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China orders Bitcoin exchanges in capital city to close

bbc.co.uk

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Re: China orders Bitcoin exchanges in capital city to close

#81

Post by patio11 »

evbots wrote: post #55
cs702 wrote: post #15

As soon as I read this, two words came to mind: Capital flight. A growing number of Chinese nationals has been using Bitcoin to siphon money out of China over the past several years.[1][2] Not surprisingly, the Chinese government is cracking down on this innovative form of capital flight. [1] http://www.theepochtimes.com/n3/1891021-how-chinese-use-bitc... [2] http://www.theaustralian.com.au/business/markets/chinese-i…

I really don't understand the capital flight argument. The Chinese economy has seen overwhelming growth in the past 10 years. If you are searching for yield, it's in China.

Much of the money getting made in China is ending up in the hands of government employees who should not have very lucrative jobs, and the combination of lavish personal consumption by them and obvious advantages afforded to their children ("princelings") is causing audible social discontent about corruption.

The Chinese Communist Party considers audible social discontent to be an existential threat and responds to it with overwhelming force. Part of the response is banning public expressions of discontent. Part of it is shooting corrupt officials after show-trials. Part of it is rejiggering incentives, to make it clear that you'll have to keep your money under the watchful eye of the CCP rather than discretely investing it in a country which probably won't execute you.

Re: China orders Bitcoin exchanges in capital city to close

#82

Post by georgeecollins »

evbots wrote: post #55
cs702 wrote: post #15

As soon as I read this, two words came to mind: Capital flight. A growing number of Chinese nationals has been using Bitcoin to siphon money out of China over the past several years.[1][2] Not surprisingly, the Chinese government is cracking down on this innovative form of capital flight. [1] http://www.theepochtimes.com/n3/1891021-how-chinese-use-bitc... [2] http://www.theaustralian.com.au/business/markets/chinese-i…

I really don't understand the capital flight argument. The Chinese economy has seen overwhelming growth in the past 10 years. If you are searching for yield, it's in China.

Some people making money in China are doing so through corrupt practices, or for other reasons fear that the government will seize their assets. These individuals probably continue to invest in China. They just want some of their wealth in a place safe from forfeiture.

Re: China orders Bitcoin exchanges in capital city to close

#83

Post by stefano »

ComodoHacker wrote: post #74
tannerbrockwell wrote: post #22

China will nationalize the domestic miners and treat Bitcoin as a commodity asset that the state controls. I believe this will immediately cause a constriction in supply as those coins will not be sold at least initially on the open market. Look for this messaging to coincide with the pronouncements around the new five-year plan(FYP)[1]. As the first major section of the 13th FYP, innovation is emphasized as a corner…

>China will nationalize the domestic miners and treat Bitcoin as a commodity asset that the state controls Sounds like a good reason for a fork.

But if China has the majority of mining power, they can start mining your fork and do as they please with it.

Re: China orders Bitcoin exchanges in capital city to close

#84

Post by Nursie »

nikcub wrote: post #43
cs702 wrote: post #15

As soon as I read this, two words came to mind: Capital flight. A growing number of Chinese nationals has been using Bitcoin to siphon money out of China over the past several years.[1][2] Not surprisingly, the Chinese government is cracking down on this innovative form of capital flight. [1] http://www.theepochtimes.com/n3/1891021-how-chinese-use-bitc... [2] http://www.theaustralian.com.au/business/markets/chinese-i…

> The saver can then exchange bitcoin for dollars at any of the global bitcoin exchanges without anyone ever knowing his identity. This is where the "Chinese people use Bitcoin to exfil capital" story falls apart. It's near impossible to open a foreign bank account and pass KYC from within China as a Chinese citizen. You have to travel to Macau or Hong Kong - and if you're doing that you may as well use the cheaper a…

> foreign real estate

There's been something of a crackdown on this in the last few months too, AFAICT

http://www.telegraph.co.uk/business/2017/08/18/china-crack-f...

Re: China orders Bitcoin exchanges in capital city to close

#85

Post by jraines »

iagooar wrote: post #37

For those of you who know a bit more about the topic. Is this ban going to stop the large-scale cryptocurrency mining that occurs in China? Isn't it actually something interesting for the rest of the world, as mining could become a bit easier?

I don't know, but that's one of the two "real" questions:

1. How will China treat miners?

2. Will they go forward with blocking node communication at the port/GFW level?

Re: 1, if they shut down / limit mining it's nbd. If they co-opt it to try & launch 51% attacks it's a big problem, but not, I think, insurmountable and would be a tactical error.

Re: China orders Bitcoin exchanges in capital city to close

#86

Post by psyc »

TeMPOraL wrote: post #31
snitko wrote: post #6

Earlier quoted context omitted.

The sustainable business case is permissionless nature of Bitcoin. Everything else comes down to it. This talk of blockchain technology being somewhat of a new wonderful invention that's supposed to magically make companies more profitable...? Not so. The reason why Bitcoin exists is because governments want control over money. Bitcoin gives people freedom. Period. Everything else is noise.

> governments want control over money Of course. And for a good reason. People utter this line as if governments wanting control over money was somehow bad . Money, within all human societies that exist or existed, is pretty much synonymous with power. It is the tool that allows an individual to incent, compel and coordinate other people to do what said individual wants. With $1 you can make someone cook you a hot do…

Why conflate the fuzzy "ability to enforce [law]" with specific centralized economic levers? Your comment seems to be saying the former relies on the latter.

Re: China orders Bitcoin exchanges in capital city to close

#87

Post by tboyd47 »

tannerbrockwell wrote: post #22

China will nationalize the domestic miners and treat Bitcoin as a commodity asset that the state controls. I believe this will immediately cause a constriction in supply as those coins will not be sold at least initially on the open market. Look for this messaging to coincide with the pronouncements around the new five-year plan(FYP)[1]. As the first major section of the 13th FYP, innovation is emphasized as a corner…

Interesting theory but how can China control Bitcoin if there's nothing stopping people in other countries from mining it?

Re: China orders Bitcoin exchanges in capital city to close

#88

Post by _muff1nman_ »

mywittyname wrote: post #76
Akujin wrote: post #26

Earlier quoted context omitted.

My "buy in" was a $300 AMD graphics card which I then kept using for games after the mining difficulty was too high. As far as I'm concerned my BTC is an added value. If it crashes to worthlessness I would not care. PS: I have no intention of cashing out. Since BTC is deflationary I'd rather hold till each BTC is worth 100k. Check this thread in 2030 :)

Deflationary does not imply an ever-increasing value. At some point, deflationary commodities will be so rare as to be useless. Lack of supply leads to a lack of velocity, which leads to a lack of liquidity. Once that happens, people will move to a competing product. Imagine if soy beans gradually went extinct. In the short-term, the prices would spike as companies reliant on soy beans compete for the shrinking suppl…

> Lack of supply leads to a lack of velocity, which leads to a lack of liquidity

How does one define supply with a divisible unit like bitcoin? Arguably, supply does not diminish, rather people use smaller units of bitcoins.

Re: China orders Bitcoin exchanges in capital city to close

#89

Post by jiggunjer »

vkou wrote: post #69
booleanbetrayal wrote: post #67

Earlier quoted context omitted.

It's a legitimate concern rooted in past precedent. I also think this is partly why you are seeing large expenditures aimed at green-tech, etc. If you can turn around some of the social ills (namely pollution), you can stem the flow a bit.

It's not just quality of life. A lot of wealthy people have at least some exposure to criminal behaviour, and are not keen on being swept up in white collar prosecutions.

Makes me wonder why Canada isn't run by triads yet.

Re: China orders Bitcoin exchanges in capital city to close

#90

Post by baddox »

wyc wrote: post #2

Right now, I like anything that helps normalize the white-hot hype of cryptocurrencies. There's some real utility in this technology, and we won't get to see it until companies are forced to make sustainable business cases and serve real customers. However, > A website set up by the Chinese central bank warned that cryptocurrencies are "increasingly used as a tool in criminal activities such as money laundering, drug…

That strikes me as an odd opinion. It sounds like you're saying that you appreciate an artificial decrease in cryptocurrencies' value or hype because you think there are other things artificially increasing it.
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