As the Chinese government continues to celebrate the decline of the cryptocurrency market, a top Chinese blockchain expert has called crypto a Ponzi scheme. The CEO of Red Date Technology, one of the leading tech firms in developing China’s major blockchain project, Yifan He, recently wrote an article where he explained the Ponzi-like nature of various kinds of cryptocurrencies. The local newspaper, The People’s Daily, published the article on Sunday. In the piece, Yifan tagged private cryptocurrencies as the “biggest Ponzi scheme in human history.”
Yifan also mentioned the collapse of the Terra network and the crash of its algorithmic TerraUSD after losing its 1:1 peg to the United States dollar in May to corroborate his story. In his criticism, he pointed out the increasingly popular virtual currency concept, the “X-to-earn” projects, for example, the move-to-earn or play-to-earn projects, as “phishing strategies.” The chair of the Blockchain Service Network (BNS) also referred to famous figures such as the founder of Microsoft, Bill Gates, and legendary investor Warren Buffet who are well-known critics of Bitcoin (BTC).
In an interview on Monday, he said, “Currently, all unregulated cryptocurrencies including Bitcoin, are Ponzi schemes based on my understanding, just different risk levels based on the market caps and number of users.” The BSN chair continued that he had never had any crypto wallet or related assets. “I don’t touch them and won’t touch them in the future even if they have become regulated because I don’t consider that they have any value whatsoever.”
Yihan may be a critic of cryptocurrencies, but he had previously backed stablecoins in 2020. According to Yihan, governments who have opted to adopt BTC as legal tender need basic financing training. He, however, said that even though the countries intended to protect their citizens from scams and build state-owned digital currencies but might end up putting their countries at risk if not careful.
The Chinese markets have also used the opportunity of the slump in the crypto markets to justify the ban on cryptocurrencies in September 2021. Despite all efforts to thwart crypto by the Chinese government, China continued to be a dominant Bitcoin mining supplier globally, as it ranked as the second-largest BTC mining hash rate provider in January 2022.
Featured Image: DepositPhotos © nils.ackermann.gmail.com
