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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
by 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 agodoesn'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 agoThis 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 agoThat 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 agoThere'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 agoWhy can't one just buy BTC in yuan and liquidate it in another foreign currency?
- SeoxyS 9y agoWho wants to sell you something that's not restricted for something that is? Unless you're willing to pay a significant premium over its real value.
- pmorici 9y agoThe same could be said for any export they produce in China doesn't matter if it is Bitcoin or tube socks.
- HeavenFox 9y agowhich, now that I think about it, isn't that different from using the electricity to produce widget, export the said widget, and get dollars in return
- modeless 9y agoThat's not evading currency controls, it's called exporting. It's not illegal, it's encouraged.
- odiroot 9y agoI'm sorry but you're completely wrong on this one, see other comments. Moreover most big mining operations use alternative energy sources, usually hydropower.
- SeoxyS 9y agoPower is fungible. Hydro power capacity is capped. Any amount of energy derived from hydro power increases demand from coal from someone else by an equal amount.