A new theme is emerging from this COVID19 pandemic: China Distancing.
World wants China to pay. If China doesn’t want to pay – they want to pull out and pull out fast.
Japan has already laid out a stimulus plan that costs close to 20% of its GDP and the kicker, it made provisions for Japanese companies to return to Japan OR move to any country other than China.
The US has long been encouraging companies to ‘insource’, that is, to bring production back to the US. Now that theme is going to take the epicenter of its strategy as the US and the world tries to grapple with the repercussions of this crisis.
Mining operations may not be impacted
In fact, if China starts losing demand for its labor – they may encourage operations like Mining to step up to continue bringing in the revenue. Too much concentration of mining operations in China may be counter productive in combating nefarious activities.
I think crypto enthusiasts should start contributing, even in a small way, to the mining to support the networks they like. The blockchain protocols have to evolve into more energy efficient systems (like mobile mining or appliance spare resource mining).
Cyber attacks may increase
World has to upgrade its cyber security systems if it wants to protect itself from exploitation. What good does it do that you bring back the production only to find your citizens (and companies) lose their earnings and intellectual know how in a hack to those nations?
Blockchain being inherently more safe than other standard protocols could gain momentum in this quest for cyber safety.
World may find new production home in India
The closest alternative to China is India. In fact, India has a much younger population demographic than China. It is also a industrious nation. Under the leadership of Prime Minister Modi, India has been campaigning for ‘Make in India’, and it might finally come to fruition this time.
The Supreme Court of India has recently lifted the ban on Cryptocurrencies, as such, we might see an explosion of companies offering blockchain services, including mining operations (possibly using alternative energy options like hydro or wind).
Crypto trading volume may go down, temporarily
China forms a major share of crypto trading volume. If Chinese economy were to take a big hit because of companies pulling out of China, we might see a sharp, albeit short, decline in the trading volume. This will probably correct itself when Chinese turn to crypto trading to make money and with Indians getting onto crypto exchanges (as more services become available in India). The US Digital Dollar will help crypto space as a whole in general and with big brand names entering into the space, there should be an uptick in the crypto trading in the US.
Time will dictate what other repercussions emerge from this black swan event.
Thank you for reading and sharing this article. Stay safe and healthy!
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