7 ms·

China to Shut Bitcoin Exchanges?

142 points by verroq 9y ago

zabomber 9y ago
Nice paywall.
- verroq 9y ago
  https://pastebin.com/Fmb0ibZh https://pastebin.com/Fmb0ibZh
- adjkant 9y ago
  https://outline.com/zdKywA https://outline.com/zdKywA
  - grzm 9y ago
    Are outline.com links something that the WSJ provides? Something that users submit? Given that WSJ paywalls their content, I'd be surprised that they'd provide it to outline.com themselves, but stranger things have happened.
    - vit05 9y ago
      No. Outline is to make the text more readable. But, most of the times, pass the Paywall
      - grzm 9y ago
        Cheers.
chj 9y ago
Since BTC is an efficient way to pump money out of China, this will happen sooner or later.
sillysaurus3 9y ago
No paywall: http://archive.is/i0PFc http://archive.is/i0PFc
vit05 9y ago
"The country’s central bank has led a draft of instructions that would ban Chinese platforms from providing virtual currency trading services, according to people familiar with the matter. The move comes after months of scrutiny by Beijing, including a ban last week in China on initial coin offerings, a kind of fundraising via virtual currencies. Regulators in China have been investigating the domestic market for bitcoin and other virtual currencies since the beginning of the year. For a while, officials considered enacting antimoney-laundering rules on exchanges, even circulating a draft of such rules for them to follow." OkCoin prices are still going up. The only "important" person that has said this would happen was the VIABTC CEO on twitter. Nobody believes, but now, I think is true
option_greek 9y ago
Good luck banning or controlling Bitcoin - especially when there is a satellite streaming down blockchain. I understand their motive though. Large sums of money can be used for anything. Including regime change or coup.
- matt_wulfeck 9y ago
  I think you're underestimating China's ability to "ban" something. They don't need to make it technically impossible, they just need to make it very dangerous and burdensome. And they've basically mastered the art of internet surveillance at this point.
  - option_greek 9y ago
    I think they have very few options to control or destroy btc: 1) Force chinese miners to perform 51% attack for them 2) Use their own super computers to do so At the worst btc will fall and another might take its place. I would see these developments are exciting because the decentralization part hasn't been tested much. certainly not by a nation state actor. If BTC survives this, it will truly shine.
    - toomuchtodo 9y ago
      > I think they have very few options to control or destroy btc: 1) Force chinese miners to perform 51% attack for them 2) Use their own super computers to do so Or imprison/execute those found participating in cryptocurrencies. China does both fairly often for other crimes. https://xkcd.com/538/ https://xkcd.com/538/
      - option_greek 9y ago
        I agree. That would be the easiest to do. But in a country as big as China, underground will always flourish despite strict penalties. Even then the punishment can be heavy handed if they perceive crypto currencies as an existential threat to the regime. People forget that Chinese government is the largest and probably last such dictatorship in existence today. It is easy to forget with all the capitalism sugar coat on the top :)
seizethecheese 9y ago
Sell! Sell! Sell!
SeoxyS 9y ago
For anyone wondering how BTC is used as a way to evade Chinese currency controls, I just came to this realization today: people aren't buying bitcoin locally to send it out of the country: they're buying cheap coal electricity, using it to mine bitcoin, and then liquidating that in foreign exchanges.
- devdoomari 9y ago
  doesn't that mean 'almost free foreign currency' for the Chinese? why block free money? it's not like yuan is leaking out...
  - deleted 9y ago
    [deleted]
- omarchowdhury 9y ago
  This realization is incorrect. The amount of BTC generated globally[1] per day is minuscule compared to CNY/BTC volume[2]. Besides, they're selling the BTC they mine for more yuan. [1] $7M [2] OKCoin.cn alone does $100M a day on the BTC/CNY pair.
  - SeoxyS 9y ago
    That CNY traded in China remains stuck in China. Whoever sold the BTC for CNY now has to deal with the restricted currency Presumably most of that BTC/CNY trading is being traded for capital gains, not as a way to try to evade currency controls.
- MichaelGG 9y ago
  There's only around $8M a day in mining, at today's prices. So half that a month or so ago. Minus actual costs for ASICs and electric (a significant amount!). It's some flow, but can't justify the trade volumes right?
- esturk 9y ago
  Why can't one just buy BTC in yuan and liquidate it in another foreign currency?
avenoir 9y ago
I don't follow BTC news often but it seems like anytime the price goes up or down it is somehow tied to an event in China. Makes me wonder how much of bitcoin's skyrocketing value is actually based on China's market rather than natural growth. I guess we'll find out soon. In more positive news, it looks like Russia is on path to legalize Bitcoin [1] [1] https://cointelegraph.com/news/russia-is-working-on-legalizing-status-of-bitcoin-other-cryptocurrencies-rt https://cointelegraph.com/news/russia-is-working-on-legalizi...
- sillysaurus3 9y ago
  Eh, people were saying the same thing about silk road. Surprise: silk road got shut down and BTC's price didn't drop at all. I believe BTC's price is inherently a weighted random walk driven by speculation rather than rational reasons. Not everyone shares this belief, and it's human nature to look for explanations when there aren't any. (An unknowable explanation is still unknowable.)
  - narrator 9y ago
    All bubbles have money coming in from somewhere. The Keynsian "Animal Spirits" concept is almost as much B.S as Marxist "Productive Forces".
    - sillysaurus3 9y ago
      I didn't say there wasn't money coming in.
  - bdcravens 9y ago
    > silk road got shut down and BTC's price didn't drop at all Yes it did: (though I assume you mean over the longer term, but I don't think that's how most would read that comment) https://www.theguardian.com/technology/2013/oct/03/bitcoin-price-silk-road-ulbricht-value https://www.theguardian.com/technology/2013/oct/03/bitcoin-p...
    - sillysaurus3 9y ago
knodi 9y ago
time for a BTC crash.
- bdcravens 9y ago
  I think much of what the WSJ is reporting was reported over 24 hours ago, and there was a bit of a dip at that time. Most movements in BTC happen before MSM reports on it.
tudorconstantin 9y ago
It would be interesting to see how this unravels from a game theory perspective. Right now the crypto coin market cap is at around 150 billion USD (up from 15-18 bn in january this year). Not a huge amount by any means when compared to a big country's GDP. The daily traded volume is about 5-10 billions. If China bans the exchanges now, they basically opt-out from the value created by the flow of some of these billions. Sure, the prices and daily volumes would drop on the short/medium term, but this would only give one last chance to people left out to join and buy crypto at low prices. When the market cap and prices would grow back, China would be left out. Who would trust them anymore to start a blockchain business there?
- alextheparrot 9y ago
  It is also possible that a component of Bitcoin's value is transferring money out of China, in which case prices may start to reflect this decrease in utility.
- hbosch 9y ago
  The Chinese state does not need money, not even "billions" - power and influence are much more important, and exerting that influence to gain control is much more valuable than any amount of money unless you're talking in trillions. And even then...? There is no "win" for China (the state) by letting its population freely speculate and trade in crypto that they don't control... much better to shut it down.
probe 9y ago
One of my favorite questions to ask about this topic is: "Given what you know today (and how blockchain, cryptocurrencies, and decentralized networks work), would you still design the financial system and other systems (ex. identity, currencies, etc) the same way they are designed today?" My answer is no, and that's why I'm still bullish on decentralized technology and systems winning in the long-term. In that case, investments in Bitcoin and Ethereum are merely call options for an entirely new financial world and a risk still worth betting on.
- sebleon 9y ago
  To switch to another financial system, the alternative has to be significantly better (eg. 10x). Curious what advantages you'd point out?
- dilemma 9y ago
  Bitcoin isn't decentralized.
  - sillysaurus3 9y ago
    This is going to need a lot more text to justify.
    - nosuchthing 9y ago
      There's only 3 mining pools, and the dev team has acted anything but democratic. The reason for the fork to cash was because the dev team wanted to keep the network inefficent to benefit miner rewards at the expense of users, along with justifying the lightning network, with Blockstream having 9+ bitcoin core developers on their payroll.
      - bdcravens 9y ago
        > There's only 3 mining pools There's well more than 3 mining pools. https://blockchain.info/pools https://blockchain.info/pools
rkagerer 9y ago
My gut feeling is there's some truth to the rumour. Related resources: • Original Caixin Report that sparked all this: http://finance.caixin.com/2017-09-08/101142797.html http://finance.caixin.com/2017-09-08/101142797.html • (RECOMMENDED) Good English translation of above article: https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq1OpFpl0bqOtCev0HexY/edit https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq... • Shorter English announcement from Caixin: http://www.caixinglobal.com/2017-09-09/101142821.html http://www.caixinglobal.com/2017-09-09/101142821.html • Coindesk article pointing out Caixin has been spot-on in the past (re their Sep 2 leak regarding ICO fundraising): https://www.coindesk.com/report-casts-doubt-future-chinas-bitcoin-exchanges/ https://www.coindesk.com/report-casts-doubt-future-chinas-bi... • Related official news out of China regarding ICO ban: https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actual_pboc_news_released_today_pertains_to/ https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actua... • Tweet from CEO of ViaBTC saying "China will shut down all exchanges": https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bitcoin-exchanges/ https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bi... It's not the first time China's cracked down on virtual currency <--> fiat trading, but if true this could be more intense than their prior efforts. (Note this is a repost of my comment made to a previous HackerNews article on the topic)
- lookbeforeleap 9y ago
  Banning ICO is really different than banning Bitcoin exchanges. ICOs have been used by a group of people to do Ponzi Schemes, and the Gov't got a lot of requests from various money-got-stolen investors.
- vit05 9y ago
  People are acting exactly like people that participate in pyramid schemes. Denied, saying it is fake, searching for stupid reasons. That is just pathetic and horrible for the future of cryptocurrency. Things like this will happen and need to be discussed. It appears that the ban will be for the trade of fiat for Bitcoin. Everything else, including p2p trade, will be allowed. So, the price of Bitcoin will fall a little more, but, eventually, they will find ways to get crypto currency. Maybe a new coin, maybe more regulations or maybe people2people trades will be the future. There are already several great products emerging that do not need exchanges to trade crypto like 0x, Kyber.Network and even Ethertrade.
mrb 9y ago
The source for this news story is an anonymous government employee who told Caixin: http://www.caixinglobal.com/2017-09-09/101142821.html http://www.caixinglobal.com/2017-09-09/101142821.html
will_brown 9y ago
How is something defined as distributed and decentralized when it is regulated by each country? If China tanks the value of the major cryptocurrencies by 20% with just 2 regulations is a week, isn't the rest just academic? As everyone saw one day the founder of Ethereum was meeting with Putin and sending out press releases of potential partnership, the next Putin is putting out his own press releases questioning why he would ever embrace any foreign blockchain/crypto, that Russia will launch its own. If cryptocurrency can be regulated by individual countries like we saw with china this last week, then I expect the underlying blockchain technology can be regulated too, and we will begin seeing countries picking winners, basically who can be a node on the blockchain and who can mine. People think/thought blockchain equivalent to an automated unregulatable technology, but once you are talking about billions you impact people with power, they will raise and lower price at their will and take the people's technology from them through regulation.
- granitosaurus 9y ago
  While you do have somewhat of a point I'd correct you that it's really regulation but influence. It's to be expected that huge government decisions can influence decentralized projects. A shame but there's no other way of going about it.
- prostoalex 9y ago
  > then I expect the underlying blockchain technology can be regulated too You don't even need any explicit regulation - a country-level firewall will likely fork the chain.
- teknologist 9y ago
  Some government actions drive it up (like what happened in Cyprus for instance). It seems market participants have got rather attached to this whole ICO thing as a way to make a quick buck and have lost sight of the original vision. The wall street-ization of the blockchain.
HeavenFox 9y ago
Given the history of strong government control of economy in China, I am kind of surprised this didn't happen sooner. Personally, I think the recent ICO fever is likely the final straw. In Chinese society, the citizens expect the government to protect them from harm, whether the government is responsible for them or not. On the other hand, the government values stability above everything else, in order to maintain their regime. Now, there's this ICO thing, which has the potential to scam millions of Chinese (and trust me, it will happen), who will inevitably protest until their money is returned, you wonder what's gonna happen… People have received DEATH SENTENCE before for scamming investors[1]. Let that sink in. edit: someone mentioned capital control. While I agree this is probably one of the reasons, I doubt it's the biggest. Sure, having money flowing out of the country gives the government headache, compared to having thousands of people on the street holding signs, it seems like a rather minor one. Plus, if you want to move millions of dollars, you probably won't trust whatever-coin to do the job. There are tons of ways of doing that, and the government has bigger fish to fry. [1] https://en.m.wikipedia.org/wiki/Yilishen_Tianxi_Group https://en.m.wikipedia.org/wiki/Yilishen_Tianxi_Group
- teknologist 9y ago
  Isn't this a bit contradictory? If the government really wanted to protect people from harm they wouldn't allow ponzi schemes that urge people to invest in boxes of ants to advertise on state television. Oh, and: > “The company was endorsed by Chinese government officials, and Wang, now the chief executive, was photographed with the former Minister of Commerce of the People's Republic of China, Bo Xilai.”
- mark024 9y ago
  what ICOs has to do with bitcoin?
- factorialboy 9y ago
  > In Chinese society, the citizens expect the government to protect them from harm Mao would disagree.
  - lookbeforeleap 9y ago
mrb 9y ago
Speculation: It seems China is doing this to replace them all with a single government-run Bitcoin exchange: https://mobile.twitter.com/cnLedger/status/907095022385823744 https://mobile.twitter.com/cnLedger/status/90709502238582374... This would allow them to associate an identity behind most inbound and outbound Bitcoin transactions to/from the exchange... "Perfect control, classic China" as a Twitter user said.
- sillysaurus3 9y ago
  It's pretty trivial to convert from BTC to Monero and back. There are even services that will send a specific address BTC automatically if you send them Monero. So unless the exchange is going to ban mixed coins and Monero-based sources, that won't lead to Orwellian-style undodgeable monitoring of every transaction. It's an option to do that, of course, but it would be precedent-setting. No one else bans BTC that came in via a Monero service.
- topmonk 9y ago
  I don't see the mention of BTC anywhere in the app that is released or in the announcements from that twitter log. They talk about using "blockchain technology", which I assume means a new coin.
- em3rgent0rdr 9y ago
  reminds me of scene in Mr. Robot where E-Corp exec is proposing a deal to a govt official: "With eCoin we control the ledger… and the mining servers. We are the authority! I will make sure you have visibility into every single wallet that’s open, every loan, every transaction…"
  - kihadi 9y ago
    a single entity controlling a cryptocurrency defeats the purpose of cryptocurrency. just issue something like amazon credit or whatever. just one example of how weak the writing is on mr. robot. the basis of everything must be "Lol hackers bro amirite?"
    - 9y ago
wallacoloo 9y ago
One of the touted benefits of bitcoin and related cryptocurrencies is the fact that transactions on such networks cannot be easily censored, even though not many people experience this kind of thing directly with classic currencies. Therefore, I find it amusing that a prime example of why we need non-censurable currencies is provided by the difficulty of exchanging them in the first place.
- panarky 9y ago
  Analysts say more activity is moving underground, where individuals can send virtual currencies to each other using private addresses, which serve like safe-deposit boxes. Regulators will likely to have to tolerate noncommercial trading of virtual currencies. “The government also doesn’t have the power to control” that. --- Centralized exchanges have always been the achilles heel of cryptocurrency ecosystem. Better to keep it distributed with (a) smart contracts and (b) lightning network.
sjcsjc 9y ago
One-party communist state opposed to free-market financial innovation. In other news, water is wet.
neuro_imager 9y ago
I'm extremely skeptical. The Chinese aren't stupid. And they are corrupt. The typical mining operation in China likely involves every government official in the region. Profits that are made from mining and/or trading are no doubt moving through the hands of members of the government - why would they give up free money? This is probably bullsh*t put out by the Chinese government to screw with the market for fun and profit. Also realistically how exactly would you enforce this? If they shut down Chinese exchanges, many savvy Chinese will just use international exchanges and trade IRL with paper-wallets. Unless one of the commentators is right and this is all to make way for a government run super-exchange (which wouldn't surprise me).
- yorwba 9y ago
  > If they shut down Chinese exchanges, many savvy Chinese will just use international exchanges and trade IRL with paper-wallets. Except Chinese who are merely savvy, but do not have political connections won't be allowed to transfer significant sums out of the country. Part of the reason for Bitcoin's popularity in China is that it allowed a way around those capital controls.
- modeless 9y ago
  They're not banning mining. Miners will be inconvenienced because they will have to sell for dollars overseas and move the money back into China, but it won't be the end of the industry.
  - neuro_imager 9y ago
    Yes I know, but mining is an enormous source of revenue in China and the workarounds you mention are costly. So again, why give away money?
- tanilama 9y ago
  > why would they give up free money? Chinese system is a top-down system, once something becomes 政治任务(Political Mission, meaning the top level agenda), they are basically in a obey-or-die situation and of cause most of them will comply. Indeed, the Chinese government cannot ban EVERY individual, but they can make it scary enough that most people, unless desperate, will not attempt it. Like, put some exchange owners into prison to make an example, restrict the access to foreign exchanges, or they can even go as far to detect bitcoin protocol and kills it on packet level. That is what they usually do anyway.
pmorici 9y ago
I would take this with a huge grain of salt. This appears to be a rehashing of news from last week that China planed to ban trading of ICO tokens. The news was thinly sourced and it seems like people misconstrued the rumored ICO ban to mean a general crypto-currency trading ban. Historically there have been more stories like this than I can count where some random source claims the PBOC is going to "ban Bitcoin" and it has always proven to be false. The worst that has happened is the tightening of regulations on Bitcoin exchange providers. There is even a common meme that has been going around for years.[0] [0] https://www.youtube.com/watch?v=Ry6PpRXk0dQ https://www.youtube.com/watch?v=Ry6PpRXk0dQ
- lookbeforeleap 9y ago
  Yeah, this is another piece of fake news..no exchanges in China are closed now. FUD, FUD. Just another round of pumping..
- modeless 9y ago
  > some random source Sorry, Caixin and WSJ and Bloomberg are not "some random source". I know "China bans Bitcoin" has been a joke meme in the community for years, but this time it's the real deal.
  - deleted 9y ago
    [deleted]
  - pmorici 9y ago
    Pretty sure this is just a reprint of the same rumors reported in Caixin last week.
l1feh4ck 9y ago
>>To Read the Full Story Subscribe or Sign In. Forcing users to Subscribe or Sign In to read the content while allowing the search engine crawlers without any barriers should be considered as malpractice. This was exactly the kind of stuff Quora was doing but at least they had the decency of doing this on users coming from internal links.
- modeless 9y ago
  They don't let the crawlers in either. Do a search. You'll see the snippet only contains the same part of the article you see before the paywall.
lookbeforeleap 9y ago
Another fake news..no exchanges are closed now. FUD, FUD. Just another round of pumping..
acty1 9y ago
That's why we need decentralized exchanges like www.ether.bid based on 0x protocol
- bdcravens 9y ago
  This would only let you exchange for tokens, right? 95% of the trading public won't give anything a look if you can't trade for fiat.
rkagerer 9y ago
Looks like there's a brand new article, behind a Caixin paywall. Does anyone here have access to it? http://www.caixinglobal.com/2017-09-11/101143673.html http://www.caixinglobal.com/2017-09-11/101143673.html
dgut 9y ago
What we need is a fully decentralised and uncontrollable Internet. It can't be wireless, that's too slow (limits of physics), and jamming it too easy. We need to actually dig our own cables, those are untraceable, and they'd have to cut one by one. OR we could probably leverage power lines, as much as I hate introducing noise into those. There is no 100% foolproof software solution given the current state of the net.

142 points by verroq 9y ago

zabomber 9y ago

Nice paywall.

verroq 9y ago
https://pastebin.com/Fmb0ibZh https://pastebin.com/Fmb0ibZh
adjkant 9y ago
https://outline.com/zdKywA https://outline.com/zdKywA
- grzm 9y ago
  Are outline.com links something that the WSJ provides? Something that users submit? Given that WSJ paywalls their content, I'd be surprised that they'd provide it to outline.com themselves, but stranger things have happened.
  - vit05 9y ago
    No. Outline is to make the text more readable. But, most of the times, pass the Paywall
    - grzm 9y ago
      Cheers.

chj 9y ago

Since BTC is an efficient way to pump money out of China, this will happen sooner or later.

sillysaurus3 9y ago

No paywall: http://archive.is/i0PFc http://archive.is/i0PFc

vit05 9y ago

"The country’s central bank has led a draft of instructions that would ban Chinese platforms from providing virtual currency trading services, according to people familiar with the matter. The move comes after months of scrutiny by Beijing, including a ban last week in China on initial coin offerings, a kind of fundraising via virtual currencies. Regulators in China have been investigating the domestic market for bitcoin and other virtual currencies since the beginning of the year. For a while, officials considered enacting antimoney-laundering rules on exchanges, even circulating a draft of such rules for them to follow." OkCoin prices are still going up. The only "important" person that has said this would happen was the VIABTC CEO on twitter. Nobody believes, but now, I think is true

option_greek 9y ago

Good luck banning or controlling Bitcoin - especially when there is a satellite streaming down blockchain. I understand their motive though. Large sums of money can be used for anything. Including regime change or coup.

matt_wulfeck 9y ago
I think you're underestimating China's ability to "ban" something. They don't need to make it technically impossible, they just need to make it very dangerous and burdensome. And they've basically mastered the art of internet surveillance at this point.
- option_greek 9y ago
  I think they have very few options to control or destroy btc: 1) Force chinese miners to perform 51% attack for them 2) Use their own super computers to do so At the worst btc will fall and another might take its place. I would see these developments are exciting because the decentralization part hasn't been tested much. certainly not by a nation state actor. If BTC survives this, it will truly shine.
  - toomuchtodo 9y ago
    > I think they have very few options to control or destroy btc: 1) Force chinese miners to perform 51% attack for them 2) Use their own super computers to do so Or imprison/execute those found participating in cryptocurrencies. China does both fairly often for other crimes. https://xkcd.com/538/ https://xkcd.com/538/
    - option_greek 9y ago
      I agree. That would be the easiest to do. But in a country as big as China, underground will always flourish despite strict penalties. Even then the punishment can be heavy handed if they perceive crypto currencies as an existential threat to the regime. People forget that Chinese government is the largest and probably last such dictatorship in existence today. It is easy to forget with all the capitalism sugar coat on the top :)

seizethecheese 9y ago

Sell! Sell! Sell!

SeoxyS 9y ago

For anyone wondering how BTC is used as a way to evade Chinese currency controls, I just came to this realization today: people aren't buying bitcoin locally to send it out of the country: they're buying cheap coal electricity, using it to mine bitcoin, and then liquidating that in foreign exchanges.

devdoomari 9y ago
doesn't that mean 'almost free foreign currency' for the Chinese? why block free money? it's not like yuan is leaking out...
- deleted 9y ago
  [deleted]
omarchowdhury 9y ago
This realization is incorrect. The amount of BTC generated globally[1] per day is minuscule compared to CNY/BTC volume[2]. Besides, they're selling the BTC they mine for more yuan. [1] $7M [2] OKCoin.cn alone does $100M a day on the BTC/CNY pair.
- SeoxyS 9y ago
  That CNY traded in China remains stuck in China. Whoever sold the BTC for CNY now has to deal with the restricted currency Presumably most of that BTC/CNY trading is being traded for capital gains, not as a way to try to evade currency controls.
MichaelGG 9y ago
There's only around $8M a day in mining, at today's prices. So half that a month or so ago. Minus actual costs for ASICs and electric (a significant amount!). It's some flow, but can't justify the trade volumes right?
esturk 9y ago
Why can't one just buy BTC in yuan and liquidate it in another foreign currency?

avenoir 9y ago

I don't follow BTC news often but it seems like anytime the price goes up or down it is somehow tied to an event in China. Makes me wonder how much of bitcoin's skyrocketing value is actually based on China's market rather than natural growth. I guess we'll find out soon. In more positive news, it looks like Russia is on path to legalize Bitcoin [1] [1] https://cointelegraph.com/news/russia-is-working-on-legalizing-status-of-bitcoin-other-cryptocurrencies-rt https://cointelegraph.com/news/russia-is-working-on-legalizi...

sillysaurus3 9y ago
Eh, people were saying the same thing about silk road. Surprise: silk road got shut down and BTC's price didn't drop at all. I believe BTC's price is inherently a weighted random walk driven by speculation rather than rational reasons. Not everyone shares this belief, and it's human nature to look for explanations when there aren't any. (An unknowable explanation is still unknowable.)
- narrator 9y ago
  All bubbles have money coming in from somewhere. The Keynsian "Animal Spirits" concept is almost as much B.S as Marxist "Productive Forces".
  - sillysaurus3 9y ago
    I didn't say there wasn't money coming in.
- bdcravens 9y ago
  > silk road got shut down and BTC's price didn't drop at all Yes it did: (though I assume you mean over the longer term, but I don't think that's how most would read that comment) https://www.theguardian.com/technology/2013/oct/03/bitcoin-price-silk-road-ulbricht-value https://www.theguardian.com/technology/2013/oct/03/bitcoin-p...
  - sillysaurus3 9y ago

knodi 9y ago

time for a BTC crash.

bdcravens 9y ago
I think much of what the WSJ is reporting was reported over 24 hours ago, and there was a bit of a dip at that time. Most movements in BTC happen before MSM reports on it.

tudorconstantin 9y ago

It would be interesting to see how this unravels from a game theory perspective. Right now the crypto coin market cap is at around 150 billion USD (up from 15-18 bn in january this year). Not a huge amount by any means when compared to a big country's GDP. The daily traded volume is about 5-10 billions. If China bans the exchanges now, they basically opt-out from the value created by the flow of some of these billions. Sure, the prices and daily volumes would drop on the short/medium term, but this would only give one last chance to people left out to join and buy crypto at low prices. When the market cap and prices would grow back, China would be left out. Who would trust them anymore to start a blockchain business there?

alextheparrot 9y ago
It is also possible that a component of Bitcoin's value is transferring money out of China, in which case prices may start to reflect this decrease in utility.
hbosch 9y ago
The Chinese state does not need money, not even "billions" - power and influence are much more important, and exerting that influence to gain control is much more valuable than any amount of money unless you're talking in trillions. And even then...? There is no "win" for China (the state) by letting its population freely speculate and trade in crypto that they don't control... much better to shut it down.

probe 9y ago

One of my favorite questions to ask about this topic is: "Given what you know today (and how blockchain, cryptocurrencies, and decentralized networks work), would you still design the financial system and other systems (ex. identity, currencies, etc) the same way they are designed today?" My answer is no, and that's why I'm still bullish on decentralized technology and systems winning in the long-term. In that case, investments in Bitcoin and Ethereum are merely call options for an entirely new financial world and a risk still worth betting on.

sebleon 9y ago
To switch to another financial system, the alternative has to be significantly better (eg. 10x). Curious what advantages you'd point out?
dilemma 9y ago
Bitcoin isn't decentralized.
- sillysaurus3 9y ago
  This is going to need a lot more text to justify.
  - nosuchthing 9y ago
    There's only 3 mining pools, and the dev team has acted anything but democratic. The reason for the fork to cash was because the dev team wanted to keep the network inefficent to benefit miner rewards at the expense of users, along with justifying the lightning network, with Blockstream having 9+ bitcoin core developers on their payroll.
    - bdcravens 9y ago
      > There's only 3 mining pools There's well more than 3 mining pools. https://blockchain.info/pools https://blockchain.info/pools

rkagerer 9y ago

My gut feeling is there's some truth to the rumour. Related resources: • Original Caixin Report that sparked all this: http://finance.caixin.com/2017-09-08/101142797.html http://finance.caixin.com/2017-09-08/101142797.html • (RECOMMENDED) Good English translation of above article: https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq1OpFpl0bqOtCev0HexY/edit https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq... • Shorter English announcement from Caixin: http://www.caixinglobal.com/2017-09-09/101142821.html http://www.caixinglobal.com/2017-09-09/101142821.html • Coindesk article pointing out Caixin has been spot-on in the past (re their Sep 2 leak regarding ICO fundraising): https://www.coindesk.com/report-casts-doubt-future-chinas-bitcoin-exchanges/ https://www.coindesk.com/report-casts-doubt-future-chinas-bi... • Related official news out of China regarding ICO ban: https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actual_pboc_news_released_today_pertains_to/ https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actua... • Tweet from CEO of ViaBTC saying "China will shut down all exchanges": https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bitcoin-exchanges/ https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bi... It's not the first time China's cracked down on virtual currency <--> fiat trading, but if true this could be more intense than their prior efforts. (Note this is a repost of my comment made to a previous HackerNews article on the topic)

lookbeforeleap 9y ago
Banning ICO is really different than banning Bitcoin exchanges. ICOs have been used by a group of people to do Ponzi Schemes, and the Gov't got a lot of requests from various money-got-stolen investors.
vit05 9y ago
People are acting exactly like people that participate in pyramid schemes. Denied, saying it is fake, searching for stupid reasons. That is just pathetic and horrible for the future of cryptocurrency. Things like this will happen and need to be discussed. It appears that the ban will be for the trade of fiat for Bitcoin. Everything else, including p2p trade, will be allowed. So, the price of Bitcoin will fall a little more, but, eventually, they will find ways to get crypto currency. Maybe a new coin, maybe more regulations or maybe people2people trades will be the future. There are already several great products emerging that do not need exchanges to trade crypto like 0x, Kyber.Network and even Ethertrade.

mrb 9y ago

The source for this news story is an anonymous government employee who told Caixin: http://www.caixinglobal.com/2017-09-09/101142821.html http://www.caixinglobal.com/2017-09-09/101142821.html

will_brown 9y ago

How is something defined as distributed and decentralized when it is regulated by each country? If China tanks the value of the major cryptocurrencies by 20% with just 2 regulations is a week, isn't the rest just academic? As everyone saw one day the founder of Ethereum was meeting with Putin and sending out press releases of potential partnership, the next Putin is putting out his own press releases questioning why he would ever embrace any foreign blockchain/crypto, that Russia will launch its own. If cryptocurrency can be regulated by individual countries like we saw with china this last week, then I expect the underlying blockchain technology can be regulated too, and we will begin seeing countries picking winners, basically who can be a node on the blockchain and who can mine. People think/thought blockchain equivalent to an automated unregulatable technology, but once you are talking about billions you impact people with power, they will raise and lower price at their will and take the people's technology from them through regulation.

granitosaurus 9y ago
While you do have somewhat of a point I'd correct you that it's really regulation but influence. It's to be expected that huge government decisions can influence decentralized projects. A shame but there's no other way of going about it.
prostoalex 9y ago
> then I expect the underlying blockchain technology can be regulated too You don't even need any explicit regulation - a country-level firewall will likely fork the chain.
teknologist 9y ago
Some government actions drive it up (like what happened in Cyprus for instance). It seems market participants have got rather attached to this whole ICO thing as a way to make a quick buck and have lost sight of the original vision. The wall street-ization of the blockchain.

HeavenFox 9y ago

Given the history of strong government control of economy in China, I am kind of surprised this didn't happen sooner. Personally, I think the recent ICO fever is likely the final straw. In Chinese society, the citizens expect the government to protect them from harm, whether the government is responsible for them or not. On the other hand, the government values stability above everything else, in order to maintain their regime. Now, there's this ICO thing, which has the potential to scam millions of Chinese (and trust me, it will happen), who will inevitably protest until their money is returned, you wonder what's gonna happen… People have received DEATH SENTENCE before for scamming investors[1]. Let that sink in. edit: someone mentioned capital control. While I agree this is probably one of the reasons, I doubt it's the biggest. Sure, having money flowing out of the country gives the government headache, compared to having thousands of people on the street holding signs, it seems like a rather minor one. Plus, if you want to move millions of dollars, you probably won't trust whatever-coin to do the job. There are tons of ways of doing that, and the government has bigger fish to fry. [1] https://en.m.wikipedia.org/wiki/Yilishen_Tianxi_Group https://en.m.wikipedia.org/wiki/Yilishen_Tianxi_Group

teknologist 9y ago
Isn't this a bit contradictory? If the government really wanted to protect people from harm they wouldn't allow ponzi schemes that urge people to invest in boxes of ants to advertise on state television. Oh, and: > “The company was endorsed by Chinese government officials, and Wang, now the chief executive, was photographed with the former Minister of Commerce of the People's Republic of China, Bo Xilai.”
mark024 9y ago
what ICOs has to do with bitcoin?
factorialboy 9y ago
> In Chinese society, the citizens expect the government to protect them from harm Mao would disagree.
- lookbeforeleap 9y ago

mrb 9y ago

Speculation: It seems China is doing this to replace them all with a single government-run Bitcoin exchange: https://mobile.twitter.com/cnLedger/status/907095022385823744 https://mobile.twitter.com/cnLedger/status/90709502238582374... This would allow them to associate an identity behind most inbound and outbound Bitcoin transactions to/from the exchange... "Perfect control, classic China" as a Twitter user said.

sillysaurus3 9y ago
It's pretty trivial to convert from BTC to Monero and back. There are even services that will send a specific address BTC automatically if you send them Monero. So unless the exchange is going to ban mixed coins and Monero-based sources, that won't lead to Orwellian-style undodgeable monitoring of every transaction. It's an option to do that, of course, but it would be precedent-setting. No one else bans BTC that came in via a Monero service.
topmonk 9y ago
I don't see the mention of BTC anywhere in the app that is released or in the announcements from that twitter log. They talk about using "blockchain technology", which I assume means a new coin.
em3rgent0rdr 9y ago
reminds me of scene in Mr. Robot where E-Corp exec is proposing a deal to a govt official: "With eCoin we control the ledger… and the mining servers. We are the authority! I will make sure you have visibility into every single wallet that’s open, every loan, every transaction…"
- kihadi 9y ago
  a single entity controlling a cryptocurrency defeats the purpose of cryptocurrency. just issue something like amazon credit or whatever. just one example of how weak the writing is on mr. robot. the basis of everything must be "Lol hackers bro amirite?"
  - 9y ago

wallacoloo 9y ago

One of the touted benefits of bitcoin and related cryptocurrencies is the fact that transactions on such networks cannot be easily censored, even though not many people experience this kind of thing directly with classic currencies. Therefore, I find it amusing that a prime example of why we need non-censurable currencies is provided by the difficulty of exchanging them in the first place.

panarky 9y ago
Analysts say more activity is moving underground, where individuals can send virtual currencies to each other using private addresses, which serve like safe-deposit boxes. Regulators will likely to have to tolerate noncommercial trading of virtual currencies. “The government also doesn’t have the power to control” that. --- Centralized exchanges have always been the achilles heel of cryptocurrency ecosystem. Better to keep it distributed with (a) smart contracts and (b) lightning network.

sjcsjc 9y ago

One-party communist state opposed to free-market financial innovation. In other news, water is wet.

neuro_imager 9y ago

I'm extremely skeptical. The Chinese aren't stupid. And they are corrupt. The typical mining operation in China likely involves every government official in the region. Profits that are made from mining and/or trading are no doubt moving through the hands of members of the government - why would they give up free money? This is probably bullsh*t put out by the Chinese government to screw with the market for fun and profit. Also realistically how exactly would you enforce this? If they shut down Chinese exchanges, many savvy Chinese will just use international exchanges and trade IRL with paper-wallets. Unless one of the commentators is right and this is all to make way for a government run super-exchange (which wouldn't surprise me).

yorwba 9y ago
> If they shut down Chinese exchanges, many savvy Chinese will just use international exchanges and trade IRL with paper-wallets. Except Chinese who are merely savvy, but do not have political connections won't be allowed to transfer significant sums out of the country. Part of the reason for Bitcoin's popularity in China is that it allowed a way around those capital controls.
modeless 9y ago
They're not banning mining. Miners will be inconvenienced because they will have to sell for dollars overseas and move the money back into China, but it won't be the end of the industry.
- neuro_imager 9y ago
  Yes I know, but mining is an enormous source of revenue in China and the workarounds you mention are costly. So again, why give away money?
tanilama 9y ago
> why would they give up free money? Chinese system is a top-down system, once something becomes 政治任务(Political Mission, meaning the top level agenda), they are basically in a obey-or-die situation and of cause most of them will comply. Indeed, the Chinese government cannot ban EVERY individual, but they can make it scary enough that most people, unless desperate, will not attempt it. Like, put some exchange owners into prison to make an example, restrict the access to foreign exchanges, or they can even go as far to detect bitcoin protocol and kills it on packet level. That is what they usually do anyway.

pmorici 9y ago

I would take this with a huge grain of salt. This appears to be a rehashing of news from last week that China planed to ban trading of ICO tokens. The news was thinly sourced and it seems like people misconstrued the rumored ICO ban to mean a general crypto-currency trading ban. Historically there have been more stories like this than I can count where some random source claims the PBOC is going to "ban Bitcoin" and it has always proven to be false. The worst that has happened is the tightening of regulations on Bitcoin exchange providers. There is even a common meme that has been going around for years.[0] [0] https://www.youtube.com/watch?v=Ry6PpRXk0dQ https://www.youtube.com/watch?v=Ry6PpRXk0dQ

lookbeforeleap 9y ago
Yeah, this is another piece of fake news..no exchanges in China are closed now. FUD, FUD. Just another round of pumping..
modeless 9y ago
> some random source Sorry, Caixin and WSJ and Bloomberg are not "some random source". I know "China bans Bitcoin" has been a joke meme in the community for years, but this time it's the real deal.
- deleted 9y ago
  [deleted]
- pmorici 9y ago
  Pretty sure this is just a reprint of the same rumors reported in Caixin last week.

l1feh4ck 9y ago

>>To Read the Full Story Subscribe or Sign In. Forcing users to Subscribe or Sign In to read the content while allowing the search engine crawlers without any barriers should be considered as malpractice. This was exactly the kind of stuff Quora was doing but at least they had the decency of doing this on users coming from internal links.

modeless 9y ago
They don't let the crawlers in either. Do a search. You'll see the snippet only contains the same part of the article you see before the paywall.

lookbeforeleap 9y ago

Another fake news..no exchanges are closed now. FUD, FUD. Just another round of pumping..

acty1 9y ago

That's why we need decentralized exchanges like www.ether.bid based on 0x protocol

bdcravens 9y ago
This would only let you exchange for tokens, right? 95% of the trading public won't give anything a look if you can't trade for fiat.

rkagerer 9y ago

Looks like there's a brand new article, behind a Caixin paywall. Does anyone here have access to it? http://www.caixinglobal.com/2017-09-11/101143673.html http://www.caixinglobal.com/2017-09-11/101143673.html

dgut 9y ago

What we need is a fully decentralised and uncontrollable Internet. It can't be wireless, that's too slow (limits of physics), and jamming it too easy. We need to actually dig our own cables, those are untraceable, and they'd have to cut one by one. OR we could probably leverage power lines, as much as I hate introducing noise into those. There is no 100% foolproof software solution given the current state of the net.