China Bans Financial Companies From Bitcoin Transactions • Hacker News Board

Re: China Bans Financial Companies From Bitcoin Transactions

#51

Post by ars » Thu, Dec 05, 2013, 10:26 AM UTC

ethana wrote: post #45

namespace wrote: post #24

Earlier quoted context omitted.

There is a great post on r/bitcoin on this topic by Erik Voorhees. He talks about the value of network which gives bitcoin its value. A great read: http://www.reddit.com/r/Bitcoin/comments/1rxmk3/my_open_lett...

Networks come and go. Hard money, however, can still be found on hundred-years-old wreckage somewhere under the ocean.

That's because you happen to value gold just like someone else did 100 years ago.

But there are plenty of other forms of money that have vanished, from stone wheels, to shells, to papers. And all of those would be considered hard money.

Re: China Bans Financial Companies From Bitcoin Transactions

#52

Post by galactus » Thu, Dec 05, 2013, 10:26 AM UTC

SwellJoe wrote: post #22

debugunit wrote: post #17

Earlier quoted context omitted.

The CNY price dropped from around 7000 to below 5000 briefly, as I was watching it on www.bitcoinaverage.com. That's a 28% drop in a few minutes, which surely qualifies as a plunge. It does seem to be recovering, which makes sense since the announcement wasn't particularly aggressive.

We've seen similarly large drops as recently as two weeks ago. This kind of volatility is still normal for Bitcoin. I don't get why folks expect it to be more stable than it is right now. It simply can't be...there's too much new adoption and too much uncertainty and to much evolution happening in the market. We're going to see more drops like this in the future; we've seen it on no news, on more than one occasion.

More than anything else, there is just too much speculation. Much much more than adoption of bitcoin as a currency.

Re: China Bans Financial Companies From Bitcoin Transactions

#53

Post by gte525u » Thu, Dec 05, 2013, 10:26 AM UTC

molf wrote: post #29

ars wrote: post #19

Pretty disappointed in this statement from Greenspan: “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” All money has no intrinsic value, including gold. Things have value because other people want them. That's it. People want bitcoin, then it has value. Pretty much the only thing with i…

Intrinsic value (in the context of finance) usually refers to the value of something when not used as investment or money. Gold has intrinsic value because you can use it for jewellery and electronics. A bitcoin has no intrinsic value because you only have it to get something else in return later. Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical mo…

The quote is bit out of context. He was asked if bitcoin could be the new gold.

http://www.bloomberg.com/video/greenspan-on-bitcoin-i-guess-...

Re: China Bans Financial Companies From Bitcoin Transactions

#54

Post by salient » Thu, Dec 05, 2013, 10:27 AM UTC

rms wrote: post #44

From the Google translation of the original source: "However, Bitcoin transaction as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in the premise own risk." The new bitcoin policy here isn't that much more conservative than the USA's bitcoin policy, and Beijing just legalized bitcoin for ordinary citizen gamblers, speculators, savers, and options traders! This is a good…

I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign?

Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not kill Bitcoin, but it would seriously slow down its growth and liquidity if they made it illegal for exchange companies to exchange Bitcoin.

Re: China Bans Financial Companies From Bitcoin Transactions

#55

Post by asg » Thu, Dec 05, 2013, 10:31 AM UTC

molf wrote: post #29

ars wrote: post #19

Pretty disappointed in this statement from Greenspan: “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” All money has no intrinsic value, including gold. Things have value because other people want them. That's it. People want bitcoin, then it has value. Pretty much the only thing with i…

Intrinsic value (in the context of finance) usually refers to the value of something when not used as investment or money. Gold has intrinsic value because you can use it for jewellery and electronics. A bitcoin has no intrinsic value because you only have it to get something else in return later. Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical mo…

The intrinsic value of paper currency, I suppose comes from the promise of the central bank to pay its value on demand. In the 'good old days' this was a promise to pay its value in gold, but now its in the settlement of your debt. In Bitcoin that promise is peer-to-peer. Whether that makes it a successful currency is a fascinating, but open, question.

Re: China Bans Financial Companies From Bitcoin Transactions

#56

Post by BrokenPipe » Thu, Dec 05, 2013, 10:32 AM UTC

wavesounds wrote: post #28

ars wrote: post #19

Pretty disappointed in this statement from Greenspan: “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” All money has no intrinsic value, including gold. Things have value because other people want them. That's it. People want bitcoin, then it has value. Pretty much the only thing with i…

Dollars have intrinsic value in that you can burn them to keep warm, gold you can make things out of, Bitcoins have no possible use outside of being a currency, thus no intrinsic value.

I certainly can't burn the dollars in my bank account.

Not directly anyway.

I have to go somewhere and take cash out which then I can burn, assuming the bank has that kind of money available when I attempt it and assuming I will be allowed to take it out.

Furthermore in many places such activity would be illegal.

Anyone arguing about Bitcoin without admitting that there is demand and basing everything on outdated/flowed theories is bound to be wrong with their predictions.

Re: China Bans Financial Companies From Bitcoin Transactions

#57

Post by ashray » Thu, Dec 05, 2013, 10:32 AM UTC

salient wrote: post #54

rms wrote: post #44

From the Google translation of the original source: "However, Bitcoin transaction as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in the premise own risk." The new bitcoin policy here isn't that much more conservative than the USA's bitcoin policy, and Beijing just legalized bitcoin for ordinary citizen gamblers, speculators, savers, and options traders! This is a good…

I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign? Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not ki…

The restrictions appear to be placed on banks and other financial institutions creating any bitcoin related instruments (ETFs, etc.) or dealing directly with bitcoin (eg. exchange RMB for BTC or the reverse). Also, it would essentially prevent a bank using it's reserve for a bitcoin investment.

Exchanges can still operate as exchanges and can continue to have bank accounts as long as said banks do not deal themselves in bitcoins.

Individuals and businesses are free to use bitcoin. This is actually very good news. The government was silent all this while and though they haven't said "Bitcoin is the new reserve currency", the Chinese stance is essentially the exact same stance that the US Senate took last month. I'm sure US banks also cannot deal with something that isn't a 'valid currency'.

This is a much better translation of the bitcoin notice: http://www.reddit.com/r/Bitcoin/comments/1s5hzl/my_human_tra...

Re: China Bans Financial Companies From Bitcoin Transactions

#58

Post by jc123 » Thu, Dec 05, 2013, 10:33 AM UTC

w0utert wrote: post #37

molf wrote: post #29

Earlier quoted context omitted.

Intrinsic value (in the context of finance) usually refers to the value of something when not used as investment or money. Gold has intrinsic value because you can use it for jewellery and electronics. A bitcoin has no intrinsic value because you only have it to get something else in return later. Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical mo…

>> Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confused by that quote. USD/EUR/JPY currency (either physical as bank notes and coins, or electronic) has intrinsic value because it is almost universally accepted, taxable, and backed by debt that (at least in theory) will have to be repaid at some point in time. B…

Well said IMO. It's been a while since tulip mania and could bitcoin be a modern day version?

Same disclaimer as above.

Re: China Bans Financial Companies From Bitcoin Transactions

#59

Post by rajacombinator » Thu, Dec 05, 2013, 10:33 AM UTC

ars wrote: post #19

Pretty disappointed in this statement from Greenspan: “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” All money has no intrinsic value, including gold. Things have value because other people want them. That's it. People want bitcoin, then it has value. Pretty much the only thing with i…

Why would you be disappointed? Greenspan's true colors are well known. (Hint: green not gold.)

Re: China Bans Financial Companies From Bitcoin Transactions

#60

Post by alphonse23 » Thu, Dec 05, 2013, 10:34 AM UTC

salient wrote: post #54

rms wrote: post #44

From the Google translation of the original source: "However, Bitcoin transaction as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in the premise own risk." The new bitcoin policy here isn't that much more conservative than the USA's bitcoin policy, and Beijing just legalized bitcoin for ordinary citizen gamblers, speculators, savers, and options traders! This is a good…

I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign? Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not ki…

I think it's a bad sign for the Chinese, not the bitcoin. If the central bank doesn't regulate it's trade, they're slowing down the time it takes for Chinese to trade compared to other countries.

It just means only private wealthy companies can facilitate the trades -- which is dangerous in itself. By opting out of controlling bitcoin transactions, I think the Republic of China is in some ways harming its only citizens. People will trade btc whether the banks support it or not, the chinese gov can help regulate this, but if they choose not to, they're hurting their own citizens.