Despite China banning the use of cryptocurrencies, domestic web3 talent is flourishing.
Chinese web3 entrepreneurs offer a wide range of products and services. We spoke to a dozen Chinese entrepreneurs and investors to find out how they are trying to build global web3 businesses while still keeping their roots in China.
Many of them wanted to remain anonymous. Some don't want to draw the attention of the authorities because there are no clear rules around operating in China and serving overseas users, and others don't want to be labeled "Chinese" at a time when China's relations with the West are strained.
The current state of the internet, or web2, has become too dominated by a few corporations, according to a lot of people. The appeal of web3 is to return the internet to it's original state through distributed ledger technologies.
Billions of dollars have been invested in Cryptocurrencies and non-fungible token, but they are not the only use cases of the technology.
China doesn't want to miss out on web3 The president personally vouched for the role of the technology.
Crashing prices of Cryptocurrencies have roiled the market in recent months. It appears to be encouraging a more controlled, centralized version of web3 that should be managed by trusted organizations rather than anonymous computers on the open web.
China moved to outlaw initial coin offerings and other cripto-based transactions for their financial risks but there is a grey area when it comes to other cripto-based applications. While China has warned against the use of NFT as financial securities, it is branding it as a digital collectibles, which can only be purchased using China's currency, the renminbi.
Some of China's web3 developers are following the direction given at the top and building the infrastructure for digital collectibles. The government has given its approval to other use cases. For example, the financial arm of the Chinese company, the Ant Group, has created an array ofBlockchain services for purposes such as using it to verify court evidence and track food supply chains for safety.
The bread and butter assets of web3 are argued to be similar to the store of value of cryptocurrencies. web3 won't be able to operate at its full potential without it. The people in China who hold this view have turned their attention to serving international users and raising funds from offshore institutions.
Scores of Chinese web3 startups have moved their entities overseas in the past few years, but they aren't giving up on China. Previous generations of tech firms kept some operations in China and went after foreign markets.
"Where else are you going to find competent engineers?" asks one China-based employee of a coin exchange.
China was a key player in the early development of theBlockchain industry. The Greater China area is where some of the world's largest coin exchanges began. Bitman was founded in Beijing. Wanxiang, a Chinese conglomerate, was the first to invest in ether.
The general manager of Asia for Dfinity says that there are seven million programmers in the region. The company came looking for projects in China that could be used on its network because of the country's great pool of tech talent.
China is used by other international organizations for the same reason. The organization behind the second-largestcryptocurrencies sponsored a Hackathon in order to get developers to use its network. The virtual version of the event attracted over 1,000 developers this year, with most of them coming from China, according to the event's organizers.
Most of the Chinese firms that are moving overseas keep some staff in China. Singapore has policies for attracting foreign talent, but local governments often set limits on domestic employment. Employees with families in China don't want to leave.
It was a good time for web3 startup to hire in China. Last year, when China was cracking down on its internet industry, the value of cryptocurrencies reached an all-time high. Large-scale layoffs and slashed salaries caused many workers from the likes ofAlibaba to look for opportunities in the web3 frontier.
Some people quit their jobs at established tech firms in order to ride the web3 wave because of the chance to accumulate wealth quickly. In the last few months, many of the employees of Ant Group have left to work for web3 startup.
Tech outfits in China serve international users. There were hundreds of R&D staff in China before Western media questioned the security of its cross- data practices. Shenzhen, an export and tech talent hub, is home to both Lazada and Shopee.
Thanks to a decade of rapid growth and competition in its internet sector, China is still a good place to hire a tech firm. ByteDance, the owner of TikTok, has been recognized for innovation in their fields.
A Chinese worker at a U.S.-basedBlockchain startup says Chinese-founded projects are great at managing and designing business-to-consumer products. They spend a lot of time fine tuning products
China's strength in web3 is more in developing applications for users than in building infrastructure.
The early opportunities in web3 are in protocols, but they are mostly solving transactions.
People from China are very good at creating user experiences. He says that China has created a robust web2ecosystem.
China's tech workers are known to be hard working, according to a partner at Prodigital Future Fund. The overworking culture in China's tech sector has drawn fire in the past, but others see it as an advantage.
The StepN is run by Chinese people who moved to Australia. It keeps a small team in China as part of its international staff to take advantage of its original and adopted homes.
Many of its rivals can't have customer support 24 hours a day.
The challenges faced by Chinese-run web3 startup are similar to those faced by their predecessors.
The only Chinese consumer internet platform that has achieved global success is TikTok. Without a significant on-the-ground presence in foreign countries, TikTok took off early.
The cultural understanding of entrepreneurs becomes important in web 3. The industry is still in its infancy, and a company's ability to tell convincing stories is key to getting people to sign up. The founder of a DAO who is originally from China says that companies in web3 need to connect with their users culturally.
Web3 is often community-run. The idea of consensus is built in to the technology. The collective consensus of their communities can be used as the basis for decisions.
Chinese-founded web3 teams that lack the language ability to effectively convey their ideas may have a hard time winning users in new markets.
The founder says that he has seen Chinese companies with good products, but they don't know how to speak to the international community. It isn't enough to have a good product in web3.
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