How the city-state turned its weakness into a strength

Beginning in March 2021 and lasting until June, Taiwan experienced its worst drought in 56 years. Reservoirs once meant to supply entire cities were transformed into massive dust quarries, while households were forced to accept a minimum of two days a week without water. In May, thousands gathered for a prayer festival at the Dajia Jenn Lann Temple, imploring the goddess of the sea for a return of rainy weather.

Upper catchment of the Zengwen Reservoir by CNA

While Taiwan isn’t the only country with a drought problem, it is one of the wealthiest. The island manufactures 92% of the world’s most advanced semiconductors, with a per capita…

It seems like crypto’s immediate use case for the developing world is as a store of value and a means for moving money internationally. I remember visiting countries like Kyrgyzstan and Cambodia and realizing that many people keep their life savings in USD cash hidden in their homes. When the banking system isn’t trusted, a crypto wallet could be seen as a viable alternative.

The main problem with bitcoin as a currency, aside from price volatility, is transaction time. Consider that it takes, on average, 10 minutes to mine a single bitcoin block capable of containing, at maximum, 3,500 transactions. Compare that to the 1,700 transactions processed by Visa every second. Unless some major change is implemented in bitcoin’s protocol, it’s hard to see how that system could scale to tens of millions, let alone billions, of daily payments.

“Free” is often seen as the long game. Google could have charged for the use its search engine, but doing so would have automatically cut off several billion potential users. In a certain sense, our data is more valuable to them than our money. When a business has the backing of financiers willing to lose money for 10+ years, or the subsidization of other profitable segments, it can afford to engage in activities that are, as you described, “almost charitable”. Ultimately, it’s believed, some sort of a monopoly will be established. In the meantime, someone, whether investors or customers, must pay.

The context of the current “crackdown”

Photo by Marco Verch via Flickr (CC BY 2.0)

To say that China’s relationship with bitcoin is strange would be a bit of an understatement. The fact that the Chinese markets for mining and trading bitcoin are, or were, the largest in the world isn’t too surprising. After all, China is the largest in many things. What is surprising, at least to an outsider, is how these markets continue to exist despite the fact that buying and selling bitcoin in China is technically illegal.

If there were any doubts regarding the central government’s position on the matter, they were certainly addressed by Vice Premier Liu He, who recently declared

Lev Kakasenko

Fascinated by how society and technology interact. Always looking for a new perspective on the world.

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