Bitcoin in the County

Source: Lawyer Liu Honglin

Only by walking in the vastness can we know the insignificance of human beings. Only by wandering in history can we know the brevity of life. Walking and daydreaming will help us empty our external things and discover how small we are. Knowing that the truth is not easy to get, we will no longer argue. Knowing that all things have spirits, we will no longer be self-centered.

This is the beginning of the book "Jia Xiang" by director Jia Zhangke, written in Dunhuang in the wind and sand.

It is a long journey from Linfen, Shanxi to Dunhuang, nearly 2,000 kilometers away. My bedtime reading comes from this native of Fenyang, Shanxi. Reading his life starting from Fenyang, those memories centered on video halls, cassettes, and county art troupes, he said that the county town is the most real and heavy part of Chinese society. That is his starting point and the lens through which he observes China.

So when Jia Zhangke makes movies, he can't avoid county towns. His movies don't shoot skyscrapers, but people in places like Linfen, Fenyang, and Taiyuan. In the documentary "Fenyang Boy Jia Zhangke", he recalled that when the teacher asked the whole class to watch "Dong Cunrui", the female monitor cried and everyone must learn from her. At that time, he didn't know that "expression" could become a profession, but the times changed too fast, and reality was more drastic than the script. What he did was just to use a county town as a viewfinder to make up for those out-of-focus shots in China's transformation.

County towns are the middle state of China, neither a village in the traditional sense nor a city in the first-tier sense. You can see government buildings, department stores, and wedding companies with exquisite decorations, as well as tricycles by the vegetable market, telephone poles covered with "certificate application advertisements", and old people wearing flowery cotton jackets. County towns have the atmosphere of commercial society and the stickiness of human relationships; they have modern skin and the skeleton of traditional society. It is the most realistic mixed reality in China.

But in this reality, the Bitcoin we know almost does not exist.

In coffee shops in Shanghai and Shenzhen, people discuss Bitcoin as a technological revolution and a global value network; you can hear entrepreneurs talking about RWA, L2 expansion, DAO governance, on-chain clearing; Web3 conference, Hong Kong licensing, Singapore compliance, Token economy... It seems that we are witnessing a wave that is about to replace the old world. But once you enter the county, the reality of virtual currency is completely different.

A friend who works as a lawyer in the county told me that he has received many cases related to "virtual currency" in recent years, almost all of which occurred in prefecture-level cities and counties in the northwest or central regions. He mentioned a real case: a young man from a small town, relying on a "side job" on WeChat to help people collect USDT and exchange it for RMB, earning dozens of yuan in handling fees for each transaction. He was in his early twenties, had not studied much, and had never been exposed to any financial knowledge. He thought that this "sideline" had a low threshold and low risk, with a few WeChat messages, a card, and a few hundred yuan in handling fees. "It's just helping people exchange coins, not cheating anyone." It wasn't until the police came to his door that he realized that he was a fund channel in the fraud chain. When faced with the judge's questions, he couldn't even explain "where the funds came from and where they were transferred to."

This story is not a special case. "Bitcoin" in the county town is not a dream of decentralization, but an unsolvable problem of account freezing, fund risk control, fraud charges, and inability to handle cases. There is no demand for USDT cross-border settlement, no entrance to the Web3 ecosystem, and no KOLs explaining cold wallets and MetaMask. The first time people heard about "virtual currency" was often because someone was cheated, someone couldn't get out after joining the group, or someone's money was transferred out and never came back.

Over time, the impression of county people on virtual currency is not technology, not the future, but two words: "scammer".

This has formed a visible rift: virtual currencies within the Fifth Ring Road are about startup financing, policy observation, speeches at the Web3 Summit, and discussions of compliance, stablecoins, Payfi, and tokenization; virtual currencies outside the Fifth Ring Road are about account freezes, withdrawals from groups, public security notifications, and court cases, and real-life conversations like "Do you know that fellow villager who deals with coins?"

County towns have no shortage of smartphones or information channels, but they lack the trust foundation and usage scenarios for understanding these technologies. Here, Bitcoin is not "digital gold" but "synonymous with high risk"; you say Ethereum is an asset issuance platform, but it sounds like some kind of scam code here; you say Web3 is an ideal decentralized governance method, but others may think of "pig killing".

In the information dissemination system, this misunderstanding will only be magnified. In the WeChat circle of big cities, you can see who has completed the Pre-A round, which project has been on the front page of TechCrunch, and who gave a speech on the story of "global circulation of assets" in Singapore; while in the WeChat group of county towns, what is circulated is the painful experience sharing of "a female college student was defrauded of 600,000 yuan by speculating in cryptocurrencies", "a local police reminded not to participate in virtual currency transactions" and "a bank card was frozen for three months and could not be unblocked".

County towns are not backward, they just live in another order. In this context, Bitcoin and Web3 are difficult to explain clearly, even if they do have technical content and global potential. But reality will not automatically give you positive cognition just because you have technology.

This is why, when we discuss compliance paths, infrastructure construction, and global settlement capabilities of stablecoins in the industry, we must admit that this industry is "layered" in China. Inside and outside the Fifth Ring Road, there are two financial languages, two information systems, two risk perceptions, and two life orders. People in county towns are never outsiders, but they are often the "last to be told".

It is not that Bitcoin cannot enter the county, but we have not found an appropriate way to tell the story. Facing grassroots civil servants who are exhausted by "USDT money laundering" or "electronic fraud channels" cases, it seems distant and powerless to talk about what the token economic model is; and for those families who have lost their feet in the capital plate, no matter how advanced the technology is, it is difficult to gain trust for the second time.

But sometimes we also need to think from the perspective of others: for many grassroots law enforcement officers, they are not against technology, but they do not have the extra energy to understand it. The cases they handle daily have already made them exhausted-electronic fraud, money laundering, cross-border funds, account freezing, each line involves the losses of countless families behind them. They cannot see the future of "blockchain technology", but only the reality that "on-chain funds" make people bankrupt. It's not that they don't want to understand, but reality doesn't give them time to understand.

And it is difficult for ordinary county residents to distinguish which ones are fraud disguises from marketing rhetoric. For most county users, there are almost no tools to judge the difference between stablecoins and pyramid schemes, the boundary between platform coins and points, and the distance between on-chain projects and capital pools. This lack of "financial literacy" is the deep reason why scams are successful again and again. When you see someone around you being deceived, you naturally label the entire industry.

If technology wants to truly enter life, it must first learn to speak the words of life. The county town is not a marginal area, but a real context that we have not yet had a serious dialogue with. It is not about adapting it to our vocabulary, but we should also try to understand the language there. Perhaps the story of Bitcoin, in addition to being told at the Web3 conference and financing news, should also happen in more ordinary places.

The wave of technology will eventually come, but it will not only pass through loess and sand, but also misunderstandings, vigilance and silence.