You probably haven’t heard of one of the cryptos that performed the best worldwide this year. Confusion (CRYPTO: This year, CFX) has grown by an incredible 1,800% and is close to joining the top 50 cryptocurrencies by market capitalization. Conflux is now the 51st largest cryptocurrency with a market capitalization of $1.1 billion and a price of just $0.45.

So, why is Conflux causing such a stir among investors? After all, Conflux is not a new AI crypto token and is not a crypto from the metaverse. Despite the fact that Conflux may not be able to capitalize on any of these hot tech trends, it does present a similar enormous growth opportunity: China. In a nutshell, Conflux is a ferocious Chinese blockchain project with its own unique set of dangers and opportunities.

The Chinese blockchain opportunity The best way to think of Conflux is as China’s answer to Ethereum (ETH -0.25%), which makes it valuable for technologists and developers looking to build the Chinese blockchain economy. Conflux was first established at Beijing’s Tsinghua University, also known as “China’s MIT.” As a result, this project is supported by a lot of very smart people, including Dr. Andrew Yao, who was awarded the Turing Award in 2000, which is computing’s equivalent of the Nobel Prize. The Conflux team asserts that it has a blockchain consensus mechanism known as Tree-Graph that is significantly superior to other consensus mechanisms, such as Ethereum’s proof-of-stake system.

However, Conflux’s meteoric rise to the top is actually due to its rapid transformation into a “public blockchain” in China. This indicates that it has the Chinese government’s approval, which is crucial in practice. Conflux can collaborate with leading Chinese technology companies and continue to grow without excessive state intervention. Just one example: For blockchain-based SIM cards, Conflux and China Telecom recently reached an agreement. It also agreed to acquire non-fungible tokens (NFTs) from Xiaohongshu, also known as Little Red Book, the “Instagram of China.”

Therefore, it is simple to comprehend why Conflux is gaining so much momentum and interest. It’s possible that this is a once-in-a-decade opportunity to invest. You can put money into a Chinese blockchain leader when no one has heard of it and its price is less than $1. Even better, Conflux claims that it will serve as a link between the West and East, facilitating global collaboration and interoperability among blockchain projects. Therefore, Conflux has opportunities for expansion beyond China.

Geopolitical and regulatory risk This cryptocurrency’s greatest reward also comes from its greatest risk. There is a problem with talking about Conflux without also talking about China. Keep in mind that Taiwan is experiencing a crisis, and if that crisis develops into a full-blown war, any opportunities for Chinese investments could be lost.

Furthermore, the government of the United States dislikes something about Chinese technology companies. Take, for instance, Huawei Technologies, a major Chinese 5G telecom provider that the U.S. government alleges is a Chinese Communist Party front. The United States of America no longer allows Huawei. Or how about TikTok, a well-known social media app from China that members of Congress are currently attempting to prohibit in the United States?

Regulator risk is something to think about if you decide to invest in Conflux. Conflux is currently not under the radar of U.S. regulators, whereas Binance, a Chinese cryptocurrency exchange, is. Any Chinese cryptocurrency or blockchain project attempting to enter the U.S. market is doomed, in my opinion.