Only 4% of China’s Blockchain Companies Are Actually Using Blockchain

Mainland China has more than 35,000 “blockchain companies”, although in fact, the vast majority of them do not use this technology.

In the first quarter of 2020, when factories, offices and cities around the world were closed as a result of the COVID-19 outbreak, 2,383 completely new “blockchain companies” appeared in China.

According to Tianyancha, a business data company, as of April 1, the total number of such companies reached 35,010, and in only one province in Guangdong, there were more than 20,000.

However, according to another company, LongHash, in mid-February 2020, approximately 70% of the total number of Chinese “blockchain firms” lost their legal status or lost their licenses.

Blockchain in the name only

Last October, President Xi Jinping announced that the country should become a leader in the blockchain field. It seems that this is what prompted many companies to accept the blockchain attribute, although in reality, they have nothing to do with this technology.

In fact, it’s quite difficult to realize the work of a legitimate blockchain company in China, “knocking” it under state standards. Apparently, this is precisely why the attribute “blockchain” could work for these companies at the registration stage.

So, it was found that many small Chinese “blockchain companies” used this only as a marketing move, leading to further absorption by established firms.

Author: Marko Vidrih

Featured image credit: TNW