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China Bans Financial Companies From Bitcoin Transactions

timothy posted about 8 months ago | from the best-argument-yet-for-using-it dept.

China 110

quantr writes with this excerpt from Bloomberg: "China's central bank barred financial institutions from handling Bitcoin transactions, moving to regulate the virtual currency after an 89-fold jump in its value sparked a surge of investor interest in the country. Bitcoin plunged more than 20 percent to below $1,000 on the BitStamp Internet exchange after the People's Bank of China said it isn't a currency with 'real meaning' and doesn't have the same legal status. The public is free to participate in Internet transactions provided they take on the risk themselves, it said. The ban reflects concern about the risk the digital currency may pose to China's capital controls and financial stability after a surge in trading this year made the country the world's biggest trader of Bitcoin, according to exchange operator BTC China. Bitcoin's price jumped more than ninefold in the past two months alone, prompting former Federal Reserve Chairman Alan Greenspan to call it a 'bubble.' 'The concern is that it interferes with normal monetary policy operation,' said Hao Hong, head of China research at Bocom International Holdings Co. in Hong Kong. 'It represents an unofficial leakage to the current monetary system and trades globally. It is difficult to regulate and could be used for money laundering.'"

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The public is free to participate in Internet tran (5, Insightful)

gl4ss (559668) | about 8 months ago | (#45607117)

"The public is free to participate in Internet transactions provided they take on the risk themselves,"

that should actually be a green sign.

any method that can be legally used to turn yuan into something else that can be turned into money - and can be moved electronically - is in big demand...

(no, I don't have any bc)

Re:The public is free to participate in Internet t (0)

Anonymous Coward | about 8 months ago | (#45607217)

China [youtube.com]

Re:The public is free to participate in Internet t (1, Informative)

ElectricTurtle (1171201) | about 8 months ago | (#45607501)

I'm not sure how that's supposed to mean anything... you do realize that the USN makes the PLAN look like a handful of plastic boats in a kid's bathtub right? Compare fleet compositions someday. We have so many carriers we can't even field them all, and the PLAN just barely manages to field one, which has never even seen combat.

The PLA and PLAAF are sizable, formidable forces, and a land war with China would be a nightmare, but the PLAN is a joke, at least to the US. To the small navies of its neighbors, it's serious business, but then they all ultimately depend on US intervention for defense anyway. SEATO4EVAR

Re:The public is free to participate in Internet t (1, Offtopic)

the eric conspiracy (20178) | about 8 months ago | (#45608545)

LOL. One US Navy carrier group > entire Chinese navy.

Re:The public is free to participate in Internet t (1, Offtopic)

Talderas (1212466) | about 8 months ago | (#45608921)

First number is USA's count. Second number is China's count. Third number is world-wide total.

Aircraft Carriers: 10 [55.5%] / 1 [5.5%] / 18
Amphibious Assault Ship: 9 [39.1%] / 0 [0%] / 23
Landing Ship: 21 [43.8%] / 26 [54.2%] / 48
Cruiser: 22 [78.6%] / 0 [0%] / 28
Destroyer: 62 [36.3%] / 24 [14%] / 171
Frigate: 24 [6.1%] / 45 [10.9%] / 411
Corvette: 2 [0.7%] / 8 [2.7%] / 301
Patrol Boat: 209 [17.6%] / 236 [19.8%] / 1,190
Anti-Mine Ship: 14 [3.2%] / 107 [24.2%] / 443
Missile Sub: 14 [28.6%] / 5 [10.2%] / 49
Attack Sub: 57 [14.3%] / 55 [13.8%] / 398
All Ships: 445 [14.5%] / 507 [16.5%] / 3,074
Tonnage: 3,415,893 / 659,578

Re:The public is free to participate in Internet t (0)

donscarletti (569232) | about 8 months ago | (#45609613)

Oh yeah, the Liaoning right?

China buys a crappy 22 year old Soviet bucket, pretending it's a floating casino, puts a new coat of paint on it and calls it a warship.

Suddenly everyone's hangmu this and hangmu that, it's picture (any generic aircraft carrier picture they can find) is stuck on ads for anything a patriotic man might like to buy.

The whole thing is quite bemusing.

Re:The public is free to participate in Internet t (0)

jafac (1449) | about 8 months ago | (#45611871)

The whole thing is quite bemusing.

. . . yeah, it's all fun and games until you invade the wrong country, sparking an ethnic conflict that kills and displaces 10s of millions, and the cost of the war throws the world's economy into a tailspin.

Re:The public is free to participate in Internet t (2, Interesting)

Joce640k (829181) | about 8 months ago | (#45607259)

How come we only see bitcoin stories on slashdot?

How come there's no stories about Litecoin, Namecoin, etc.? They both have "billion dollar" values, too.

Re:The public is free to participate in Internet t (1)

ackthpt (218170) | about 8 months ago | (#45607289)

How come we only see bitcoin stories on slashdot?

How come there's no stories about Litecoin, Namecoin, etc.? They both have "billion dollar" values, too.

Yeah, but Bitcoin is the new Honey Badger. I saw the sign along the Lawrence Expressway in Sunnyvale, California, so it must be true!

Re:The public is free to participate in Internet t (3, Insightful)

JcMorin (930466) | about 8 months ago | (#45607469)

Because other alt-coin are only copy/paste of Bitcoin, have no infrastructure and are less secure because they there is less miners. How many merchant accept Litecoin or Namecoin?

Re:The public is free to participate in Internet t (-1)

Anonymous Coward | about 8 months ago | (#45607575)

... except that everything you've just stated is completely false.

Re:The public is free to participate in Internet t (0)

Anonymous Coward | about 8 months ago | (#45608205)

This message has been brought to you by the BTC investors of China (PRC), whose values are, "pump, pump, pump"!

Re:The public is free to participate in Internet t (2, Informative)

Anonymous Coward | about 8 months ago | (#45608631)

You realize Namecoin isn't a currency, right? It's a replacement of DNS...

Re: The public is free to participate in Internet (0)

Anonymous Coward | about 8 months ago | (#45609281)

except peercoin. more secure than all of them.

Went down, then came back. (3, Insightful)

Saethan (2725367) | about 8 months ago | (#45607121)

Yeah, btc took a momentary dive, and people jumped on it and it shot right back up above $1k. This all happened while I was asleep so *shrug*

Re:Went down, then came back. (0, Insightful)

Anonymous Coward | about 8 months ago | (#45607279)

You still don't understand that money can't be majicked out of thin air and be worth something?

The only thing keeping it afloat is other people believing the same fairy story.

Re: Went down, then came back. (3, Insightful)

Sigg3.net (886486) | about 8 months ago | (#45607373)

Exactly. But that's true of any transaction-token regardless of expression; money, stocks, bitcoins, camels. (The last has other uses too.) Money is a technology.

You're failing to see what bitcoin is changing money-technology _into_.

Re:Went down, then came back. (1)

Anonymous Coward | about 8 months ago | (#45607417)

You still don't understand that money can't be majicked out of thin air and be worth something?

The only thing keeping it afloat is other people believing the same fairy story.

As opposed to any other fiat currency? Like, oh I don't know, the US dollar?

Re:Went down, then came back. (1)

Joce640k (829181) | about 8 months ago | (#45607509)

Dollars have been around long enough to earn their trust.

Re:Went down, then came back. (0)

Anonymous Coward | about 8 months ago | (#45608049)

But I'll bet the same thing was said about the Dollar when it was first introduced. In fact, for over a hundred years, the Dollar was a very poor substitute to the British Pound. Everything has to start somewhere.

/CSB: October of last year, 2012, I bought ~55 BtC at $12 each ($650). Just cashed out 20 ($20,240) for Xmas vacation and gifts and have a remaining 25 (~$27,500), that if they dropped back to $12 or completely disappeared overnight, I'd still be waaaaay ahead of what I earned at my 8-5 or would have gotten from any other investment. *Past results are no indication of future performance.

Re:Went down, then came back. (2)

Joce640k (829181) | about 8 months ago | (#45608881)

The exact same thing could be said of any number of tech stocks that skyrocketed then crashed into nothingness about 10 years ago.

Some people got lucky, many many others got burned.

Or tulip bulbs...

Re:Went down, then came back. (1)

alex67500 (1609333) | about 8 months ago | (#45608521)

Dollars have been around long enough to earn their trust.

LOL

Re:Went down, then came back. (1)

Anonymous Coward | about 8 months ago | (#45609861)

The stupid "majicked out of thin air" comment wasn't talking about earning trust, though. It was just a meaningless indictment of all forms of currency, in a context that carried a ridiculous implication that bitcoin was somehow exceptional in that regard.

If other words, someone was talking out of their ass.

A rational person can distrust Bitcoin for rational reasons. But most people who talk shit about Bitcoin, are not doing it for rational reasons and don't ever offer any serious explanations for their stand. "Majicked out of thin air" is probably just a troll, but really does serve as an excellent example of what people with a 100% dogmatist attitude might say about Bitcoin. And you damn well know there really are people who think that way, and that religion still holds a lot of power in the world, especially in America.

Those people ought to be mocked just like you'd mock a creationist or anyone else who doesn't really understand a damn thing about the subject they're trying to talk about, and instead of offering actual arguments, they appeal to authority. Dogmatists are the scum of the earth, the very height of intellectual dishonesty. Treat them such.

Re:Went down, then came back. (0)

Anonymous Coward | about 8 months ago | (#45610077)

" "Majicked out of thin air" is probably just a troll, but really does serve as an excellent example of what people with a 100% dogmatist attitude might say about Bitcoin."

Let's keep in mind that there are also people _paid_ to espouse these 'points of view'.

There's a reason Persona Management Software exists, right?

Re:Went down, then came back. (1, Troll)

larry bagina (561269) | about 8 months ago | (#45607661)

The government collects taxes in USD. If you want to stay out of jail, you need USD.

Re:Went down, then came back. (3, Insightful)

Em Adespoton (792954) | about 8 months ago | (#45610831)

The government collects taxes in USD. If you want to stay out of jail, you need USD.

Maybe YOUR government does... I'm pretty sure most governments don't.

And many multinational corporations use means other than USD to "pay" their taxes, and never see jail.

I think there's a lot of room for a global fiat quantum currency; for numerous international trade situations, it beats USD (and the yuan, which is pegged to USD).

Re:Went down, then came back. (4, Insightful)

Anonymous Coward | about 8 months ago | (#45607899)

The US dollar is backed by the full faith and credit of the US government. Bitcoin is backed by absolutely no one.

Re:Went down, then came back. (3, Insightful)

ArcadeMan (2766669) | about 8 months ago | (#45608969)

The US dollar is backed by the credit of the US government? You mean the same US government that's neck-deep in debt right now?

Re:Went down, then came back. (1)

Thud457 (234763) | about 8 months ago | (#45609701)

Thanks for the set up:

The US dollar is backed by the full faith and credit of the US government . Bitcoin is backed by absolutely no one .

I'll give you one guess as to which of those two I put my trust in. /Frohike

Re:Went down, then came back. (2)

jafac (1449) | about 8 months ago | (#45611883)

The US dollar is backed by the full faith and credit of the US government.

Cool story, bro~!

Re:Went down, then came back. (0)

Anonymous Coward | about 8 months ago | (#45612461)

The "full faith and credit of the US government" now means that should you test that faith, and redeem your paper dollars, the government will happily hand you an equivalent number of paper dollars in exchange.

If you were expecting to redeem them for something like gold or silver, you're much too late.

Re:Went down, then came back. (1)

h0oam1 (533917) | about 8 months ago | (#45612533)

Backed in what way? They certainly don't guarantee any specific value of that dollar. In fact, they debase the value intentionally on a regular basis. The only guarantee you get from the government re: the dollar is that you can pay your taxes with it. What a deal!

Re:Went down, then came back. (1)

Saethan (2725367) | about 8 months ago | (#45607497)

I understand perfectly well. Didn't stop me from selling off all the btc I had sitting around a couple days ago.

Re:Went down, then came back. (1, Interesting)

petes_PoV (912422) | about 8 months ago | (#45607517)

The only thing keeping it afloat is other people believing the same fairy story.

But with "real" money, that fairy story is the credibility of the issuer - which rises and falls, but is damped by the inertia of the sheer volume of currency being transacted. Bitcoin has no issuer and therefore its only value is the confidence that its holders have that they will be able to exchange it at a reasonable rate. However there aren't billions of Bitcoin being traded and there's neither openness nor transparency regarding the future supply (i.e. Bitcoin inflation) so whatever "value" it trades at is difficult to rationalise and harder to predict.

So yes, it may be trading at a given value this minute, but that could be markedly different: up or down - no-one can say, tomorrow or in an hour's time.

Fix the volatility issue and it might be something that has some real-world use.But I wouldn't like to save for my oension in Bitcoins.

Re:Went down, then came back. (0)

Anonymous Coward | about 8 months ago | (#45607883)

The power of Bitcoin is often what people point to as its weakness - the fact that it isnt backed by any ~one~ conventional govt/issuer.

Think of when a country pegs its currency to the Dollar or to the Euro - Bitcoin is a currency that is "pegged" to any and all currencies that you can exchange it for.

Re:Went down, then came back. (4, Interesting)

Alioth (221270) | about 8 months ago | (#45608469)

No, Bitcoin isn't "pegged" to any and all currencies, it's free-floating. Rather too free floating and volatile as the case may be.

The problem with Bitcoin isn't the absence of a central issuer, but right now the problem with Bitcoin is its extreme volatility. At the moment it's almost useless as a currency and it's being used as an instrument of speculation. It's far too volatile for any merchant (perhaps except the black market) to take seriously since it's value relative to all other currencies swings so wildly and so quickly and you have to convert BTC into your local currency to be able to use any funds transferred to you for the mundane things in life like buying food, electricity, housing etc. If I want to sell a thing worth about US$1200 in BTC, if I sold it at 9am today for 1BTC and waited a whole 15 minutes to convert this to USD, in the intervening 15 minutes I would have lost around $300 because of a wild swing in its value that happened over a period of just a couple of minutes.

Re:Went down, then came back. (2)

Saethan (2725367) | about 8 months ago | (#45608695)

Handy that you can sell directly to a coinbase wallet and cash out immediately to your bank account, eh?

Re:Went down, then came back. (1)

Anonymous Coward | about 8 months ago | (#45610641)

Handy that you can sell directly to a coinbase wallet and cash out immediately to your bank account, eh?

In that case why not just trade in dollars?

A currency who's use case is: convert from another currency -> execute transition -> convert back to original currency is of limited utility.

Re:Went down, then came back. (1)

xednieht (1117791) | about 8 months ago | (#45611925)

Well you could have waited an additional 15 minutes and it would have gone back up ;-P It swings wildly both ways. I'm more curious to see what happens to BTC when inflation sky-rockets in the U.S.

Re:Went down, then came back. (3, Insightful)

Joce640k (829181) | about 8 months ago | (#45609219)

The power of Bitcoin is often what people point to as its weakness - the fact that it isnt backed by any ~one~ conventional govt/issuer.

No, it's a weakness.

Any number of entities (governments, Columbian drug cartels, Russian Mafia, etc.) could have been quietly buying up bitcoins for the last six months and sitting on them. Lack of liquidity creates a seller's market so bitcoin prices skyrocket as a result. When the time is right they can dump all their coins on the market for a massive profit. The price of bitcoin will crash and they can buy back their stock at a fraction of the price just in case it ever recovers.

This trick only works if you can do it in secret (so people mistake the lack of liquidity for market confidence - nobody wants to sell!!)

Bitcoin is a perfect target for it.

Re:Went down, then came back. (1)

Anonymous Coward | about 8 months ago | (#45610411)

Is the liquidity of Bitcoin vs the Dollar reflected in Bitcoin vs the Yuan or Bitcoin vs the Yen or Bitcoin vs the Real?

Bitcoin's potential value is its unique position as a meta-currency. Bitcoin lacking liquidity against any one currency doesnt mean it lacks liquidity vs ~all~ currencies that you can trade it for.

In other words, the more currencies that you can trade Bitcoin for, the more stable and attractive Bitcoin becomes. Its a hugely valuable potential shelter from unstable regional currencies/financial policies.

Re:Went down, then came back. (1)

Em Adespoton (792954) | about 8 months ago | (#45610903)

Is the liquidity of Bitcoin vs the Dollar reflected in Bitcoin vs the Yuan or Bitcoin vs the Yen or Bitcoin vs the Real?

Bitcoin's potential value is its unique position as a meta-currency. Bitcoin lacking liquidity against any one currency doesnt mean it lacks liquidity vs ~all~ currencies that you can trade it for.

In other words, the more currencies that you can trade Bitcoin for, the more stable and attractive Bitcoin becomes. Its a hugely valuable potential shelter from unstable regional currencies/financial policies.

It makes me wonder if Bitcoin is a useful hedge for the Bolivar, for example....

Re:Went down, then came back. (1)

Anonymous Coward | about 8 months ago | (#45609389)

the credibility of the issuer ... Bitcoin has no issuer ... there's neither openness nor transparency regarding the future supply (i.e. Bitcoin inflation)

It's issued by a decentralized network of miners, but how much they can issue is limited by the protocol. The supply is fixed at 21 million; half issued in the first 2 years, and half of the remainder every 2 years thereafter.

IMHO math is more credible than any appointed human.

Re:Went down, then came back. (1)

mc6809e (214243) | about 8 months ago | (#45609669)

You still don't understand that money can't be majicked out of thin air and be worth something?

Suppose I mine gold and hold it in a vault. I "magic" a piece of paper out of thin air that promises that gold to the holder on presentation of the paper.

That paper is worth something or not worth something depending on whether or not there is faith in the fairy story that the gold will actually be provided when the paper is presented.

It is after all just a piece of paper. How does anyone know they'll actually get the gold if they show up with the paper?

COMMIES AT HEART !! (-1)

Anonymous Coward | about 8 months ago | (#45607127)

Fear the unknown !!

Re:COMMIES AT HEART !! (3, Insightful)

ackthpt (218170) | about 8 months ago | (#45607299)

Fear the unknown !!

The reality is Bitcoin is stateless so China can't exert influence on it. Scares them, it does. Yes.

Re:COMMIES AT HEART !! (1)

Trepidity (597) | about 8 months ago | (#45607847)

I think China is more worried about people circumventing RMB exchange controls than who owns Bitcoin. They don't seem to particularly care whether people use Bitcoin. All they care is that Chinese financial institutions don't allow RMB to be converted via this route.

Re:COMMIES AT HEART !! (0)

Anonymous Coward | about 8 months ago | (#45608949)

They just exerted a lot of their influence by banning it from financial institutions. They don't need any crypto keys to shut it down for most of the population.

Re:COMMIES AT HEART !! (0)

Joce640k (829181) | about 8 months ago | (#45609127)

The reality is Bitcoin is stateless so China can't exert influence on it. Scares them, it does. Yes.

LOL!

China could buy up 90% of all bitcoins, creating an artificial scarcity. It would be a seller's market without anybody knowing why. Prices would soar. Idiots would be going crazy to buy them.

When it reaches $10,000 (or whatever) they could dump their coins on the market, making a handsome profit for themselves and ruining everybody else's day. Bitcoin would probably collapse as a result, allowing them to buy back their 90% stake at firesale prices. Rinse, repeat.

It's not just governments who could do this. Bitcoin is still small enough for any number of cartels to do it. I expect they're eying it up right now. They might even be the reason it's at $1000 today.

Re:COMMIES AT HEART !! (0)

Anonymous Coward | about 8 months ago | (#45612133)

They might even be the reason it's at $1000 today.

They must be... There's no logical explanation as to why the scenario you describe (if possible) hasn't already happened yet. Perhaps China would buy 90% of all BTC to discover they are the "greater fool" you guys have been predicting for years?

Since you're a market expert you should quantify this prediction, short bitcoin, and make a boatload of money in 10 years or so.

US/European chance to take lead back from China (0)

Anonymous Coward | about 8 months ago | (#45607141)

That's the one chance the US and Europe are gonna get, at taking the bitcoin lead back from China. The clock is ticking, tick tock, tick tock, use your time wisely.

Regulated like a commodity rather than currency (3, Insightful)

JcMorin (930466) | about 8 months ago | (#45607143)

It's not banned at all, it's said that bitcoin can be freely buy and sell by the people but it's regulated like a commodity (gold, silver, oil) and there is no guarantee or protection from the standard financial institution. Bitcoin will actually benefit from a statement like that. Governments and Banks stay away from my bitcoin and leave the real free market work!

Re:Regulated like a commodity rather than currency (0)

Anonymous Coward | about 8 months ago | (#45607183)

It seems we have a reading comprehension problem here. It is banned... banned from being used for transactions by financial institutions. No one inferred anything else. Sorry that you're knee jerked so hard that you wrote what the article said by saying the article didn't so it at all.

Re:Regulated like a commodity rather than currency (0)

Anonymous Coward | about 8 months ago | (#45607241)

Whatever the news is, it's always Good News For Bitcoin! (TM)

Re:Regulated like a commodity rather than currency (0)

Anonymous Coward | about 8 months ago | (#45607257)

Haha, OK there Jc. Let me know how your hyper-rational market works out for you.

Re:Regulated like a commodity rather than currency (0)

Anonymous Coward | about 8 months ago | (#45607473)

Haha, OK there Jc. Let me know how your hyper-rational market works out for you.

Works better than your hyper-inflatable markets.

Re:Regulated like a commodity rather than currency (0)

Anonymous Coward | about 8 months ago | (#45610661)

Governments and Banks stay away from my bitcoin and leave the real free market work!

At least until the Chinese government figures out how to counterfeit them and sells that tech to North Korea.

translation (1)

Anonymous Coward | about 8 months ago | (#45607149)

It is difficult to regulate and could be used for money laundering.
translation
we can't tax it, and that is bad

Re:translation (1)

Anonymous Coward | about 8 months ago | (#45607339)

Bitcoin should be easy to regulate, since it does have a money trail. Even though the trail has public keys only, at some point someone will need to exchange/pay for goods with the private key. This means that the feds could place a watch, and see where the money is moving to for taxs/criminal activity purposes (something they can not do with cash). Check out this story on how $100 million in bitcoins were stolen, but the thieves have hard time spending it since the whole Internet community is watching where the money is going (http://hackaday.com/2013/12/03/stealing-100-million-in-bitcoins/).

Re:translation (0)

Anonymous Coward | about 8 months ago | (#45608109)

I wonder how long it will be until someone makes a clearinghouse with another electronic currency, and converting to the other currency and back would result in "clean" BitCoins.

This isn't impossible -- one can create a Chaumian currency with "n" amount of units which would be similar to Chuck E Cheese tokens, but they only need to hold their value long enough for someone to swap BitCoins to that currency, then swap from that currency to "clean" BitCoins. Of course, the currency issuer is the weak link in this picture, but if the duration is short enough, the Chaumian currency's value may not be an issue. The currency issuer also can be anonymous as well.

Re:translation (2, Insightful)

mlts (1038732) | about 8 months ago | (#45608441)

This might be a weakness of BitCoin eventually. As blockchains get longer and longer, it gets more unwieldy to keep everything updated.

The closest thing is having to calculate every transaction (vending machine, gas station, bank, etc.) a Loonie [1] coin has been through since it was struck at the mint. Even though big-O is a linear function, after a while, the cryptographic calculations required for each transaction can add up over time, and when a BitCoin is broken into subunits, each subunit down to the satoshi will have its own separate chain that has to be run through.

Not a big problem now, but as BitCoins circulate through large amounts of users, it might become an issue, especially for large volumes.

[1]: Or quarter, or Euro, but Loonies are a decent unit for an arbitrary example.

Re:translation (0)

Anonymous Coward | about 8 months ago | (#45608995)

Or inflate it, and that is worse.

Does it mean, (0)

Anonymous Coward | about 8 months ago | (#45607169)

that current Bitcoin rally is over?

Re:Does it mean, (3, Interesting)

Joce640k (829181) | about 8 months ago | (#45607249)

It means it's attracted the attention of the big players so they'll be the only ones making big profits from now on.

Anybody with enough capital can manipulate the bitcoin market (just like any other stock/share) - creating artificial shortages to drive the price up, dumping it into the hands of greedy individuals when it peaks, buying back when it crashes down. Rinse, repeat.

Re:Does it mean, (1, Interesting)

sarysa (1089739) | about 8 months ago | (#45607387)

that current Bitcoin rally is over?

I for one wonder if this'll be the last big rally.

I've been absolutely terrible at predicting when this train will end. An unstable currency that is not suitable for the vast majority of merchants and individuals is doomed to fail eventually, but since I've been beating this horse Bitcoin has risen by 5000%. Rally #1 was the American public, rally #2 was from Greeks and other troubled European nations and now this rally is from the Chinese.

I wonder if anything significant is left? Regardless, it's way too high for me to even consider playing this game. I do hope something similar comes along in the future, perhaps it'll follow a similar pattern and I'll get on board early...

Re:Does it mean, (0)

Anonymous Coward | about 8 months ago | (#45607441)

New paradigms are only new once :V

Re:Does it mean, (2)

sarysa (1089739) | about 8 months ago | (#45607835)

Like I said, "similar", not "exact". Bitcoin is the poster child of the inflatable, independent currency experiment, but it shares traits similar to the stock market and limited quantity physical goods. It's not impossible for something which shares the traits that guided the valuation of Bitcoin to emerge. It'll likely be a long way off and possibly too difficult to identify in time to profit from it.

Re:Does it mean, (1)

sarysa (1089739) | about 8 months ago | (#45607911)

Oh, and just to fully recap my many posts ranting about Bitcoin, aside from what I've said already in this thread...I'm waiting for something to come along that provides the benefits of Bitcoin but without the price instability. Its stock-like nature is going to doom it because consumers (and more importantly, merchants) need more "familiar" price stability to become comfortable with and actually use a currency for currency purposes. The vast majority of current Bitcoin users are still speculators and unwitting individuals, along with some merchants who would probably prefer something more stable but need the anonymity to conduct business...and a few outliers here and there.

Anyone who's been burned once by previous crashes won't ever want to get back on board the Bitcoin train...

Re:Does it mean, (1)

supremebob (574732) | about 8 months ago | (#45611513)

I agree with you completely.

Let's put it this way... if you were about to start a long term contract for a big project, would you rather get paid in dollars (which will likely be worth at least 95% of what they are now at the end of the contract), or in Bitcoin (which may be worth anywhere from $10 to $10,000 each a year from now, depending on who you talk to)?

Bitcoin might work for buying a bag of weed or some cookies, but you would never use it to do real business until the currency stabilizes.

Re:Does it mean, (1, Informative)

Anonymous Coward | about 8 months ago | (#45608465)

/CSB: October of last year, 2012, I bought ~55 BtC at $12 each ($650). Just cashed out 20 ($20,240) for Xmas vacation and gifts and have a remaining 25 (~$27,500), that if they dropped back to $12 or completely disappeared overnight, I'd still be waaaaay ahead of what I earned at my 8-5 or would have gotten from any other investment. *Past results are no indication of future performance.

While you were beating your anti-BtC drum, how's that 401k doing for you? How's your market stability? Returns over time? How much "full faith" do you have in the companies in your portfolio? Any oil stocks in there? Who's gonna have the next major spill and fine from the EPA?

BtC is still REALLY early in it's run. We're still talking about buying and selling actual WHOLE BitCoin! My god! The whole design of BitCoin is that by the time the mining runs out ~2020, most transactions will be in Satoshi... that's 0.00000001 BitCoin. When 1 Satoshi = $1, the BtC economy will be (I've heard, but not calculated) multiple times larger than the sum of all other currencies in circulation. It'll also mean that 1 BtC =~$100,000,000. As far as the reality of those prospects, do some research on deflationary currencies. As long as there is a market, the value can't help but go up.

As far as a market being available, since almost anything [spendbitcoins.com] can currently be purchased directly with BitCoin, including Gold and Silver [coinabul.com] , Porn [pornsterr.com] , and just about any major retailer's gift cards [giftcardzen.com] , including Target for groceries, I think it has a reasonable chance at a long run. The biggest question has always been if the big financial institutions (FI) would see BtC as a threat or opportunity. If it's a threat, then they will have their government minions crack down on it and it'll go away. If it's an opportunity, (and the testimony before congress last month seems to indicate this is the way the FI want it played by the Fed Reserve), then they will keep it alive as a market to milk to and manipulate for a long time to come.

Re:Does it mean, (1)

Anonymous Coward | about 8 months ago | (#45609959)

If you think bitcoin will reach 100,000,000 would you cash any out for a vacation?

Well, that's just stupid (0)

Anonymous Coward | about 8 months ago | (#45607275)

They fear losing control, so they forbid the only element that they can control from participating?

Re:Well, that's just stupid (1)

die standing (2626663) | about 8 months ago | (#45607987)



or what they think is their control?

More importantly: (2, Funny)

larry bagina (561269) | about 8 months ago | (#45607297)

Did they also ban financial companies from tulip transactions?

Re:More importantly: (2)

jonbryce (703250) | about 8 months ago | (#45607523)

No. Most of the trade was in tulip futures rather than actual tulip bulbs.

Re:More importantly: (0)

Anonymous Coward | about 8 months ago | (#45608505)

Yeah, Rothschild's great-great-grandfather was mad as hell!

Re:More importantly: (0)

Anonymous Coward | about 8 months ago | (#45609191)

Did they also ban financial companies from tulip transactions?

Yes, that would kill the market for poppy seeds.

A Responsible Economy (1)

Anonymous Coward | about 8 months ago | (#45607361)

We all know the US is now run by crook like Wienerstein et. al. & they legalised shitcoin so it can be pilfered and pillaged in the customary rape-minded fashion as we saw in Denmark.

That China is banning their use for serious transitions, and is the most responsibly run economy on the planet right now, speaks volumes.
I don't think it has anything to so with control as attack minions/apologists will claim. China does nothing much to stop illegal pirating of movies, OS's etc.

They just don't want their economy bloated with fake wealth. Chinas' in the resource business. Together with Russia, and India (other responsibly run countries) they have the largest stockpiles of gold (a real com commodity) they are growing and will be the new 1st world together with Brazil (BRIC) maybe even South Africa.

They will all oppose bitcoin no doubt. Well done China, though it's hop real surprise or news to a sane person that China wouldn't use something even less trusted than paper money. It's also FaR more easily co-opted than paper money (which is regulated directly by China and won't suffer serious deflation or inflation like shitcoin). Wake up and smell the ponzi coin people.

Re:A Responsible Economy (1)

ElectricTurtle (1171201) | about 8 months ago | (#45607641)

"the most responsibly run economy on the planet right now"

BWAaaaaHAHAHAHAHAHAHAHA! Oh wait, you're serious?

Do you have any idea what the debt load is of the provincial governments? Do you even know that provinces and other lower levels of the Chinese government are taxing their constituents months, sometimes years in advance to try to maintain solvency?

Do you know that the statistics on things like the expansion of electrical power usage do not line up in any even remotely sane way with the CCP's claims of GDP growth and many economists believe that their rate of growth is now the same as the stagnant West?

Do you know anything about the economic reality in China at any level above shit you make up to promote your pet theories?

Re:A Responsible Economy (1)

Jack9 (11421) | about 8 months ago | (#45611281)

Do you have any idea what the debt load is of the provincial governments? Do you even know that provinces and other lower levels of the Chinese government are taxing their constituents months, sometimes years in advance to try to maintain solvency?

So what?

Do you know that the statistics on things like the expansion of electrical power usage do not line up in any even remotely sane way with the CCP's claims of GDP growth and many economists believe that their rate of growth is now the same as the stagnant West?

The US has done quite a bit of magic (GDP now incorporates movie production costs? Do you understand what QE is?). While I can agree that numbers have been altered, I'm not sure it's relevant to compare 2 lies. that leads into...

many economists believe that their rate of growth is now the same as the stagnant West?

When you talk about "the stagnant west" I have to wonder what you even mean? The US is a different beast from the UK and Germany but similar to Greece in function, not location. A lot of people are wrong all the time about broad subjects so please be a bit more specific about differing opinions. I wonder what you mean by rate of growth? The steel industry (as well as most rare earths) has been dominated by China for over a decade, for example. I guess that's stagnant? The trade deficit in the US is obscene, mostly due to imports from China so I'm sure anyone you're talking about can at least throw out an industry sector where they are choked. Whichever economists you are referring to (just name some please?) I suspect they aren't saying what you are. I'm willing to read up on alternate theorycraft.

Re:A Responsible Economy (1)

ElectricTurtle (1171201) | about 8 months ago | (#45612009)

This is exactly what I'm talking about, the realities of economics in China as experienced by actual Chinese citizens. I tell you people are being taxed years in advance, and you say "So what?" Yeah, you really understand and care about what's happening in China. Hell, you'd fit right into the Chengguan, which you probably don't even know anything about without looking it up.

GDP should contain movie production costs. Do you even know what GDP is? What makes you think making a movie and selling it is ultimately any different from making a John Deere tractor and selling it? It's the economy, stupid. Even if US GDP is fudged slightly (which could be said of practically any economic metric), the PRC's is drastic. At least 5%, and when you're talking about the second largest economy on Earth, that's hundreds of billions of dollars.

What point is there on zooming in on x or y industry? Sure there are growth sectors in any country, but we're talking about aggregates. I mentioned that the growth in usage of electricity in China doesn't match GDP because, most economists agree, electricity is one of those things that goes up in demand commensurate to the growth in all other sectors, because basically everything needs energy to run. As for specific economists, I'm not paid to be your research bitch. I've spent a lot of years following news and events in China, and if you really want to learn something do your own reading [lmgtfy.com] . The first several articles all deal with this issue.

Re:A Responsible Economy (1)

Jack9 (11421) | about 8 months ago | (#45612441)

> Yeah, you really understand and care about what's happening in China. Hell, you'd fit right into the Chengguan, which you probably don't even know anything about without looking it up.
> GDP should contain movie production costs.
> What point is there on zooming in on x or y industry? Sure there are growth sectors in any country, but we're talking about aggregates.

The majority of this post is not on the point we were discussing. As I understand it, the topic was the relative fiscal responsibility of the Chinese government, in relation to other world markets or nations. I do not think you have demonstrated the opposite or even shed some doubt on it.

using BTC to buy yuan can drive yuan up... (3, Interesting)

ananaMous (1478083) | about 8 months ago | (#45607377)

... & they can't have that, now, can they? The push here seems to be to decouple the yuan in any big way from their own currency markets & see how that goes. As long as it means a low yuan, that might be fine by them. But then one yuanders: who really has the pretend currency?

Somebody inform China and the rest of the world.. (1)

3seas (184403) | about 8 months ago | (#45607397)

All money is nothing more than an abstract representation of value. It was created to ease trade (to overcome limitations of barter). And the only value in this abstraction we call money is the agreed upon use of it. Problem is, all of this abstract value representation has been abused so badly that it no longer is a genuine honest representation of the real values its supposed to represent. The proof is obvious, once its realized that with all the bankruptcies there is not a single person that can show me the less than zero real value that is supposed to be represented by the less than zero numbers of bankruptcies. Furthermore for a perfect example of how this abstract tool of money can be and has been so wrongly abused and manipulated against the real values its supposed to represent, google "trillion dollar bet" and educate yourself of how much was stolen in real value via abstract representation of real value.

Somali Shilling (0)

Anonymous Coward | about 8 months ago | (#45607681)

Buy Somali Shillings, they have gained 33% over the $ this year, because no new notes have been printed since 1990.

Bitcoin is Volatile. (0)

Anonymous Coward | about 8 months ago | (#45607955)

So Bitcoin dropped 20% today, due to china's announcement.
Bitcoin dropped 20% three days ago for NO REASON.

If it keeps at the same rate it is now, I'll have my house paid off by march.

The price of BTC drops in response to this... (1)

achileas (2927229) | about 8 months ago | (#45607979)

...and it's still higher than what I sold the last of my BTC for.

Sounds like a GOOD thing for Bitcoin (3, Interesting)

gman003 (1693318) | about 8 months ago | (#45608239)

Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.

So it is a *good* thing for some of those banking institutions from being prohibited from using Bitcoins. And really, banks do not need to be dealing with Bitcoins - do you really want a bank to be taking your money and "investing" it in Bitcoin?

Classifying it as a commodity, like gold or silver, for regulatory purposes makes sense, and much like there are few regulations on gold and silver themselves, these are regulations on the banks, not on Bitcoins.

Now, the anti-money-laundering stuff may be a cumbersome burden on Bitcoin exchanges, and tries to defeat the entire purpose of Bitcoin's pseudonymity, but the US already has similar restrictions, and they're not restrictions that are completely unreasonable. In fact, wouldn't regulations on converting Bitcoins to and from other currencies make people more inclined to use Bitcoin as an actual currency, instead of just a carrier system for other currency (the buyer buying BTC to immediately spend, and the seller immediately converting it back to a "usable" currency)? Even their attempts to undermine it seem likely to strengthen it.

Re:Sounds like a GOOD thing for Bitcoin (0)

Anonymous Coward | about 8 months ago | (#45608483)

It'd be easier to use as actual currency if you could pay my mortgage, utilities and restock your shop for BTC. As it is, you still need to exchange it to and from local currency all the time, so it can be a considerable brake for adoption if exchanges' operation get throttled.

Re:Sounds like a GOOD thing for Bitcoin (2, Insightful)

Anonymous Coward | about 8 months ago | (#45608721)

Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.

oh wait your serious...

Bitcoin is pure speculation at its finest. When it crashes (and it will). You may want to change your tune.

Gov controlled money was created to stop fluctuation in price (it works to a degree). Price along the lines of I dont know if I can buy a loaf a bread today or a Ferrari. Everyone pretty much demanded the Gov do *something* anything. They lucked into the particular one they have now. You can also see how they are overusing particular things and making the same mistakes over and over again too.

Bitcoin will have a different problem eventually. The size of the chain will be so big it will carry its own burden of time along with it to use. Most currencies do not have the problem of having to carry around the baggage of everyone who has ever had a dollar bill. Just so you can say 100% for sure you own it.

Even their attempts to undermine it seem likely to strengthen it.
What will crush it is the same thing that crushed the gold standard dollar. Inflation. The market is a harsh mistress.

Right now you can use Bitcoin to do some 'anonymous' transactions. However, that is strictly predicated on a bubble of good will. You can see it in day to day news. News story comes out value falls. Over and over. So yeah go for it. Load up on those beanie babies.

Though I think it is an interesting experiment. My guess the bubble bursts when they 'give away' the last bitcoin. I hope it doesnt as it would be an interesting experiment in a fixed size monetary economy. But history is unfortunately on the side of 'it will crash'.

Re:Sounds like a GOOD thing for Bitcoin (0)

Anonymous Coward | about 8 months ago | (#45609673)

OMG so much stupid

"oh wait you'Re serious"
"When it crashes" Of course, you guys just haven't been able to put an actual date on that for years...
"The size of the chain will be so big it will carry its own burden of time along with it to use" Off-chain transactions.
"What will crush it is the same thing that crushed the gold standard dollar. Inflation." Fixed supply, Sherlock.
"My guess the bubble bursts when they 'give away' the last bitcoin." Subsidy halves every 2 years, but will continue even when the subsidy is below 1 BTC.

Re:Sounds like a GOOD thing for Bitcoin (0)

Anonymous Coward | about 8 months ago | (#45611327)

> Fixed supply, Sherlock.

It isn't fixed. Bitcoins are lost all the time. Fixed supply is bad. You want STABLE fixed supply idiot.

Re:Sounds like a GOOD thing for Bitcoin (0)

Anonymous Coward | about 8 months ago | (#45612003)

What will crush it is the same thing that crushed the gold standard dollar. Inflation.

Fixed supply, Sherlock.

It isn't fixed. Bitcoins are lost all the time. Fixed supply is bad. You want STABLE fixed supply idiot.

Right, just like dollar bills and gold doubloons which never get lost. And that's deflation you're whining about, not inflation!

At this point I can't believe a human being is really this ignorant about something he evidently cares so much about. Good troll, sir.

Re:Sounds like a GOOD thing for Bitcoin (1)

Anonymous Coward | about 8 months ago | (#45609111)

You forgot c) to profit from the scam.

Re:Sounds like a GOOD thing for Bitcoin (1)

bob_super (3391281) | about 8 months ago | (#45609767)

Bitcoin exists because people can mine by themselves.

Have massive spare computing power? Make essentially free money!

Very few people want to put down $1000 to by that virtual thing that can crash any second now. But a lot will play if they don't have to put money down.

Re:Sounds like a GOOD thing for Bitcoin (1)

ultranova (717540) | about 8 months ago | (#45609891)

Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.

That's part of it, but there's another reason: Bitcoin is simply the fastest, most convenient and secure way to send and receive payments over the Internet. No need to submit your credit card information, no waiting for wire transfers to complete, no worries about PayPal suddenly deciding they don't like your business and freezing your funds.

Bitcoin has an ecological niche in the Internet age economy.

Commodity vs. Money (0)

Anonymous Coward | about 8 months ago | (#45608659)

So, who are we supposed to believe, the Central Bank, or some East Texas judge?

An Inquiring Mind

Re:Commodity vs. Money (0)

Anonymous Coward | about 8 months ago | (#45610101)

So, who are we supposed to believe, the Central Bank, or some East Texas judge?

An Inquiring Mind

Many people choose to only believe things that they suspect to be true and/or on which entity can make your life more pleasant and/or more miserable. Very few things have objective truth or unambiguous categorization. The idea of truth is overrated and generally misused as a platform for pendants.

Of course a inquiring mind would attempt to find out the truth themselves rather than rely on rhetoric (or an internet forum). Of course a inquiring mind is a rare thing, but pendants rain [sic] all over the internet.

If you put on your das Ding an sich, bitcoin isn't commodity or money, but it is what you experience it to be.

you 1nsensitive clod! (-1)

Anonymous Coward | about 8 months ago | (#45609061)

for it. I don't there are conglomerate in the start a holy war I read the latest Dying. See? It's with tHOUSANDS of for all practical

Nootropic sales (1)

frog_strat (852055) | about 8 months ago | (#45609247)

A lot of nootropic (supplements for better mental function) purchases are made with bitcoin in China. I hope this doesn't ending making things more difficult.
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