China orders Bitcoin exchanges in capital city to close • Hacker News Board

Re: China orders Bitcoin exchanges in capital city to close

#131

Post by Retric » Tue, Sep 19, 2017, 6:10 PM UTC

howlin wrote: post #92

flowctrl wrote: post #79

Earlier quoted context omitted.

Note that the Chinese government also demanded DVDs of all transaction records at the exchanges. This means that the Chinese citizens who moved their Bitcoin off of the exchange will have to answer to the bean counters. How could a clever Chinese citizen avoid government scrutiny of their cryptocurrency finances under these conditions? They could trade Yuan (cash) for BTC through an underground mechanism of some sort…

They could buy the hardware and power needed to mine new coins. This seems to be the simplest solution for someone who wants to get a couple thousand bitcoins without leaving a paper trail.

Buying Bitcoin ASIC miners creates a paper trail.

Manufacturing them in china let's you move money around, but you could also Manufacture anything else and just sell it in the west.

Re: China orders Bitcoin exchanges in capital city to close

#132

Post by baddox » Tue, Sep 19, 2017, 6:10 PM UTC

SomeStupidPoint wrote: post #127

baddox wrote: post #105

Earlier quoted context omitted.

Come on though, it's not that unreasonable to point it out, and it doesn't mean anyone who points it out is a menace to society like you seem to imply. It's not that different than when people (used to) talk about not paying sales tax on online purchases, but hopefully you wouldn't conclude that "petty criminality and fraud seems to run through the heart of ecommerce."

Isn't it precisely that? I'm actually confused by your example, because it looks like an example of precisely that happening (and then they were forced not to allow that). Lots of people flocked to e-commerce because of changing the ability to tax transactions. Lots of "technology disruptions" seem organized around allowing people to break the law on the broad scale by making enforcement complicated and infractions e…

No, I really do think that's a pretty unreasonable take on ecommerce. The sales tax loophole might have been nice, but I highly doubt that it was a significant cause of ecommerce success, and its elimination (in most US states, AFAIK) doesn't seem to be hurting ecommerce much.

It's really a perfect analogy. Apparently some people think that cryptocurrencies and ecommerce were both founded or significantly based on criminality, but I think there are some great advantages and opportunities with both that have nothing to do with crime. With cryptocurrencies, that's still largely a prediction, but with ecommerce I think it's ludicrous to claim that its success is owed to crime to any meaningful extent.

Re: China orders Bitcoin exchanges in capital city to close

#133

Post by tannerbrockwell » Tue, Sep 19, 2017, 6:13 PM UTC

tboyd47 wrote: post #128

tannerbrockwell wrote: post #118

Earlier quoted context omitted.

The miner's mining Rig's are plugged into the state controlled power grid. If China wants to control the means of production, they simply follow the power hogs, remember we're talking about operations that are industrial scale. The small players have 500+ mining rigs alone. The means of production will be seized. Existing coins are a toss-up. Although since the penalty could be a death sentence, I'm sure the business…

You are still thinking about this in terms of a physical object. Miners don't "produce" anything except in the same sense that I "produce" the answer to a crossword puzzle. You can take away my pencil but it doesn't make the puzzle unsolvable.

Dude. The mining rigs are physical. All I said was that China will seize the 'means of production' so they control the manufacture domestically. It's a phrase that was used a lot to describe the basic tenets of different types of economy and harkens to a time when industrialization was a major focus of the first world and people trying to find their place in an industrial society. The "means of production" phrase has been distilled and entered the zeitgeist as a way to talk about communism.

Re: China orders Bitcoin exchanges in capital city to close

#134

Post by thomasz » Tue, Sep 19, 2017, 6:18 PM UTC

antonislav wrote: post #99

pja wrote: post #62

Earlier quoted context omitted.

1) Shorting into a bubble is usually a terrible idea. 2) The only realistic way to short BTC is to do so via a very small list of exchanges. Even if you trust them (which, given the history of cryptocurrency exchanges is hardly a given) the borrow cost is huge: there's no way you could reasonably make this kind of macro BTC bet. The combination of these two realities makes the "If you don't believe the price, you oug…

Could you expand on point 1? Or maybe point to some references?

“The market can stay irrational longer than you can stay solvent.” - Keynes

Re: China orders Bitcoin exchanges in capital city to close

#135

Post by namelost » Tue, Sep 19, 2017, 6:19 PM UTC

DINKDINK wrote: post #126

schintan wrote: post #107

Earlier quoted context omitted.

If China is able to do it, wouldn't Bitcoin lose all its value ?

No. Miners can only double spend transactions if they have > 50 % of the hash rate. The only purpose of miners is to add proof of work to in exchange for new coins that users value. If the proof of work is on a chain that contains valid transactions and conforms to consensus rules, it'll be valuable.

Bitcoin is not the only game in town, there would be a mad scramble to Ethereum et al.

Re: China orders Bitcoin exchanges in capital city to close

#136

Post by partiallypro » Tue, Sep 19, 2017, 6:21 PM UTC

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.

There is no argument, it's a fact. There is capital flight out of China. Their FX reserves have plummeted because they are trying to support the Yuan from dropping off the side of a cliff.

Re: China orders Bitcoin exchanges in capital city to close

#137

Post by tannerbrockwell » Tue, Sep 19, 2017, 6:22 PM UTC

flyGuyOnTheSly wrote: post #123

stefano wrote: post #83

Earlier quoted context omitted.

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

Then you fork to proof of stake or another proof that mining-power alone cannot control.

I agree that centralization is antithetical to Bitcoin, game theory says that it is to China's advantage to mine for profit. I believe they will want to mine and hodl, vs sell immediately to cover costs. Think of it as their strategic crypto reserve... how much is enough to float an e-yuan?

Re: China orders Bitcoin exchanges in capital city to close

#138

Post by pja » Tue, Sep 19, 2017, 6:25 PM UTC

antonislav wrote: post #99

pja wrote: post #62

Earlier quoted context omitted.

1) Shorting into a bubble is usually a terrible idea. 2) The only realistic way to short BTC is to do so via a very small list of exchanges. Even if you trust them (which, given the history of cryptocurrency exchanges is hardly a given) the borrow cost is huge: there's no way you could reasonably make this kind of macro BTC bet. The combination of these two realities makes the "If you don't believe the price, you oug…

Could you expand on point 1? Or maybe point to some references?

Once a security has entered bubble territory, by definition its price has become disassociated from any underlying fundamentals - bubbles form when rising prices drive positive sentiment which pulls in fresh buyers who buy into the rising price story, driving the price higher which in turn draws in more buyers in a self feeding cycle that only ends when the supply of fresh buyers dries up.

Because this is a self feeding cycle, the price can double & redouble from almost any point if the "story" is good enough. So you can be dead right about a given asset being in a bubble, but if you short it the odds are that you're going to get painfully stopped out long before the bubble collapse finally happens. As Keynes said, prices can remain irrational longer than you can remain solvent: The history of investing is littered with individuals who were right, but lost their capital because they were simply too early.

Re: China orders Bitcoin exchanges in capital city to close

#139

Post by ComodoHacker » Tue, Sep 19, 2017, 6:26 PM UTC

stefano wrote: post #83

ComodoHacker wrote: post #74

Earlier quoted context omitted.

>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.

This would be a good test for the whole concept of decentralized cryptocurrency and Bitcoin design in particular.

Re: China orders Bitcoin exchanges in capital city to close

#140

Post by neya » Tue, Sep 19, 2017, 6:28 PM UTC

I have a different technological perspective on this. Having traveled and lived in Asian, Chinese-majority cities/countries, this is a typical Chinese govt. move. In China, WeChat is a dominant player (by Tencent), a LOT of the transactions in China happen through WeChat, which offers seamless payments integration. The penetration is so strong that even poor, road-side sellers accept money through WeChat. Almost everyone has a WeChat account.

This in my personal opinion - is to prevent BitCoin from posing a threat to their homegrown technology industry, which is honestly no match for what we have in the Americas.

List of banned companies:

Google - Because they want to protect their clone Baidu.

Twitter/Facebook - Because they want to protect their clone Weibo.

YouTube - Because they want to protect their clone YouKu.

.

(it's a long list)

BitCoin banned - Because they want to protect their homegrown WeChat.

Just my opinion.