China has further banned cryptocurrencies, and the Hong Kong regime has also announced that it will restrict crypto exchanges to professional investors only such that services cannot be offered to retail investors.

China is very uncomfortable with cryptocurrencies, and has always been very vocal about it, as the nature of cryptocurrencies is very contrary to the principles of operation of the Chinese regime, making it very agitated. Very often, some people compare China to other countries as though they were apples to apples, and ask “Why can’t China do what the US does?” and so forth, which are ridiculous arguments that anyone with sound common sense would know.

The truth is that in China, centralization of state power is practiced, and the extent of concentration of power is one of the most exceptional in the world. As the Chinese Communist Party (CCP) officials keep saying, in Hong Kong affairs, the so-called residual power that is neither clearly stated nor clearly defined must be returned to the Central Government. This kind of mindset is completely different from the federal system in the US, Germany, etc.

It is like a hundred and some years ago, there was the Austro-Hungarian Empire or the Dual Monarchy in Central Europe, the Ottoman Empire in the Middle East, Eastern Europe and North Africa, and the Qing Empire in East Asia. At first glance, they were all empires, but structurally, the power of the Qing Empire was much more centralized than the other empires, reaching down to the prefectural level.

That is to say, China and other countries are often not comparable as nations. It can even be said that at a time when the whole world is in a modern state, China is not a modern country at all, but rather a “fake modern state” stuck in the highly authoritative ancient times.

A high degree of centralization means that except for the ruling class, no one else is allowed to participate in governance, and no one is allowed to manage themselves because the more you manage yourself, the less control they have over you. A group’s ability to take care of itself is its organizational power, therefore organizations with relatively strong self-management capacity will be broken into pieces, be it a religious organization such as a Catholic church, Falun Gong, or a business entity such as Tencent and Alibaba.

In a highly authoritarian world, the organizational power of the people is the same as a tumor. If there is a tumor, or a potential tumor, it must be eliminated to avoid future problems. In that case, if you say no organization, then so be it. It is not as though it would cause death by starvation (although the number of people starved to death under the CCP rule is in fact the highest in the history of mankind). So indeed there are people who will stand by the Central Government, as long as their servile nature is strong enough, or they are used to being disjointed.

The fundamental layer of cryptocurrency is blockchain technology. From one perspective, blockchain is useful in allowing a group of individuals to be efficiently organized in a way where there is no centralized platform, but at the same time not easily broken up by any single external force.

As soon as you hear this, you know that it is not compatible with a high degree of centralization. In the early days of the internet, people envisioned that it would weaken dictatorships, but in the end, it turned out that dictatorships with electronic technology are even more powerful. In recent years, the emergence of blockchain has brought back a new ray of hope. This is because cryptocurrency is only one of the applications of blockchain, that is, the issuance and management of currency is only a part of what the group can do independently.

The more centralized a regime is, the more it is threatened by blockchains, so it is only natural that China would do its utmost to suppress them. By the same token, groups that are threatened by totalitarianism, such as Hong Kong, which is rapidly being fragmented by the CCP, are in greater need of the role that blockchain can play, and with greater urgency.

The question is how to use the blockchain to the fullest. Last year, my friend Kin Ko published “The Sociology of Blockchain,” which foretold the various applications of blockchain. However, no matter how knowledgeable one is on the sidelines, nothing is more practical than playing in the field. The most practical first step is to own cryptocurrencies, which is why Kin Ko has been giving out Ethereum (ETH) to readers. The amount need not be large, but there must be plenty of people. With more people taking this step, more people will enter the world of blockchain, and the possibilities will be much higher.

(Greg Sung, co-founder and CEO of OneSky, and founder of aNobii, an online community for book lovers)

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