Bitcoin ranked 13th by Chinese government in report that rates ETHEREUM as the leading cryptocurrency
The Chinese government has produced the first ratings table ranking cryptocurrencies, despite also being the first government in the world to ban its people from trading in them.
A government research unit, called the China Center for Information Industry Development, has ranked 28 cryptocurrencies and the blockchains behind them.
In a blow for bitcoin enthusiasts, it was ethereum that took the Chinese government’s research group’s top spot, based on the technology involved, application, and technological innovation.
Ethereum is currently trading up 1.51 per cent at $704.25.
Despite all the hype it has attracted, bitcoin only came in thirteenth place, with poor scores for the technology underpinning it, as well as ‘applicability.’
After months of wild ups and downs, bitcoin is currently trading down 0.40 per cent to $8,306.75.
The price of bitcoin exploded in the second half of last year and raced towards the $20,000 mark before Christmas.
Since then, it has nearly halved in value which will mean that many who jumped on the bandwagon in December could have been badly burnt.
The underlying technology behind bitcoin is blockchain, a financial ledger maintained by a network of computers that can track the movement of any asset without the need for a central regulator.
Bitcoin launched in 2009, while ethereum only arrived in 2015.
For some, the research shows that the Chinese government is throwing its weight behind blockchain development following its crackdown on illegal trades late last year.
To date, the Chinese government has banned initial coin offerings, closed down domestic exchanges and blocked all access to websites dealing with cryptocurrency trading, including foreign platforms.
Aside from its table rankings, the Chinese government’s research body gave little detailed insights into the methodology behind their latest findings.
Eric Zhao, a Shanghai-based engineer at the Chinese Academy of Sciences, told Quartz he would not take the ratings very seriously because ‘most old-school experts haven’t followed the crypto space long enough to grasp some of the traits of [the] tech and community that can’t be found elsewhere.’
He added: ‘I believe at least it’s a sign that the officials are starting to treat crypto projects more like a neutral endeavour towards better technology and innovations, rather than just challenging the power and authority of banks and government.’
If you do buy into bitcoin
Find out how bitcoin and the blockchain works, so that you have some understanding of the system, the ledger, the major players and the public and private key elements.
Remember bitcoin yields nothing and its main source of value is scarcity. Most bitcoin activity is trading not investing.
Research coin wallets, the digital vaults where cryptocurrency is held, and consider security carefully. Bitcoins have been stolen before, understand how this happened.
Be prepared for extreme volatility. The price can move by 20 per cent in one day and you could easily lose half of your cash in a far quicker time that investing in the stock market.
Consider how you would cash in any gains. There are reports that this has proved hard for some people. A time of market stress could lead to people being locked in and unable to trade.
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