Bitcoin dropping after BTC China said it is closing • Hacker News Board

Re: Bitcoin dropping after BTC China said it is closing

#91

Post by danmaz74 » Thu, Sep 14, 2017, 4:13 PM UTC

davidbeep wrote: post #71

China not loving bitcoin and not being onboard isn't news. A communist government not agreeing with a decentralized currency shouldn't come as a surprise. Speculators who invest should understand that clearly, and not go into panic when China makes decisions that are very China-like. The good news is that it's a perfect time to buy more bitcoin and ether at a discounted price.

Speculators speculate. Of course they have to use all bad news to make money on shorts, and good news to make money on longs.

Re: Bitcoin dropping after BTC China said it is closing

#92

Post by wmf » Thu, Sep 14, 2017, 4:13 PM UTC

raesene6 wrote: post #87

It would seem that if China shuts down domestic Bitcoin exchanges that could have quite a big impact on the network as it could make the position of miners in china difficult. Looking at articles like ( https://www.buybitcoinworldwide.com/mining/china/ ) ~70% of all mining power is handled by China based groups, so it'd be a big change for that to be removed...

Mine in China, sell the BTC in Europe.

Re: Bitcoin dropping after BTC China said it is closing

#93

Post by danmaz74 » Thu, Sep 14, 2017, 4:15 PM UTC

raesene6 wrote: post #87

It would seem that if China shuts down domestic Bitcoin exchanges that could have quite a big impact on the network as it could make the position of miners in china difficult. Looking at articles like ( https://www.buybitcoinworldwide.com/mining/china/ ) ~70% of all mining power is handled by China based groups, so it'd be a big change for that to be removed...

I think that big miners wouldn't have such a big problem if the exchanges get shut down - as long as they export bitcoins and import dollars or other currencies, buying those in foreign cryptoexchanges, the government should be happy.

What the government probably doesn't like is the other way around, when normal people buy BTC with yuan and then sell them abroad, exporting capitals.

Re: Bitcoin dropping after BTC China said it is closing

#94

Post by nullnilvoid » Thu, Sep 14, 2017, 4:15 PM UTC

baldfat wrote: post #90

raesene6 wrote: post #87

It would seem that if China shuts down domestic Bitcoin exchanges that could have quite a big impact on the network as it could make the position of miners in china difficult. Looking at articles like ( https://www.buybitcoinworldwide.com/mining/china/ ) ~70% of all mining power is handled by China based groups, so it'd be a big change for that to be removed...

So does that mean AMD is about to lose their number one customers? China has almost a monopoly on mining due to access to low to no cost electricity. The miners preferred AMD Graphic cards and make AMD cards hundreds of dollars more valuable on EBay. https://www.pcworld.com/article/3199257/components-graphics/...

GPU's are still used in mining. But the majority of large-scale miners use ASIC chips to mine coins. ASIC chips are just more efficient and powerful. They are designed only for mining.

Re: Bitcoin dropping after BTC China said it is closing

#95

Post by andrewla » Thu, Sep 14, 2017, 4:16 PM UTC

nwah1 wrote: post #36

paxpelus wrote: post #21

Earlier quoted context omitted.

Market cap is the main reason in my opinion. The more people get involved the less volatile it is going to be. You should see how volatile BTC was in 2011-2012, what is happening right now is nothing in comparison.

The main reason for the volatility is that there is no actual use for them, and no entrenched demand via a tax system. The price of bitcoin can literally fall to zero. With fiat currency, achieving that would require the government losing its power to enforce tax collection. People losing interest in a fad seems to be a bigger risk than a governmental collapse.

I should give up on this, but I keep hearing this argument about tax collection. You can make an argument that fixed dollar amount taxes (almost like property taxes) drive direct demand for the currency. I need to pay $100, so I need to get that $100 -- if it costs me all my horses and gold to get it, then I have to buy it. You can even argue historically (in a manner analogous to the "Mises Regression Theorem") that some of the value of fiat currency derives from this historical usage.

But all modern taxes (really, even, over time, property taxes) are driven by the underlying value, not by a fixed amount, and thus create no actual demand for the currency. If the government requires that I pay 10% of my income, and my income is 10 cows, it does not matter what the price of cows in dollars is -- I owe the dollar equivalent of a cow. If dollars are expensive, then I trade one cow for a few dollars and pay that, if dollars are cheap, I trade one cow for a lot of dollars and pay that.

There is no net demand created by this, and I don't know why people keep claiming that.

The other side, the "actual use", is definitely a real thing -- price discovery is very difficult when there is no real commerce, and until a complete supply chain can be priced in the currency, it's going to be hard for there to be any stabilizing pressure.

Re: Bitcoin dropping after BTC China said it is closing

#96

Post by outwebyou » Thu, Sep 14, 2017, 4:19 PM UTC

davidbeep wrote: post #71

China not loving bitcoin and not being onboard isn't news. A communist government not agreeing with a decentralized currency shouldn't come as a surprise. Speculators who invest should understand that clearly, and not go into panic when China makes decisions that are very China-like. The good news is that it's a perfect time to buy more bitcoin and ether at a discounted price.

First of all, China is an authoritarian government, not a communist government. Second of all, China is doing this because they are suffering from [hidden] massive outflow, and need to clamp down on that. The Chinese economy is slowly collapsing from all the malinvestments, and the rich folks are trying to get their money out. Look at the richest man in China, Wang Jianlin, unable to leave China

https://www.bloomberg.com/news/articles/2017-08-28/wanda-bon...

Re: Bitcoin dropping after BTC China said it is closing

#97

Post by cm2187 » Thu, Sep 14, 2017, 4:19 PM UTC

Hold on, I thought crypto-currencies were using encryption to ensure that no one can create more currencies like a fiat currency.

But we can just clone the currency, let's create bitcoin cash! Or let's agree to change the algorithm!

Hold on, I thought crypto-currencies were meant to be immune from government interference.

Wait, China cracking down on bitcoin makes its value plunge!

There is only one way to learn discipline when investing, the hard way, loosing one's own money. Hopefully people haven't bet too much on this.

Re: Bitcoin dropping after BTC China said it is closing

#98

Post by gourou » Thu, Sep 14, 2017, 4:23 PM UTC

cm2187 wrote: post #97

Hold on, I thought crypto-currencies were using encryption to ensure that no one can create more currencies like a fiat currency. But we can just clone the currency, let's create bitcoin cash! Or let's agree to change the algorithm! Hold on, I thought crypto-currencies were meant to be immune from government interference. Wait, China cracking down on bitcoin makes its value plunge! There is only one way to learn disc…

> Hold on, I thought crypto-currencies were meant to be immune from government interference.

And they are... mostly, but remembers that a lot of people invest in cryptocurrencies without knowing what they're about. People's perception is what drives the market.

Re: Bitcoin dropping after BTC China said it is closing

#99

Post by toss1 » Thu, Sep 14, 2017, 4:24 PM UTC

thisisit wrote: post #39

luxpir wrote: post #4

Take note, high-risk investors: now is a good time to buy.

I remember the last time something China related happened in 2013 or something. I forgot the exact news but it sent BTC tumbling back to $200-300 in next couple of years before it came back up. If you believe in China's influence that much, then better wait it out. There should be much better price to be had.

Yes, this is becoming a textbook example of the situation where the old investment adage applies:

"Don't try to catch a falling knife..."

Re: Bitcoin dropping after BTC China said it is closing

#100

Post by johnwheeler » Thu, Sep 14, 2017, 4:25 PM UTC

cm2187 wrote: post #97

Hold on, I thought crypto-currencies were using encryption to ensure that no one can create more currencies like a fiat currency. But we can just clone the currency, let's create bitcoin cash! Or let's agree to change the algorithm! Hold on, I thought crypto-currencies were meant to be immune from government interference. Wait, China cracking down on bitcoin makes its value plunge! There is only one way to learn disc…

Even more fascinating is how btc speculators have managed to convince themselves that the original thesis crumbling actually improves their positions. The mind believes what it wants to.