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A little context for this. China cracked down on Bitcoin exchanges earlier this year and stopped all withdrawals of Bitcoin from exchanges. Reports just in th

A little context for this. China cracked down on Bitcoin exchanges earlier this year and stopped all withdrawals of Bitcoin from exchanges. Reports just in the past few days are that they have finally re-enabled Bitcoin withdrawals at the major exchanges in China. Some mining operations are closely linked to exchanges so perhaps these shutdowns are related to the scrutiny of the exchanges. Also shutting down one miner just makes the remaining miners more profitable in the long term. In the short term though ~1 week it has the effect of reducing the rate at which Bitcoins are generated until the difficulty re-target is reached.

modeless 9y ago
Seems to me as though Bitcoin mining is kind of a backdoor way to move Chinese money offshore circumventing capital controls. Pay for your electricity in yuan, then sell your Bitcoin anywhere in the world. In fact I speculate that may be the main reason Bitcoin mining is so popular there; it's essentially subsidized by people wanting to move money offshore. Perhaps this is cracking down on that? There's so little detail in the article it's impossible to tell.
- chenster 9y ago
  100% correct.
  - modeless 9y ago
    Do you have some knowledge of people doing this?
- Scoundreller 9y ago
  I suspect the same when I buy goods from China on Ebay: The money is going to an ex-China Paypal account. I may very well be paying less than cost because $1 outside is China is worth x%+ than inside of China.
  - ada1981 9y ago
    Curious what the opportunities to help folks in China do this and profit as a person in the USA?
    - ww520 9y ago
      Buy in bulks with discount. Pay to Swiss accounts. :)
- Animats 9y ago
  Yes. Not only that, it gets good tax and capital flow treatment in China, because it's considered "exporting". The big Bitcoin question for the last several years has been "what will the PBOC do"? So far, they've discouraged the use of Bitcoin for transactions within China, and stopped some speculative practices at Bitcoin exchanges, but haven't really cracked down.[1] Back in February, the PBOC announced a "study period" while they decided what to do. [1] https://www.bloomberg.com/news/articles/2017-02-10/china-bitcoin-exchanges-halt-withdrawals-after-central-bank-talk https://www.bloomberg.com/news/articles/2017-02-10/china-bit...
  - runeks 9y ago
    I would be surprised if the Chinese government doesn't ban Bitcoin at some point. They don't allow their people free access to information, why would they allow freedom in monetary matters? They certainly doesn't seem inhibited in banning things that may pose a threat to themselves. Bitcoin just doesn't pose much of a threat yet, not until it's generally useful as a payment system and for financing -- thus comprising an actual competition to the PBOC and their member banks.
    - _coldfire 9y ago
      As long as all the entry/exit points are regulated and in line with the government, Bitcoin is perfect for a country obsessed with capital controls. Far easier to monitor than cash.
    - zabana 9y ago
      > They don't allow their people free access to information, why would they allow freedom in monetary matters? The US and other major "democracies" out there are already working on restricting access to information. I believe it's called "Fake News" ...
      - lawless123 9y ago
        Are you saying you don't believe Hillary drags children under their bed and eats them?
- aswanson 9y ago
  Speaking of which...for an American citizen, is moving coins to dollars taxed at a capital gains rate? How can the government know how much value was accrued?
  - modeless 9y ago
    Yes. Same as any other capital gains, they trust you to report it, and audit you if they don't believe you.
- mahranch 9y ago
  > Seems to me as though Bitcoin mining is kind of a backdoor way to move Chinese money offshore Which is why China is trying desperately to get control. They limit how much money their citizens can move around, whether it's Yuan, stocks or foreign currency, everything is limited and monitored. Bitcoin is no exception. Except, I think it's more nefarious than that. Bitcoin stands for everything China is against. A (mostly) anonymous currency which is decentralized? It's practically the opposite of China's ideology, a country which has strict controls on just about everything within their borders. If I was the PRC, I'd move to damage, corrupt or if possible, destroy bitcoin. At the very least, I'd dig my claws in somehow, someway so I had some (even if it's just a little) control. But if I was China, how would I do it? I couldn't just create "The Exchange of the People's Republic of China". I'd have to do it through a proxy of some sort. There were some rumors on reddit about Chinese nationalist Jihan and his company Bitmain being such a front. I'm no tinfoil hat kind of guy, but the more I think on it, the less of stretch it seems...
  - rwcarlsen 9y ago
    There are many who believe that the company Blockstream is a hostile takeover trying to prevent bitcoin's success. It just depends on where you read. Lots of censorship on r/bitcoin and lots of echo-chambering on r/btc. Not that it's worth anything, but Jihan (although he has a suboptimally large amount of influence in/on the bitcoin community) has yet to demonstrate anything but a desire for it to succeed IMHO.
- TACIXAT 9y ago
  I just see it as a way to resell Chinese electricity. Digital currencies do challenge state-backed currencies. They'll never fully take over until taxes are accepted in a digital currency. As a tool for circumventing taxes though, countries do view that as a threat and will clamp down hard on it. If you want to treat it as a digital collectible and pay taxes when you sell some for a profit, great. If you want to treat it as a currency and not pay taxes, good luck.

modeless 9y ago

Seems to me as though Bitcoin mining is kind of a backdoor way to move Chinese money offshore circumventing capital controls. Pay for your electricity in yuan, then sell your Bitcoin anywhere in the world. In fact I speculate that may be the main reason Bitcoin mining is so popular there; it's essentially subsidized by people wanting to move money offshore. Perhaps this is cracking down on that? There's so little detail in the article it's impossible to tell.

chenster 9y ago
100% correct.
- modeless 9y ago
  Do you have some knowledge of people doing this?
Scoundreller 9y ago
I suspect the same when I buy goods from China on Ebay: The money is going to an ex-China Paypal account. I may very well be paying less than cost because $1 outside is China is worth x%+ than inside of China.
- ada1981 9y ago
  Curious what the opportunities to help folks in China do this and profit as a person in the USA?
  - ww520 9y ago
    Buy in bulks with discount. Pay to Swiss accounts. :)
Animats 9y ago
Yes. Not only that, it gets good tax and capital flow treatment in China, because it's considered "exporting". The big Bitcoin question for the last several years has been "what will the PBOC do"? So far, they've discouraged the use of Bitcoin for transactions within China, and stopped some speculative practices at Bitcoin exchanges, but haven't really cracked down.[1] Back in February, the PBOC announced a "study period" while they decided what to do. [1] https://www.bloomberg.com/news/articles/2017-02-10/china-bitcoin-exchanges-halt-withdrawals-after-central-bank-talk https://www.bloomberg.com/news/articles/2017-02-10/china-bit...
- runeks 9y ago
  I would be surprised if the Chinese government doesn't ban Bitcoin at some point. They don't allow their people free access to information, why would they allow freedom in monetary matters? They certainly doesn't seem inhibited in banning things that may pose a threat to themselves. Bitcoin just doesn't pose much of a threat yet, not until it's generally useful as a payment system and for financing -- thus comprising an actual competition to the PBOC and their member banks.
  - _coldfire 9y ago
    As long as all the entry/exit points are regulated and in line with the government, Bitcoin is perfect for a country obsessed with capital controls. Far easier to monitor than cash.
  - zabana 9y ago
    > They don't allow their people free access to information, why would they allow freedom in monetary matters? The US and other major "democracies" out there are already working on restricting access to information. I believe it's called "Fake News" ...
    - lawless123 9y ago
      Are you saying you don't believe Hillary drags children under their bed and eats them?
aswanson 9y ago
Speaking of which...for an American citizen, is moving coins to dollars taxed at a capital gains rate? How can the government know how much value was accrued?
- modeless 9y ago
  Yes. Same as any other capital gains, they trust you to report it, and audit you if they don't believe you.
mahranch 9y ago
> Seems to me as though Bitcoin mining is kind of a backdoor way to move Chinese money offshore Which is why China is trying desperately to get control. They limit how much money their citizens can move around, whether it's Yuan, stocks or foreign currency, everything is limited and monitored. Bitcoin is no exception. Except, I think it's more nefarious than that. Bitcoin stands for everything China is against. A (mostly) anonymous currency which is decentralized? It's practically the opposite of China's ideology, a country which has strict controls on just about everything within their borders. If I was the PRC, I'd move to damage, corrupt or if possible, destroy bitcoin. At the very least, I'd dig my claws in somehow, someway so I had some (even if it's just a little) control. But if I was China, how would I do it? I couldn't just create "The Exchange of the People's Republic of China". I'd have to do it through a proxy of some sort. There were some rumors on reddit about Chinese nationalist Jihan and his company Bitmain being such a front. I'm no tinfoil hat kind of guy, but the more I think on it, the less of stretch it seems...
- rwcarlsen 9y ago
  There are many who believe that the company Blockstream is a hostile takeover trying to prevent bitcoin's success. It just depends on where you read. Lots of censorship on r/bitcoin and lots of echo-chambering on r/btc. Not that it's worth anything, but Jihan (although he has a suboptimally large amount of influence in/on the bitcoin community) has yet to demonstrate anything but a desire for it to succeed IMHO.
TACIXAT 9y ago
I just see it as a way to resell Chinese electricity. Digital currencies do challenge state-backed currencies. They'll never fully take over until taxes are accepted in a digital currency. As a tool for circumventing taxes though, countries do view that as a threat and will clamp down hard on it. If you want to treat it as a digital collectible and pay taxes when you sell some for a profit, great. If you want to treat it as a currency and not pay taxes, good luck.