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What’s really going on in the Chinese Bitcoin community

What’s really going on in the Chinese Bitcoin community

This is a guest post co-written by Rui Ma[1]500 Startups Venture Partner for Greater China, and Jack Wang[2], co-founder of a Bitcoin startup who has developed a Bitcoin exchange and merchant tool.

Disclosure: Rui Ma owns a few bitcoins.

2013-05-17 18.31.16On a chilly November evening, on the usually neglected third floor of a popular expat hangout called the Boxing Cat Brewery, a group of geeks gathered in the name of a Bitcoin Startup Mixer to enthuse over the digital cryptocurrency known asBitcoin. As organizers, we had expected a turnout of about 40, but by 7:45 pm (45 minutes after the official start time), 96 people had arrived, standing shoulder to shoulder, resembling the Shanghai People’s Square subway exchange at rush hour.

The audience was surprisingly diverse, with perhaps one-third of attendees being expatriates and two-thirds local Chinese. A quick survey revealed that most were in their 30s, but a handful were in their 20s, and one in this 50s. The only uniformity was that 95 percent of the attendees were male – only a few females dotted the sea of bespectacled faces.

Among the 96 folks in attendance, we had the CEO or co-founders of five Bitcoin startups, including BTC China and OK Coin (the two largest China exchanges), itBit (a recently launched, venture-backed exchange based in Singapore), BTC Jam (a Bitcoin P2P lending site started in Brazil), and a representative of the Bitcoin Foundation.

However, these people are already well-known, and there are already numerous stories that broadly describe the Bitcoin community in China. We wanted to talk to real local investors and enthusiasts who are driving the Bitcoin market in China into the spotlight. Luckily for us this past Monday evening, some of the most notable members of the local Chinese Bitcoin community were also in attendance, many of whom are clustered around the Jiangzhehu (Shanghai and the bordering Zhejiang and Jiangsuprovinces) region. They included some of the earliest and most hardcore adopters of Bitcoin in China, many of whom are worshipped on local forums and information sites such as btc123 or 8btc by more recent fans of the currency.

Who’s who of China’s Bitcoin community

Li Xiaolai Mug ShotFor those who are unfamiliar with the Bitcoin community in China, first things first. The most influential advocate of Bitcoin in China is Xiaolai Li (pictured right), a former teacher at New Oriental (NYSE: EDU), the most famous English-language institute in China and publicly listed with a multi-billion dollar market capitalization. Xiaolai was an active investor in educational enterprises before becoming a serious Bitcoin advocate and entrepreneur in 2011. Rarely without his cigarettes, he can be often found in one of the geeky hangouts in Beijing’s high-tech cluster,Zhongguancun, where he is working on more than a few Bitcoin-related projects of his own.

While Xiaolai believes in the long-term viability of Bitcoin as a currency, he is also practical. He notes that most Chinese Bitcoin investors are opportunistic businessmen, drawn in by the prospect of sharp, short-term investment gains. They lack knowledge, or simply may not even care about, the fundamental characteristics or ideals of Bitcoin. In his latest post on the popular Bitcointalk forums, he warns heavily against those who are trying to trade quickly in and out of Bitcoin to take advantage of the volatility in price, staying consistent with his long-held views that buying and holding Bitcoins is the only path to long-term wealth and value.


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This entry was posted on November 28, 2013 by and tagged .

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