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Despite crypto ban, China’s tech talent rides the global web3 wave – TechCrunch

Despite China’s turns Cryptocurrency bans are quietly thriving for domestic Web3 talent, with many venturing beyond national borders.

From offering crypto derivative products to making NFT games, the presence of Chinese Web3 entrepreneurs is far-reaching around the world. We spoke to a dozen Chinese founders and investors to find out how this group is attempting to build global Web3 companies while maintaining their roots in China and capitalizing on the home country’s abundant technical talent.

Many of them asked for anonymity. Some do not wish to attract the attention of authorities due to the lack of clear rules for operating in China and serving foreign users, and others wish to avoid, at a time when China’s geopolitical tensions with the West are high, when ” to be referred to as “Chinese”.

exploratory state

Many believe that the current state of the Internet, or Web2, is overly dominated by centralized, profitable companies like Google and Meta. Part of web3’s appeal is reclaiming the internet through distributed ledger technologies like blockchain, promising greater decentralization and user ownership.

Cryptocurrencies and non-fungible tokens are two popular uses of blockchain that have attracted billions of dollars in investment, but they are far from the technology’s only use cases.

China is still figuring out what it wants from web3, but of course it doesn’t want to miss out. In 2019 personally by President Xi Jinping vouched for the role of blockchain in the technological revolution.

What China doesn’t want is the falling cryptocurrency prices that have roiled the market in recent months. It appears to be promoting a more controlled, centralized version of Web3 – blockchain should be managed by trusted organizations rather than anonymous computers on the open web, and push productivity to levels the government sees fit.

It’s no surprise that China has gone outlaw First coin offerings and crypto-based transactions for their financial risks, but there is a gray area with other blockchain applications. While China has warned against using NFT as financial collateralthey will be rebranded as “digital collectibles,” which can only be bought with China’s fiat currency RMB, have little liquidity, and are tasked with promoting copyright protection.

Following the above direction, some of the Chinese Web3 developers join in building the digital collectibles infrastructure. Other use cases have also received the nod from the government. Alibaba’s financial subsidiary Ant Group, for example, came up with it a range of blockchain services for purposes such as using blockchain to verify court evidence and track food supply chains for security reasons.

Some argue that cryptocurrency, viewed as a store of value, is like web3’s bread-and-butter fortune. Without them, web3 will not be able to reach its full potential. Those in China who hold this view have largely turned their focus overseas, serving international users and raising funds from offshore institutions.

Lots of talent

In recent years, numerous Chinese Web3 startups have moved their units overseas in the wake of the country’s crypto crackdown, but they are not abandoning China outright. They’re following a playbook proven by previous generations of tech companies: domiciled abroad, maintaining some operations in China, and pursuing overseas markets.

“Where else do you find thousands of skilled engineers?” says a China-based crypto exchange employee, asking not to be named.

China played a crucial role in the early development of the blockchain industry and spawned a generation of crypto-savvy talent. Some of the world’s largest crypto exchanges, including Binance, FTX, KuCoin, Crypto.com, OKX, and Huobi, got their start in Greater China. The world’s largest crypto mining company Bitman was founded in Beijing. Chinese conglomerate Wanxiang was Ethereum’s first corporate investor, spawning crypto investment powerhouse HashKey.

“There are seven million programmers here who have proven time and time again that they can innovate,” said Herbert Yang, general manager of Asia for Dfinity. the a16z supporteda Zurich-headquartered company, was looking for projects in China to deploy on its blockchain network as the country offers “a great pool of tech talent.”

Other international organizations are turning to China for the same reason. The Ethereum Foundation, the organization behind the second largest cryptocurrency, sponsored the Hackathon «ETH Shanghai» to lure developers into its blockchain network. The virtual version of the event attracted nearly 1,000 developers this year, an estimated 60% of whom came from China, according to event organizer Mask Network, a startup bringing Web3 capabilities to Web2 platforms.

Chinese crypto firms moving abroad try to bring their Chinese employees with them, but most of them resort to maintaining some presence in China. While crypto-friendly countries like Singapore have policies to attract foreign talent, local governments often set quotas to protect domestic employment. Employees with families in China are initially reluctant to relocate.

The timing was right for Web3 startups trying to hire in China over the past two years. The crypto value hit historic highs last year China’s crackdown on its internet industry was in full swing. mass layoffs and cut salaries prompted many employees at companies like Tencent and Alibaba to seek opportunities in the Web3 frontier.

Others are voluntarily quitting their jobs at established tech companies to ride the Web3 wave, either drawn by the technological potential of blockchain or the chance to amass wealth quickly. Alibaba’s fintech subsidiary Ant Group, for example, has lost dozens of its employees to Web3 startups in recent months, TechCrunch has learned.

Top Product Manager

It’s no news that tech outfits employ workers in China while serving international users. zoom had Hundreds of R&D staff in China before Western media reports questioned the security of its cross-data practices. Alibaba owned Lasada and Shopee, Southeast Asia’s e-commerce foes, also have major offices in Shenzhen, a hub for export and tech talent.

For many tech companies, China remains a hot hiring place thanks to a decade of breakneck growth and competition in its internet sector. Companies like Alibaba, Tencent, and TikTok owner ByteDance have earned recognition in Silicon Valley and beyond for innovating in their respective fields.

“Chinese-founded projects are great for managing and designing business-to-consumer products,” suggests a Chinese contributor at a US-based blockchain startup. “They are obsessed with data analysis and spend a lot of time fine-tuning products.”

China’s strength on the Web3 lies less in building the underlying blockchain infrastructure and more in developing applications for users, opined several crypto investors and entrepreneurs.

“The first possibilities in web3 are in protocols [infrastructure for blockchain applications]but they mostly resolve transactions while overlooking user experience,” says a Hong Kong blockchain startup founder.

“Chinese are very good at building user experiences. Finally, China has produced a robust Web2 ecosystem,” he adds.

China’s tech workers are also known for being “hardworking,” according to Curt Shi, an early investor in the StepN move-to-earn app and a partner at the Prodigital Future Fund, which is looking for web3 projects founded in China that are going global. While the overhaul culture in China’s technology sector has drawn fire in recent yearsothers see it as the country’s advantage.

StepN, for example, is run by founders who emigrated to Australia from China. Like many entrepreneurs in the Chinese diaspora, it leverages its original and adopted homelands by retaining a small team in China as part of its international workforce.

“That’s why it can have 24/7 customer support, while many of its competitors can’t,” says Shi.

A cultural question

Despite the strengths that Chinese-led web3 startups can potentially muster, they face similar challenges as their web2 predecessors.

TikTok, which pioneered fast video sharing, is arguably the only Chinese consumer internet platform to have enjoyed global success in recent years. Without a significant local presence abroad, TikTok got off to an early start thanks to its parent company ByteDance Algorithm-driven content discovery engine developed in Beijing.

But the cultural understanding of entrepreneurs becomes crucial in web3. The industry is still in its infancy, which means a company’s ability to tell compelling stories is key to onboarding early adopters. “Companies on the Web3 need to culturally resonate with their users,” says a Singapore-based founder of a decentralized autonomous organization (DAO), originally from China.

Web3, as its proponents say, is in many cases community driven. The technology underlying blockchain has built in the idea of ​​consensus. DAOs, for example, make decisions based on the collective consensus of their communities.

Web3 teams founded in China that lack the language skills to effectively convey their ideas or lack understanding of other cultures may have a harder time attracting users in new markets.

“I’ve seen Chinese companies with good products, but they don’t know how to speak to the international community,” says the DAO founder. “Only having a good product is no longer enough in web3.”

Despite crypto ban, China’s tech talent rides the global web3 wave – TechCrunch Source link Despite crypto ban, China’s tech talent rides the global web3 wave – TechCrunch