Underground Bitcoin Industry in China: 3,500CNY for Ghostwriting a Whitepaper, Unstoppable ICOs and One-Coin-One-Lambo Dream
“A new cryptocurrency’s gonna be online tonight, as soon as it opens I’ll dump it,”
Immersed in extreme anxiety, Wang Ming, gripping his cellphone and glancing at it every few minutes where dozens of cryptocurrency trading apps are installed.
While China regulatory authority is repeatedly warning about the risks of ICOs and virtual currency trade, ICOs are continuing unabated and spread faster in the aftermath of ICO Ban last September and the recent Offshore ICO Warning. Blockchain believers and speculators take use of technology and capital to compete with the regulator globally. Newcomers keep entering in succession with the dream of overnight wealth, but never know they might succeed or lose their lifetime wealth for it.
1. A bet to be a somebody or a nobody
Wang Ming is a programmer in a game company with solid pay of 20,000 CNY a month. Though have such a decent income, he still cannot afford the frightening home prices in Beijing. After witnessing a colleague realize financial freedom with bitcoin, he put all his savings into the crypto market.
“A buddy earned 10 million yuan shortly in six months, what do you feel?”
In the traditional wealth management, an annualized return of more than 10% would worry investors in China, while bitcoin soared 14 times in 2017 and ETH crazily 120 times. This means that if you put in a month’s salary to buy cryptocurrency early last year, it could have earned you a home down payment by the end of the year.
Tempted by the overnight rich, Wang got on the crypto train last October despite the ICO ban a month ahead but taking it as a good opportunity to get on.
Although virtual currency transactions have been banned domestically, OKCoin, Huobi and Binance, three major mainstream exchanges in China, have relocated their business to policy-friendly offshore regions. These exchanges can normally operate as long as they are licensed in countries where virtual currency is deemed legal, and investors can have access to these exchanges to buy and sell virtual currencies as long as they can get around the firewall.
To avoid risks, these exchanges themselves do not provide fiat-to-token trade, but they support over-the-counter transactions where the platform serves as an intermediary and users buy and sell tokens to other individuals. In addition, there are a large number of pump-and-dump QQ group, WeChat group and even Baidu PostBar where the two sides negotiate the price and make a deal, as simple as shopping in a market.
Wang is in more than 10 WeChat groups collecting routine cryptocurrency information, and discussing which coin might “take off” to be the next bitcoin gold rush. But no one knows clearly what blockchain is and what relation their invested project has with blockchain, what they care is it is introduced and backed by whom.
“Blockchain is trust, if you trust in this guy, you buy it.” Wang said.
His most invested coin is EOS backed by Li Xiaolai and “Laomao”, two bitcoin celebrities in China. Though it slipped lower after the ICO ban at merely $ 0.5, it went up soon. When Wang came into the play, EOS has risen to $11, and it is rumored that it will go up to $30. Some even think that it may exceed $100, so does Wang. The first thing after opening his eyes is to follow the crypto market, seeing his wealth increase and increase.
“It feels like having a sweet dream.”
But it lasted for only several days, after hitting the all-time-high $18.16 on Jan.13, it sharply went down to below $10 four days later.
Wang wouldn’t disclose how much was tied up in EOS, saying it’s less than a year’s income (his annual income=240,000 CNY, equivalent to 38,000 USD). He’s still HODLing it in the faith of high risks and high returns.
“Bet on the right one, you’ll be a somebody.“
2. ￥3,500 for ghostwriting a professional ICO whitepaper
“All the entrepreneurial teams are trying to issue cryptocurrency. ICO is fundraising, who doesn’t want money?”
a financial advisor said. His company has set up a special “ICO investment department” to tutor its clients how to start an ICO the same as the guidance for an IPO. They are currently actively expanding the global exchanges to help more projects start their ICOs.
A few teams rush to make a website and soon whitepaper issued to start ICO. This gives birth to a new business on Taobao (a Chinese online shopping website similar to Amazon)— ghostwriting ICO business plan, which only needs the buyer’s outline idea and a professional ICO business plan that needs to raise billions of capital would be presented with the offering price of only 3500 CNY and would be finished in 5-7 days, even cheaper than ghostwriting for a student’s graduation thesis.
A screenshot of Taobao customer service answering the questions related to ICO whitepaper ghostwriting
And a ghostwriter said,
“we take in no more new orders now, as orders accepted have already been scheduled to Feb.10”
According to CoinMarketCap, there are currently globally 8,134 crypto exchanges, and 1,495 cryptocurrencies in circulation. According to an industry insider, the charge for a cryptocurrency to get listed on the top 10 exchanges shown on CoinMarketCap would be about 5-10 million CNY.
“Your coin will get listed on an exchange as long as you have money to bet.”
3. Invest or speculate
Those big players have been already all in. As Bob Xu Xiaoping calls on startups to embrace blockchain and shows his bullish attitude towards blockchain technology, more capital is running in the field, and more ICOs are on the way.
Hot on blockchain, many venture capitalist are cold on bitcoin, as Shao Yibo said,
“98% of ICOs are doomed to fail.”
However, the blockchain featured by decentralization is extremely to regulate, as investors who want make fortune by it can always find a way to circumvent the bans and regulations.
“It is impossible to stop the unstoppable ICOs, and more will come in 2018.”