Different states interact with the cryptocurrency market in different ways. Some countries still have not accepted digital currencies and have set bans on any action with them. Other states, on the contrary, believe that cryptocurrencies can have a positive influence on the economy if used wisely and regulated properly.
In any case, regardless of the state’s attitude toward crypto, a huge number of people around the world earn money on it, whether doing it legally or illegally. In this regard, some states have already started taking steps to support projects in this area.
One of the projects that managed to get approval from the authorities is the Conflux chain and its native token, the CFX cryptocurrency. In this article, we will discuss what it is and how to use it. You can learn more about other cryptocurrency projects and their places in the ratings of digital currencies in the article "Cryptocurrency rankings."
Asia and cryptocurrencies
In the Asian region, the situation with the cryptocurrency market is quite complicated. Thus, in China, until recently, operations with electronic currencies were not prohibited. However, in September 2021, the government introduced a complete ban on cryptocurrencies and all related activities.
The prohibited operations included mining, buying, or selling, as well as storing digital coins. In addition, China blocked the websites of cryptocurrency exchanges and exchange services, where you can track exchange rates, as well as banned the sale of devices for mining.
There are several main reasons for such bans in China:
- Negative impact on the environment. It is known that crypto mining is a very energy-consuming process that causes huge carbon dioxide emissions into the atmosphere. The People's Republic of China strives to improve the environmental situation in the country, so a ban on mining was introduced;
- Fight against money laundering. According to the Chinese authorities, digital currencies can be used in criminal schemes and the withdrawal of money from the country. This, in turn, hurts the entire financial system;
3. Threat to the digital yuan. The Chinese authorities are planning to introduce their digital currency, which is issued by the People’s Bank of China. This project is already at the stage of realization and is working throughout the country in a test mode.
Before the crypto ban, China accounted for more than 75% of the entire global production of digital currencies. When it became clear that a ban would be imposed, many miners began to move their farms to neighboring countries, thanks to which their share in global mining increased significantly.
Steps towards legalization
After the introduction of a ban on cryptocurrency transactions in China, the global mining of digital currencies did not suffer much. The bitcoin exchange rate recovered quite quickly, which cannot be said about the economic stability of the People's Republic of China. In addition, the Chinese continue to look for ways to make transactions with crypto.
Against this background, Hong Kong, which is a special administrative region in China, starting from the beginning of 2022, began to hold discussions on how to provide legal regulation of the cryptocurrency market.
For a year and a half, Hong Kong authorities made preparations by encouraging local crypto-related businesses, launching new digital assets on official exchanges, and so on.
Finally, in early June 2023, cryptocurrencies and all transactions with them were fully legalized in Hong Kong. At the same time, even though the Chinese government did not support this decision, experts note a silent approval.
Companies associated with the cryptocurrency market, which were forced to leave the Chinese jurisdiction in 2021, now have the opportunity to return to the region and continue operations in Hong Kong. Other states can also use the positive experience of regulating this market and apply it in their own countries.
Under the new regulation, cryptocurrency transactions will be allowed for retail investors. There will also be mandatory licensing of cryptocurrency exchanges. Some major platforms immediately applied for a license. Among them are Huobi, Gate.io, and OKX.
At the same time, other Asian countries, including Singapore, Thailand, and South Korea, also released their guidelines for regulating cryptocurrencies. In this article, we will talk about a platform that was developed in Singapore. It is the Conflux network.
Conflux platform
So, we have already found out that the situation with the cryptocurrency market in the Asian region is quite complicated. However, this region stands out for its technological orientation and high level of innovation. It is no surprise that it is in this region that new projects related to cryptocurrencies appear.
One such project is the Conflux platform and its currency, the CFX cryptocurrency. Let's try to understand what it is and what features this platform and its token have.
Conflux is the only public token authorized in China. What is so special about it, and how did it manage to do so? The company is registered in Singapore. However, among its founders, investors, and key employees are representatives of the Chinese technological elite, mainly scientists.
The network under consideration complies with all Chinese regulatory requirements. The support of government agencies allows companies to receive favorable offers in the public sector.
A distinctive feature of this chain is that the company did not conduct ICOs, which are prohibited in China. The project team managed to get a $5 million grant from the Shanghai government, and later, it got approval from the Hunan provincial government to use its technology in document management.
In total, the creators of the project managed to raise more than $40 million in funding. In addition, the project has several partnerships with large Chinese companies, which we will talk about a little later.
Conflux has two subnets, namely, Core and eSpace, which are used for the development of decentralized applications and perform other functions in this chain. With the help of these blockchains, communication with other platforms, such as Ethereum, is carried out.
History of project's creation
Work on the project started in 2018 in Singapore. However, even though the project was developed in Singapore, most of the staff and investors were in China. One of the key developers of the platform is Andrew Chih-Chih Yao, who was the first to win the Turing Award in China.
The official launch of the platform took place in 2020, and in a short period of time, it managed to attract a huge number of users. At the moment, the company successfully cooperates with more than 300 other platforms that use its services regularly.
At the same time, as already mentioned, the company did not go to an ICO, as initial public offerings of digital currencies are prohibited in China. The project managed to raise enough funding to develop the platform without an ICO.
In addition, the company managed to cooperate with large companies from the very beginning of its existence. One of the first partnerships was with the Chinese social network, Little Red Book. Then, the company cooperated with China Telecom to issue the first SIM card on the blockchain, as well as the social network Xiaohongshu (an analog of Instagram) to promote NFT.
The platform was also supported by major exchanges such as Binance and Uniswap. However, the most significant was getting support and interaction with China’s government agencies. This is an unprecedented case, which occurred just before the introduction of a ban on cryptocurrency transactions in China.
The project team continued to raise investment into 2023, with another $10 million raised in March. After the Hong Kong authorities announced the legalization of cryptocurrency trading, some Chinese cryptocurrency projects, including Conflux, showed significant growth.
How Conflux works
Conflux is a layer-1 blockchain, meaning it can exist and conduct all transactions completely independently. Typically, layer-1 chains "suffer" from scalability issues, but the Conflux chain is free of such problems.
The platform includes a special Tree-graph consensus mechanism that combines PoW and PoS elements. This allows processing up to 4 thousand operations per second (and can be increased up to 6 thousand) while maintaining a high level of network security.
This is achieved thanks to the fact that, when using this consensus mechanism, several transactions can be processed in parallel in different blocks, which are subsequently combined into different chains. To achieve consensus, GHAST technology is used to establish a specific order in which transactions are added to the blockchain.
Smart contracts supported by Conflux's proprietary Conflux Virtual Machine (CVM) are available on the platform. This technology is compatible with the Ethereum Virtual Machine (EVM). This makes it easy for developers to move their projects from one platform to another.
The ability to utilize Conflux allows developers to increase opportunities and reduce costs. In addition to this, there is the ShuttleFlow protocol, which provides interoperability between different networks in the area of data exchange.
As mentioned above, the blockchain in question has two subnets, or blockchains, that perform smart contracts. In this case, the Core subnetwork uses a CVM virtual machine, while the eSpace is fully EVM-compatible.
To perform any transactions and pay commissions, the user will need to create accounts on the Core and eSpace networks. Payments are made in CFX, the service currency of the chain. These tokens can be freely moved between the two accounts.
Partnership
In many ways, the success of the Conflux platform is facilitated by partnerships with well-known large companies in various industries. The fact is that they use the project's token, the CFX cryptocurrency. In this section, we will find out what partners the company has and how they contribute to the development of the project.
Even at the stage of creation, large investment funds such as Sequoia China and Baidu Ventures invested in the project for a total of about $40 million. Subsequently, the tokens of the company were purchased by DWF Labs, which invested another $10 million.
We have already mentioned the project's cooperation with Chinese telecom operator China Telecom on the issue of blockchain-based SIM cards. One more company, LayerZero, agreed to use such SIM cards.
The partnership with dappOS, which is a member of the Binance Labs Inc. program, allows for mutually beneficial cooperation. For dappOS, it means access to a fast and scalable platform for launching decentralized applications, and for Conflux, it means new opportunities to use its token.
After authorizing the circulation of cryptocurrencies in Hong Kong, Conflux announced that it would join the Web 3.0 Institute as a senior member. This cooperation will enable the promotion and development of Web3 in the Asian region.
The field of decentralized finance attracts many companies, including Waves, which has partnered with Conflux. The main purpose of this collaboration is to implement cross-network interoperability and expand the use of blockchain technology.
The project also supports the issuance of NFTs for various large corporations, such as McDonald's China, Oreo, LVMH, and others. In China, to popularize blockchain technology, it was decided to launch a campaign, with Conflux issuing 10,000 NFTs that were given away as prizes to winners.
CFX cryptocurrency
So, we have already found out that the Conflux blockchain has its currency. Let's get to know it better in this section. It performs several important functions on the site in question and is called CFX cryptocurrency. Let us take a closer look at this token.
ЦDigital currency CFX performs a central role in the functioning of the entire platform:
- It is used to pay all commissions and transaction fees on Conflux, as well as execute smart contracts;
- Used for staking, allowing users to place their tokens in special wallets and get rewards. In this way, holders can participate in the management and do their part in keeping the chain stable and secure;
- It is paid out as a reward to miners for mining new coins.
Conflux network tokens are mined as other cryptocurrencies. In this case, the platform has a special algorithm for mining called Octopus, which requires the use of video cards.
In addition, it is recommended to use equipment from particular manufacturers and of a certain power.
In addition to mining, this token can be purchased on many well-known centralized and decentralized exchanges. What is more, the exchange can be made using ShuttleFlow's technology and the Multichain platform on the eSpace subnet.
At the time of writing this article, the price of the CFX cryptocurrency was around 22 cents, making it a very affordable token to buy. There is no supply limit, and there are currently about 3.75 billion tokens in circulation.
Advantages and disadvantages
Like any other cryptocurrency project, the Conflux platform has its positive and negative features, as well as its token. Let us find out these pros and cons in this section.
So, the advantages of the platform under consideration include:
- Potential for scaling, thanks to a special consensus algorithm that is used in this chain and allows you to conduct several operations in parallel chains;
- High transaction speed. The considered chain allows for up to 4,000 transactions per second, and this is not the limit. For comparison, in the Ethereum chain, it is possible to make only 15 transactions;
- Low commissions. Compared to other chains, the fee for transactions in this network is much lower, which allows you to perform even small transactions;
- Opportunities for passive earnings. Additional earnings can be obtained with the help of staking, that is, blocking part of the coins in your wallet to maintain the functioning of the platform. Token holders are rewarded for this;
- Approval by Chinese government agencies. The support of the platform by government agencies opens a wide range of opportunities for obtaining favorable contracts and using Conflux in document flow and administrative procedures.
This platform has practically no disadvantages. Among the main ones are:
- High competition. The cryptocurrency market is developing rapidly, including in the Asian region. Therefore, competition in this area is inevitable, and companies have to come up with new ideas to attract and retain users.
CFX prospects
Many experts consider the Conflux project and its CFX cryptocurrency to be promising. Let's try to understand what these prospects are and what potential this project has.
So, a team of strong developers worked on the creation of the platform. In addition, there is state support and approval from the Chinese authorities. These are already two important factors for success.
In general, the new legislation in the field of cryptocurrencies in Hong Kong gives companies from the Asian region an opportunity to considerably strengthen their positions. This region attracts a large number of projects, both new and previously located in other jurisdictions.
Cooperation with government agencies and the introduction of their technologies into various processes have great potential for the company. Thanks to this, the company will be able to count on the most favorable contracts. In addition, partnerships with large companies will also provide advantages and potential growth for the project.
The platform is often referred to as the "Chinese Ethereum," which indicates its powerful reputation in the cryptocurrency market. Already this year, Conflux has partnered with RAK DAO, a strategic initiative from the UAE that will help develop the field of digital assets in the Middle East.
The price of the project's native token, CFX, can be influenced by various factors. This currency, like any other digital coin, has high volatility. Nevertheless, the success of the project largely determines the demand for its currency.
Some experts predict the value of this currency will surge by 200% or more within the current year and the next few years. Therefore, this digital asset can be considered a good investment tool.
Conclusion
In this article, we considered one of the most interesting cryptocurrency projects in the Asian region, Conflux, and its currency, CFX cryptocurrency. We have figured out its features, advantages, and prospects for development.
In the Asian region, the situation with cryptocurrencies is quite ambiguous. Since 2021, all operations with crypto have been prohibited in China. However, this project, developed in Singapore, managed to get the approval and support of the Chinese authorities.
Thanks to this, the company has access to the most favorable partnerships and cooperation with large corporations, including international ones, as well as government agencies. The project did not hold an ICO, but it managed to attract more than $40 million in investments.
The platform uses a special consensus algorithm that allows transactions to be carried out quickly and with minimal costs. Several transactions can be processed in parallel blocks, thanks to which the chain can conduct up to 4,000 transactions. In addition, the network has huge scalability potential.
The project's currency is used to pay commissions for transactions and is also paid as a reward to miners for their work. In addition, native token steaking is available in this chain, which is used to maintain the functioning of the platform.
Many experts consider the project and its currency promising in terms of investment. Although a large number of factors influence the further growth and development of the platform, the project has a good team of developers who continue to take an innovative approach to their work.
Back to articles
