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China banning bitcoin would have a huge negative impact on cryptocurrencies worldwide. But what if... that's exactly what the chinese government wants? What if

China banning bitcoin would have a huge negative impact on cryptocurrencies worldwide. But what if... that's exactly what the chinese government wants? What if this is all a scheme to short sell bitcoin?

throwaway2048 9y ago
Short selling requires a counter party. There is no short selling counter party in the BTC ecosystem that holds anywhere close to the amount that would make such a move worth it. Even if the moves china makes somehow extracted the entire wealth of the bitcoin economy, it wouldn't make much sense for them to bother.
- howscrewedami 9y ago
  Nice try, chinese government.
splintercell 9y ago
Lol reminds me of this meme: http://imgur.com/a/KDwtE http://imgur.com/a/KDwtE
- howscrewedami 9y ago
  It's an Older Meme, Sir. But It Checks Out.
  - isubkhankulov 9y ago
    yet still relevant
matt4077 9y ago
Countries aren't usually in the business of manipulating small, illiquid markets for negligible financial profit.
- howscrewedami 9y ago
  BitCoin isn't illiquid. There are numerous people out there making a living out of it.
  - isubkhankulov 9y ago
    liquidity in this case is market liquidity. like how much or little one can sell without moving the price and/or slipping your own price. Bitcoin compared to most other currencies and many stocks, has fairly low fragmented worldwide liquditity.
  - ericd 9y ago
    And China is one of the largest economies in the world, with well over a billion people making a living in it. The profit from shorting it would not even a bug splatter on the windshield of their economy. The evasion of capital controls is a much, much larger concern for them.
    - mahranch 9y ago
      And it should be a larger concern for bitcoin proponents, too. Imagine if China decided to wage a covert war on bitcoin. I mean, is it really so hard to believe that China wouldn't like bitcoin because it literally (not figuratively) runs antithesis to their own fiscal policies? And how would they run a covert war against it? An open war or public attack would immediately raise the defenses of everyone involved, from miners to developers, to bitcoin holders. But what if they played nice while all the while poisoning the well or setting the stage to gain trust. They could do this through third party companies (cough bitmain cough) which could cause damage to bitcoin by delaying vital upgrades and sowing the seeds of uncertainty and doubt.
  - lawless123 9y ago
    bitcoin at the moment supports 7 transactions a second.. that seems quite illiquid
    - 9y ago
justicezyx 9y ago
So everything Chinese government does, eventually leads to some malicious grand scheme...
Analemma_ 9y ago
The Chinese government holds $3.5 trillion in U.S. treasuries. The profit from "short-selling bitcoin" wouldn't even qualify as a rounding error to them.
- endless1234 9y ago
  If we assume the Chinese government manages to short ALL current bitcoin (16.5 million), and that the gain from shorting will be $2000 per BTC (current value is about ~2300), it'll still not be even a percentage of 3.5 trillion.
- SimonPStevens 9y ago
  It might be insignificant to China the country. But a government is made up of individuals. It's entirely possible that in an already corrupt environment, the dozen or so individuals on the crypto committee may be convinced to make decision that benefit them personally. Make a few impactful decisions at your day job, block a few exchanges, short bitcoin personally, profit personally. Wouldn't be hard to make a million or two if you knew of a price fall coming up in advance, there are plenty of ways to get leverage on the bitcoin markets these days.
  - dreamthtwasrome 9y ago
    Seems like the operative gambit would be one-or-more miner/exchange pays govt official(s) lots of money to "crackdown" on BTC, except not as much on them. win-win
petre 9y ago
China is shutting down miners, Yet the price is still going through the roof.
runeks 9y ago
Why would I care whether bitcoins are illegal in China? The Bitcoin network will adjust to the reduction in hash rate, and after that it will impact my use of Bitcoin as much as China's great firewall impacts my use of the internet. China is an oppressive regime. It's standard practice for oppressive regimes to ban what they feel they can't control. If Bitcoin ever becomes really useful, they will be forced to ban it -- if they want to maintain monetary control.

throwaway2048 9y ago

Short selling requires a counter party. There is no short selling counter party in the BTC ecosystem that holds anywhere close to the amount that would make such a move worth it. Even if the moves china makes somehow extracted the entire wealth of the bitcoin economy, it wouldn't make much sense for them to bother.

howscrewedami 9y ago
Nice try, chinese government.

splintercell 9y ago

Lol reminds me of this meme: http://imgur.com/a/KDwtE http://imgur.com/a/KDwtE

howscrewedami 9y ago
It's an Older Meme, Sir. But It Checks Out.
- isubkhankulov 9y ago
  yet still relevant

matt4077 9y ago

Countries aren't usually in the business of manipulating small, illiquid markets for negligible financial profit.

howscrewedami 9y ago
BitCoin isn't illiquid. There are numerous people out there making a living out of it.
- isubkhankulov 9y ago
  liquidity in this case is market liquidity. like how much or little one can sell without moving the price and/or slipping your own price. Bitcoin compared to most other currencies and many stocks, has fairly low fragmented worldwide liquditity.
- ericd 9y ago
  And China is one of the largest economies in the world, with well over a billion people making a living in it. The profit from shorting it would not even a bug splatter on the windshield of their economy. The evasion of capital controls is a much, much larger concern for them.
  - mahranch 9y ago
    And it should be a larger concern for bitcoin proponents, too. Imagine if China decided to wage a covert war on bitcoin. I mean, is it really so hard to believe that China wouldn't like bitcoin because it literally (not figuratively) runs antithesis to their own fiscal policies? And how would they run a covert war against it? An open war or public attack would immediately raise the defenses of everyone involved, from miners to developers, to bitcoin holders. But what if they played nice while all the while poisoning the well or setting the stage to gain trust. They could do this through third party companies (cough bitmain cough) which could cause damage to bitcoin by delaying vital upgrades and sowing the seeds of uncertainty and doubt.
- lawless123 9y ago
  bitcoin at the moment supports 7 transactions a second.. that seems quite illiquid
  - 9y ago

justicezyx 9y ago

So everything Chinese government does, eventually leads to some malicious grand scheme...

Analemma_ 9y ago

The Chinese government holds $3.5 trillion in U.S. treasuries. The profit from "short-selling bitcoin" wouldn't even qualify as a rounding error to them.

endless1234 9y ago
If we assume the Chinese government manages to short ALL current bitcoin (16.5 million), and that the gain from shorting will be $2000 per BTC (current value is about ~2300), it'll still not be even a percentage of 3.5 trillion.
SimonPStevens 9y ago
It might be insignificant to China the country. But a government is made up of individuals. It's entirely possible that in an already corrupt environment, the dozen or so individuals on the crypto committee may be convinced to make decision that benefit them personally. Make a few impactful decisions at your day job, block a few exchanges, short bitcoin personally, profit personally. Wouldn't be hard to make a million or two if you knew of a price fall coming up in advance, there are plenty of ways to get leverage on the bitcoin markets these days.
- dreamthtwasrome 9y ago
  Seems like the operative gambit would be one-or-more miner/exchange pays govt official(s) lots of money to "crackdown" on BTC, except not as much on them. win-win

petre 9y ago

China is shutting down miners, Yet the price is still going through the roof.

runeks 9y ago

Why would I care whether bitcoins are illegal in China? The Bitcoin network will adjust to the reduction in hash rate, and after that it will impact my use of Bitcoin as much as China's great firewall impacts my use of the internet. China is an oppressive regime. It's standard practice for oppressive regimes to ban what they feel they can't control. If Bitcoin ever becomes really useful, they will be forced to ban it -- if they want to maintain monetary control.