faced
Mr. Wensheng’s argument is that many of the challenges and criticisms faced by Bitcoin. Therefore, such process is inevitable in the initial stage of monetary forms. In addition, he says that volatility is an essential component of the required “development process” evolving monetary forms.
“Many of the world’s national currencies have gone through numerous periods of considerable volatility throughout history. It is claiming that political instability led to dramatic price fluctuations for many sovereign currencies prior to 1973”.
Also, he prophesied that digital currencies will reform the securities industry.
Warning over ICO Regulations
The ICOs are crowdfunding where startups sell “tokens” that represents cryptocurrencies. Typically, it can be accessed on both fiat and cryptocurrencies. Thus, he compared them to the “dotcom bubble” of the 90s. However, he stated that
“hundreds of companies” that listed Initial Public Offerings (IPOs) “in 1999” very “few companies are left,” however, “One Amazon is enough”.