The Chinese cryptocurrency market stands as a vibrant ecosystem, pulsating with innovation and potential. In this rapidly evolving landscape, a multitude of projects have emerged, showcasing the prowess of Chinese developers and entrepreneurs.
From what we’ve seen, these projects not only contribute to the growth of the global blockchain industry but also demonstrate China's prominent position in the realm of digital assets.
In this article, we’ll delve into the world of Chinese crypto projects — shedding light on their significance and impact on the wider crypto market. Keep reading if you want to learn about promising projects that are worth your consideration.
Key Characteristics of Chinese Crypto Projects
In our experience, Chinese crypto projects exhibit a few distinct characteristics that set them apart from their counterparts. These include:
Emphasis on Blockchain Technology
At the heart of Chinese crypto projects lies an unwavering emphasis on blockchain technology. These projects harness the immense potential of distributed ledgers to revolutionize various industries.
Earlier this year, we also received a report that China is establishing a blockchain research center in Beijing. The aim of this research center will be to develop day-to-day life uses of blockchain tech, which is a net positive for the crypto community worldwide.
Strong Government Support and Regulatory Framework
This might sound a bit odd since China banned crypto in its entirety in late 2021. However, this ban was extremely difficult to enforce in the first place and things are looking up again.
The blockchain research center we mentioned in the previous point is proof enough. But in addition to that, a licensing framework for Virtual Asset Service Providers (basically crypto exchanges) is also in the works in Hong Kong.
We’ve also seen a few experts predict that China will ease up the restrictions on crypto in the near future.
Focus on Scalability and Efficiency
After years in the crypto market, Chinese crypto projects still stand out to us for their pursuit of scalability and efficiency.
With a vast user base and a rapidly growing economy, these projects are designed to handle high transaction volumes and provide seamless user experiences.
In the Chinese crypto ecosystem, community involvement is paramount. We’ve seen many of these projects foster vibrant communities where enthusiasts, developers, and investors collaborate, exchange ideas, and contribute to the project's growth.
These projects also encourage active participation through incentivized programs, governance models, and community-driven decision-making processes.
Top 5 Chinese Crypto Projects
Project 1: Conflux
At first glance, Conflux is a Layer 1 blockchain network. It was created in 2018 by a group of engineers and researchers from three different universities: the University of Waterloo, the University of Toronto, and the Institute of Computing Technology China.
The feature that drew us to this project is that it operates on a hybrid Proof of Work and Proof of Stake model. The underlying Tree-Graph consensus algorithm is also designed for fast output with as little latency as possible.
The combination of these two factors allows the Conflux network to process transactions at an exceptionally fast speed. Plus, this blockchain also has support for smart contracts.
Given its innovative approach to blockchain networks, Conflux has already secured funding from many prominent institutions like Huobi, Sequoia Capital, and even the Shanghai government. Speaking of funding, the coin behind this project — CFX — has also seen a massive uptick in value in the last few months.
Project 2: Neo
Launched in 2014, Neo is one of the oldest projects on our list. Dubbed the “Chinese Ethereum,” Neo is a public blockchain that supports the development of everything from dApps to digital asset transfer platforms.
That said, limiting Neo to an Ethereum alternative would be underselling its capabilities. There are quite a few unique features of Neo that we rarely see elsewhere. The most notable among these is the use of a consensus mechanism called the Delegated Byzantine Fault Tolerance (dBFT).
Technicalities aside, this mechanism improves both the performance and security of the Neo network. Other than that, Neo also has complete support for languages like Python, C#, and Java to allow easier development.
Even if you’re not interested in the inner workings of a blockchain network, you should still keep an eye on the NEO token that governs this project. Due to the easing regulation in China, we’re starting to see an increase in its value over the past few months.
Project 3: VeChain
The VeChain project entered the crypto market back in 2015. Its main goal is to provide a better way of managing supply chains. When implemented correctly, VeChain can improve the tracking of goods from the manufacturer, all the way to the end consumer
In concrete terms, VeChain is a Layer 1 blockchain network and smart contract ecosystem similar to Conflux. To summarize, VeChain can add a layer of authenticity to supply chains by storing unique product IDs on the blockchain where they cannot be tampered with.
This gives VeChain a practical, and easy-to-understand use. It has also resulted in this blockchain getting several notable partnerships including Walmart China, H&M, and even some sectors of the Chinese government.
But, from what we can see, this is only the beginning of what’s possible with this unique project. There are already plans in motion to expand this tech to the agriculture and automotive industries.
Project 4: Filecoin
Technically speaking, Filecoin by Protocol Labs was not founded in China. However, we still consider it a Chinese project given its immense popularity in China for both users and miners.
With that said, it is another highly practical crypto project that brings real-world benefits to its user base. In essence, Filecoin is a peer-to-peer cloud storage solution that utilizes blockchain tech to store encrypted data in a decentralized manner.
Among the projects we’re discussing on this list, Filecoin also has one of the most exciting updates on the horizon. The Filecoin Virtual Machine (FVM) is set to bring smart contracts into the mix — turning Filecoin into a complete Layer 1 network.
Admittedly, FIL, the underlying coin of this network is in a rough spot at the time of writing. However, keeping the upcoming developments in mind, we expect to see a noticeable increase in its valuation — making it a variable investment opportunity.
Project 5: Alchemy Pay
With a Chinese technology executive co-founder, Molly Zheng, Alchemy Pay aims to make crypto payments more convenient. It achieves this by allowing businesses across the world to accept crypto assets as valid forms of payment without any issues.
Ever since its launch in 2018, Alchemy Pay has become one of the most successful crypto projects on our list.
Its current partners include some of the largest crypto exchanges such as Binance and Polygon. Not only that, but Alchemy Pay also works with global e-commerce platforms like Visa and Shopify. Not to mention its integration with the popular Japanese social media app, LINE — demonstrates its expanding reach in the global market.
Impact of Chinese Crypto Projects on the Global Crypto Market
Over the years, we’ve seen Chinese crypto projects gain significant traction in the crypto sphere. Here’s the impact they’ve had on different facets of this global market:
Influence on market trends and prices
Chinese crypto projects have emerged as key drivers of market trends and prices. With their innovative technologies and ambitious visions, they have disrupted the status quo and sparked excitement among investors worldwide.
Projects, such as NEO and VeChain have provided plenty of investment opportunities with their tokens. The NEO token, for example, peaked in early 2018 at a price of 187 USD.
Adoption and integration into global platforms
From what we’ve seen, this is the area that has seen the largest impact from Chinese projects. These projects are now key parts of so many global platforms, from clothing manufacturers to international banks.
Their advanced blockchain solutions, like the infrastructure of the decentralized Alchemy Pay platform, have attracted international organizations and blockchain-based enterprises.
Similarly, projects like VeChain are going a step beyond finance and offering practical services and benefits to their partners and users.
Potential challenges and opportunities:
While Chinese crypto projects have achieved remarkable success, they also face unique challenges. For one, the ban on crypto by the Chinese government has thrown a spanner in the works for many projects.
The good news is that many of these projects have moved overseas to continue development. Plus, we are also anticipating a reduction in restrictions from the Chinese government.
Chinese developers and innovators have been an insurmountable asset in crypto development. While the 2021 ban did slow down this progress, many projects are still delivering on their promise of upgrading blockchain tech.
We can’t predict exactly what’s in store for these and many similar projects in the future. But, from what we do know, crypto as a whole is not slowing down anytime soon.