It seems these days any conversation about cryptocurrencies and bitcoin with people who are new to the crypto world ends up with comparisons to the digital YUAN and other proposed digital currencies that various world governments are working on. I don’t blame them, I blame, as ever, the media. Earlier today, I received not one but two notifications on my phone from not one but two crypto news apps with headlines about the digital YUAN and on both occasions, I rolled my eyes and thought “what is this bit of news doing here?”.
People who are new to the world automatically compare bitcoin and digital currencies such as the Chinese YUAN because they think “well, they’re both only virtual, they must be comparable”, and media outlets fuel this with stories where they make it sound like these two things belong to the same conversation. They don’t.
The digital YUAN is a fully (heavily) centralised, government-issued, government-backed and government-controlled currency, bitcoin is none of those things. If you’re reading this you probably know this, and perhaps you share my frustration. And it doesn’t end there because, and I’ll do my best to leave politics out of the equation, there’s another major issue we gotta talk about: social credit.
China has a social credit system, this is a fact, which basically categorises citizens based on how well they behave. I personally think this is absolutely insane, but you’re free to develop your opinion on that. The point is, China can, and probably will, tie the digital YUAN to the social credit system, which means that they can ban citizens from purchasing goods and services based on what they say (perhaps about the government) or did. That’s never gonna happen with bitcoin. In fact, that’s exactly what bitcoin is for. You own your bitcoin, and no one can take it or corrupt it.
Sorry about the rant. Normal service will be resumed shortly.
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