China cracksdown on Blockchain technology

It looks like the anonymity that Blockchain provides will no longer be a privilege enjoyed by many Chinese after a proposed legislation by Cyberspace Administration. The new regulations that were proposed and for public consultation till November 2 which will require that companies that operate with blockchain technology to provide the real names of the clients they offer services to.

Companies using blockchain in providing services in China per the new rules will demand of users to use their real names and provide national identification card numbers when registering for their services. This is meant to censor any form of information that could be a national security threat and also allow for storing of data that can be accessed and assessed by authorities. The legislations were published on Friday by Cyberspace Administration on its main website for the public to “review” until November 2, but as to when these rules will be put into action is still unknown.

Back in April an activist published an open letter which alleged the use of blockchain technology to cover-up a sexual assault/harassment at one of the leading universities in the country. The alleged sexual assault is said to have happened about twenty years ago and has been covered up on the blockchain all his while. The letter published by the activist gained the attention of Chinese social media and tech giants WeChat and Weibo. The publisher attached the letter to an Ethereum transaction to himself but since Ethereum is a public blockchain anyone on the chain could see the transaction and eventually, any data attached to it. Many are speculating that these regulations are in response to this gruesome incident perpetuated with the aid of blockchain.

A lawyer based in Beijing, Xu Kai, and a columnist wrote that the regulations failed to identify the fact that factor in Chinese rules that govern user data. In that blockchain data is immutable, and that the new rules themselves also fail to protect the rights of blockchain platforms. So, a social media platform that uses blockchain technology would allow its users post data anonymously (much like what Reddit does), and still not be autonomous to have all the data of its users at one central hub. Steemit in the U.S allows its users to gain tokens by just commenting on and discovering new content.

The closest to Reddit in the Chinese ecosystem is Matters which in itself is still within the testing phase. China has been very tight on social network freedoms and cryptocurrency circulation in the country.

The Chinese environment isn’t really the best example when it comes to regulations that allow “freedom”. Presently, there are regulations in the country which require that a person use real names for online registrations of all sorts; be they social media platforms or discussion forums whatsoever. These ones aimed at blockchain are quite similar to the pre-existing ones which were put into action after the Beijing cyber-security check last year.

The country presently has empowered public security authorities to willfully enter the premises of internet service providing companies in a bid to inspect their data and ensure their practices are according to prescribed regulations. Already, the nation has banned cryptocurrency trading within the country for almost a year now and many people see this regulation of blockchain technology is a step further meant to be the nail in the coffin for cryptos and the underlying technology that powers them – blockchain.

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