The World Economic Forum (WEF) was aflutter about bitcoin and blockchain this year, going as far as creating the Global Blockchain Business Council spearheaded by China. This is unsurprising given the fact that Shanghai is home to the largest BTC exchange by volume.

Neil Woodfine, COO of Remitsy and Beijing Bitcoin meetup organizer, however, debunks the myth of China and Bitcoin in his article, “How Chinese is Bitcoin?”. He argues that China’s 90% trade volume is completely misleading. Chinese bitcoin trade volume sure is supermassive. The three major exchanges (OKCoin, Huobi, and BTCC) report a 30-day trade volume totaling 186.3 million BTC accounting for 98.3% of all global trade volume. However, if you stop there, you’re only getting a small part of the picture.

“Basically, bitcoin old-timers have been on a long journey. We think about it every day. And our ideas of what bitcoin are changing all the time. What I thought about bitcoin and blockchain have radically changed over even the last six months,” Neil says. “Then you get all these newcomers coming in, saying that blockchain is the real innovation and it’s going to change this and that.”

China bitcoin exchanges charge zero trade fees, meaning there is a lack of friction. The zero trade fees indicate that there is zero cost to making any trade. This leads to the question of who actually pays for the mining done. Anyone can participate in blockchain, moving bitcoin from one node to another. But blockchains are only responsible for recording the transactions, not for turning cryptocurrency into actual liquidity. In other words, there is no actual value on the blockchain.

Neil gives another example of bitcoin fraud through wash trading. A trader could set up two separate accounts and trade his bitcoins back and forth rapidly. If he trades one bitcoin a thousand times a day, he will generate 1,000 BTC in trade volume without any value or real trading happening.  Couple this with the fact that most exchanges generate revenue from withdrawals, the fees of which are based on each trader’s transaction volume. The higher the volume, the lower the withdrawal fee.

Moreover, despite all this manipulation, blockchain is still not exactly a “trust protocol.” Blockchain has advertised itself as the ultimate source to eliminate trust barriers. The truth is, however, for anything of value other than bitcoin to be transacted via blockchain requires additional layers of agents, third parties, and auditors. Participants can also choose their level of transparency when it comes to transactions.

The core of the problem is nobody has really figured out what this distributed ledger technology is about or what problems it could solve.

“Bitcoin and blockchain are more a cultural paradigm shift than just a technology. It’s all about decentralization, so the attempt of intermediaries to repurpose it appears quite ludicrous,” says Ferdinando Ametrano, “Bitcoin and Blockchain Technologies” teacher at Politecnico di Milanoan.