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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

#211

Post by coryfklein »

XR0CSWV3h3kZWg wrote: post #188
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. I don't like the idea of 2/3rds of the hashpower to be owned by one player. 50% hash power means not only the ability to double spend, but also to censor txs. If someone else mines a block they don't like they can just ignore that block and eventually get the longer chain.

> 50% hash power means not only the ability to double spend, but also to censor txs. If someone else mines a block they don't like they can just ignore that block and eventually get the longer chain.

This is not true if you just have 50%. You'd have to consistently win the next block for double spending to be reliable, and users would just be wary to wait for more confirmations before accepting payment.

Besides, if China takes over all bitcoin exchanges and mining in China, that changes the "bad news" to huge positive news and basically a Bitcoin endorsement by a major world power. Once that happens the value of bitcoin would likely increase at a rate such that maintaining even a 50% hold on hash power would be difficult for a single player.

Re: China orders Bitcoin exchanges in capital city to close

#212

Post by coryfklein »

XR0CSWV3h3kZWg wrote: post #190
DINKDINK wrote: post #126

Earlier quoted context omitted.

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.

If you control >50% of the hash power you can also censor tx by ignoring any block that contains them.

Same story if you control 1% of hash power. Anyone can ignore any block, but you can't completely block a transaction unless you prevent it from being included in ANY block. Even if 90% of the hash power is blocking your transactions it just means it takes 10x longer for your transaction to go through.

Re: China orders Bitcoin exchanges in capital city to close

#213

Post by tonfa »

yourapostasy wrote: post #210
tonfa wrote: post #194

Earlier quoted context omitted.

Stock broker with FX, market spread and low fee, total result can easily be less than 0.1% (and even a lot less most likely closer to 0.01%).

How do I get in touch with a "Stock broker with FX"? That's not a term I'm familiar with unfortunately, and searching that string turns up either FX brokers, or FX trading platforms. I've spoken with my US equities/funds brokerage firm, and they have an FX desk, but they're still more expensive than the dedicated FX broker I found and currently work with. Before that, I was regularly raked by my US bank for 4-6% off…

https://www.interactivebrokers.com/en/index.php?f=commission...

(Not an endorsement in any way and I'm sure there are others).

Fees are min($2, 0.002%), typical spread is a few pip or much less (eg. EURUSD at the moment: 1.20015 (sell) 1.20020 (buy)). But you'll also need a bank account in both currency most likely.

edit: maybe a downside, but there's a min $10/month activity fee at IB if you have less than 100k holdings (but your transaction fees count against that). But as I said, I'm sure IB isn't the only place with those offerings.

Re: China orders Bitcoin exchanges in capital city to close

#214

Post by pja »

pja wrote: post #138
antonislav wrote: post #99

Earlier quoted context omitted.

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 feed…

& if you want evidence of this cycle in action for BitCoin, try this:

“The price of BitCoin has a 91% correlation with Google searches for BitCoin” http://uk.businessinsider.com/bitcoin-price-correlation-goog...

Obviously BTC can be in a bubble & whilst still having real value - the two things are not necessarily connected. (Although having a good future value story is helpful for a bubble to form in the first place I would argue.)

Re: China orders Bitcoin exchanges in capital city to close

#215

Post by SomeStupidPoint »

baddox wrote: post #132
SomeStupidPoint wrote: post #127

Earlier quoted context omitted.

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 cr…

> its elimination (in most US states, AFAIK) doesn't seem to be hurting ecommerce muc

This seems to be the crux of your argument, and doesn't necessarily follow. Just because it was instrumental for the rise doesn't mean it will cause a fall if its removed at a significantly later point in time.

A support can be essential for building a bridge, even though the bridge stands without it when completed. I think tax evasion was precisely that bridge support for online commerce.

> 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.

These two positions aren't contrary, and I'm curious why you're presenting them as if they were -- criminality is incentive to switch services, which are then sticky because they do provide features. However, pretending that those features is what caused the initial switch is revisionist.

> ecommerce I think it's ludicrous to claim that its success is owed to crime to any meaningful extent

I think claiming its success (and certainly that of current players) doesn't have anything to do with early criminality is absurd.

That being said, no one is talking about its present generator of value, we're talking about what created the incentives that led to this outcome two decades ago.

Re: China orders Bitcoin exchanges in capital city to close

#216

Post by tboyd47 »

freeloop2 wrote: post #200
tboyd47 wrote: post #149

Earlier quoted context omitted.

But that would just create an invalid side chain and result in all the miners' hash power being wasted. https://bitcoin.stackexchange.com/questions/55316/what-happe...

Your link doesn't address the question. It's about an invalid transaction within the block, not the refusal to place a particular transaction into one. With over 50% of mining power you can definitely do this.

https://en.bitcoin.it/wiki/Invalid_block

> Clients will ignore invalid blocks when determining which chain is difficultywise-longest. Mining clients will not build on top of invalid blocks. Clients will not propagate invalid blocks (or invalid transactions).

Proof of work does not mean full nodes trust miners blindly. It only means they prefer the longest chain that follows the rules.

Like I said, yes, with 50% mining power you can double-spend all you want. But other nodes know what you are doing, expel you from the network, and discard your work, just as if you had 25% of hash power or 0.1%. The Bitcoin blockchain is not a democratic system where the majority always wins.

Re: China orders Bitcoin exchanges in capital city to close

#217

Post by tboyd47 »

XR0CSWV3h3kZWg wrote: post #189
tboyd47 wrote: post #119

Earlier quoted context omitted.

But they still can't change the blockchain. And there would still be miners outside of China.

If you control 50 + epsilon percent of the hash power you can censor blocks at will. You can ignore every block that anyone else makes and still have the longest chain.

Except for the fact that they can still get confirmation from the other 50 - epsilon percent.

Having 51% of hash power doesn't mean you mine 100% of blocks. That's not how Bitcoin works. With 51% you will probably mine around 51%.

Re: China orders Bitcoin exchanges in capital city to close

#218

Post by eloff »

flatfilefan wrote: post #193
eloff wrote: post #186

Earlier quoted context omitted.

https://www.bloomberg.com/news/articles/2016-04-28/russian-l...

this has never become a law afaik

Not yet anyway, laws take time. I hope it doesn't become law (and I suspect it's too extreme for that, even for Russia.) But it gives you an idea of the way things are trending there.

Re: China orders Bitcoin exchanges in capital city to close

#219

Post by tboyd47 »

XR0CSWV3h3kZWg wrote: post #191
tboyd47 wrote: post #109

Earlier quoted context omitted.

Miners have very little power over Bitcoin as a whole. They are constrained both by Bitcoin's rules and economics. If they mine invalid blocks or optimize for something other than fees, the operation will turn unprofitable. If they just stop mining, the mining difficulty will adjust and suddenly ASICs will not be needed to turn a profit. There is a delicate balance in Bitcoin, currently tipped slightly in their favor…

Miners obviously are okay taking a hit as there are plenty that are working on the less profitable BCH chain.

BCH is roughly on par with BTC in terms of mining profitability.

https://cash.coin.dance/blocks/profitability

Re: China orders Bitcoin exchanges in capital city to close

#220

Post by tboyd47 »

TeMPOraL wrote: post #70
tboyd47 wrote: post #63

Earlier quoted context omitted.

So what would be an example of an economic rule that's needlessly oppressive?

I started with an assertion that money, in practice, is synonymous to power. I wasn't thinking about just economic rules. But to pick something in big part economical, I'd say the war on drugs can be an example of a rule that's widely considered stupid, needlessly oppressive, and bad both economically and morally.

I'm not an anarchist, but I do think that the everyday person (especially in third-world countries) could use an escape hatch from the global economy, and it just so happens that Bitcoin fills that role perfectly.

Governments will always be able to tax people and they can tax them in whatever currency they want. This requires people to use their currency. So I don't think that Bitcoin poses any real threat to the powers that be except in harsh circumstances like Venezuela. In some situations, Bitcoin and other cryptos can actually help the government gain power, like in Palestine's situation.

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