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

Re: China orders Bitcoin exchanges in capital city to close

#21

Post by harwoodleon » Tue, Sep 19, 2017, 4:02 PM UTC

Bitcoin and for that matter all crypto currency is a libertarian ideal.

Libertarian ideals do not fit in communist societies. Regulation was always coming, as even liberal societies regulate.

But regulation is only there to keep the established order. The established order is very afraid of crypto right now in the same way the music industry freaked out over MP3.

I can't help it, but I get annoyed when crypto is branded with illegal activities like terrorism, fraud etc. No one talks about USD being used in the same way!

Re: China orders Bitcoin exchanges in capital city to close

#22

Post by tannerbrockwell » Tue, Sep 19, 2017, 4:02 PM UTC

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 cornerstone of China’s development strategy.[2] Bitcoin is a technology and has already come along way from the Satoshi whitepaper. State-Owned Enterprises will be emphasized as they strengthen SOEs as national champions at home and abroad and protect their interests in this emerging blockchain space. The goal of the One Belt, One Road (OBOR) initiative is to facilitate access to natural resources and encourage economic development in China’s poorer western provinces.

While such an initiative can continue without bitcoin, it is interesting to think of how OBOR would be strengthened on the world stage with an instantly settled mechanism such as bitcoin behind its infrastructure.

[1] https://en.wikipedia.org/wiki/19th_National_Congress_of_the_...

[2] https://www.uscc.gov/sites/default/files/Research/The%2013th...

Re: China orders Bitcoin exchanges in capital city to close

#23

Post by QAPereo » Tue, Sep 19, 2017, 4:03 PM UTC

Akujin wrote: post #20

korzun wrote: post #3

But.. but.. an 'analyst' for CoinDesk said this was normal and the exchanges will just need to get a license and China welcome them back with open arms. The bullshit artists that already 'invested' in this scheme will now tell you that China did not matter and the people under them will parrot it. Anybody that disagrees simply doesn't understand Bitcoin or just mad that they could not get on the choo-choo train at th…

Some of us who have been holding since Bitcoin was worth $2 are laughing at you.

Until you cash out, I'd wait on the laughing.

Re: China orders Bitcoin exchanges in capital city to close

#24

Post by paulsutter » Tue, Sep 19, 2017, 4:04 PM UTC

psyc wrote: post #17

paulsutter wrote: post #7

Bitcoin price impact is the best way to gauge the significance of any particular news (this? not much): https://finance.yahoo.com/quote/BTCUSD=X/

This isn't new news. It was suspected/known 2 weeks ago and it tanked the price from ~4700 to ~3000, before it rebounded.

exactly - these changes were a bigger concern two weeks ago, and all these new stories are now noise

We'll know when something meaningful happens by the price impact

Re: China orders Bitcoin exchanges in capital city to close

#25

Post by eloff » Tue, Sep 19, 2017, 4:05 PM UTC

dreen wrote: post #18

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 used it to transfer money between countries with an exchange rate better than any other available. Surely this is not illegal?

It is in China now. Russia too IIRC. Probably several other countries that impose capital controls.

In the west this is legal, but the bank may still ask you where the money came from under their enforcement of laws like knowing your customer and money laundering controls.

Tax agencies may also get involved if there is automatic reporting.

Re: China orders Bitcoin exchanges in capital city to close

#26

Post by Akujin » Tue, Sep 19, 2017, 4:05 PM UTC

QAPereo wrote: post #23

Akujin wrote: post #20

Earlier quoted context omitted.

Some of us who have been holding since Bitcoin was worth $2 are laughing at you.

Until you cash out, I'd wait on the laughing.

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 :)

Re: China orders Bitcoin exchanges in capital city to close

#27

Post by jaxytee » Tue, Sep 19, 2017, 4:05 PM UTC

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…

Over the past couple of years, China has lost around a trillion dollars in foreign reserves (a 4 trillion dollar cash pile earned from exporting all those made in china goods) to capital flight. Whenever a Chinese citizen or business takes yuan and exchanges them for a foreign asset, China's fx cash pile is diminished. If china's "savings account" is bled dry, it would have to choice but to devalue and print its currency to handled some of it local fiscal issues.

To prevent "rocking the boat" with a currency devaluation before the Communist Party Meeting this fall, China has locked down it's capital account by blocking foreign company acquisitions, repatriation by multinational corporations (think blocking Apple's yuan accounts from withdrawals to USD), Toronto real estate purchases, etc.

Bitcoin was an unregulated and popular means of capital flight. It was just a matter of time before they cracked down on it as well.

Re: China orders Bitcoin exchanges in capital city to close

#28

Post by lordnacho » Tue, Sep 19, 2017, 4:06 PM UTC

You gotta wonder if they will go after the miners. I suppose other cryptos have dealt with this issue, and one with the right properties will emerge, but BTC requires huge warehouses full of computers to mine, so the decentralisation part of the argument is a bit flawed.

And the big miners happen to be in China, which is pretty convenient for the government. Not sure exactly how much of capacity is in the country, but if a lot of it gets shut down I think there's a 2 week reset window before the difficulty can come back down. If it's a large proportion it will significantly lengthen the time between blocks.

Also in the bigger picture, if illicit movements bother the Chinese, will they pressure other countries to stop allowing BTC?

Re: China orders Bitcoin exchanges in capital city to close

#29

Post by skummetmaelk » Tue, Sep 19, 2017, 4:07 PM UTC

harwoodleon wrote: post #21

Bitcoin and for that matter all crypto currency is a libertarian ideal. Libertarian ideals do not fit in communist societies. Regulation was always coming, as even liberal societies regulate. But regulation is only there to keep the established order. The established order is very afraid of crypto right now in the same way the music industry freaked out over MP3. I can't help it, but I get annoyed when crypto is bran…

>But regulation is only there to keep the established order.

That's a very narrow minded view of what regulation is good for.

Re: China orders Bitcoin exchanges in capital city to close

#30

Post by QAPereo » Tue, Sep 19, 2017, 4:09 PM UTC

Akujin wrote: post #26

QAPereo wrote: post #23

Earlier quoted context omitted.

Until you cash out, I'd wait on the laughing.

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 :)

For what it's worth, I hope that you make that fortune.