

Chinese can now buy real estate with Bitcoin - peter123
http://www.finextra.com/Community/FullBlog.aspx?blogid=8475

======
tokenadult
From the article: "The current run-up in the price of Bitcoin is an indicator
of the interest in the currency, but is likely largely due to speculation."
Reporting by economically literate journalists familiar with the situation in
China points out that China's housing market is a bubble.[1][2] The
speculation in the current residential housing market in China is because
middle-class investors cannot find a better investment vehicle, and because
they are making unrealistic assumptions about future demand. What's
unrealistic about the demand is that migrant workers moving legally to Chinese
cities (as they already move illegally) will not possibly be able to afford
current market prices for new housing units in China. There is a _huge_
oversupply of housing that is too expensive for anyone to buy who is in the
market for a place to live (as contrasted with being in the market for a
speculative investment vehicle). The bubble will have to pop. When the China
housing bubble pops, China's whole national economy will be severely stressed,
and political instability may erupt. The ability to buy houses with Bitcoin
reported in this thread is just one more sign of a bubble housing market in
China.

[1] [http://finance.yahoo.com/news/uncomfortable-truth-chinas-
pro...](http://finance.yahoo.com/news/uncomfortable-truth-chinas-property-
market-084546007.html)

[2] [http://www.forbes.com/sites/realspin/2013/10/28/in-china-
the...](http://www.forbes.com/sites/realspin/2013/10/28/in-china-theres-not-
one-city-sans-terrifying-stretches-of-empty-houses/)

------
fiatmoney
Funnily enough, the real estate market is exempt from most money laundering
regulations.

[http://www.zerohedge.com/news/2013-09-10/money-laundering-
ex...](http://www.zerohedge.com/news/2013-09-10/money-laundering-exposed-key-
component-housing-bubbles-all-cash-bid)

~~~
im_a_lawyer
^ this. The amount of "ultra-luxury" towers going on in my city is way too
high. Who the fuck has $800,000 cash? Numbers don't add up.

------
mrb
FWIW, China seems to be tacitly approving Bitcoin. State-controlled CCTV has
been broadcasting more and more news segments about the currency that are all
very favorable and positive(!)

A lot of chinese Bitcoin users have reported this stance, eg:
[https://bitcointalk.org/index.php?topic=320260.0](https://bitcointalk.org/index.php?topic=320260.0)

~~~
bpodgursky
Why would China not like bitcoin? They can

\- track all financial transactions by all people to find dissidents and find
NGO funding sources

\- throw 10% of a datacenter at it whenever they feel like it and pull off a
51% attack

\- lock up a huge number of bitcoins via the above point

~~~
Tuna-Fish
> throw 10% of a datacenter at it whenever they feel like it and pull off a
> 51% attack

The rise of ASIC miners have made the BTC network essentially invulnerable to
attacks from general-purpose devices. SHA is very amenable to being directly
implemented in hardware, making general purpose computers useless for bitcoin.

Because of all the new hashing power coming from all the new asic miners,
difficulty has risen to the point that you'd need more than _four hundred
million_ modern cpu cores to take over the network. Using top of the line
GPUs, you'd need more than 5 million of them.

China could take over the BTC network, however, to do so they would have to
attack it with ASIC miners. This would imply ~6 months of preparation, tens of
millions in funding, and they'd have to make the decision to pull the trigger
some 3-4 months in advance or the money would go to waste.

~~~
tptacek
China spends $40MM/yr on Post-Its.

~~~
mrb
It would cost a _lot_ more than $40 million to majority-attack Bitcoin. I
estimate $3-4 billion or more. Mostly data center costs.

Let's assume an attacker is very good and needs only 6 months to design his
own ASICs and build data centers to host the farm. The network is at 4 Phash/s
today, so 6 months from now we should be around 4 * 2^6 = ~250 Phash/s (the
network has been doubling in size every month for the past 10 months). The
best ASICs, 28nm KncMiner, are approximately 100 ~Ghash/s and 100 Watt each.
So an attacker would have to build 250 Phash/s of these to clearly outperform
the network: that is 2.5 million chips at 250 megawatt total. And to plan for
a potential delay of 30 days in his plan, an attacker would have to build not
250 Phash/s but 500 Phash/s of ASICs to attack the network. 5 million chips.
500 megawatt data center. For comparison, Facebook spent $210 million on their
28 megawatt Prineville data center. So a 500 megawatt data center would
probably cost $3-4 billion. Even the well-funded NSA couldn't get their
comparatively punny Utah data center to run correctly and it has been delayed
by more than 1 year: [http://www.pcworld.com/article/2052960/nsa-data-center-
suffe...](http://www.pcworld.com/article/2052960/nsa-data-center-suffers-
meltdowns-is-delayed-by-a-year-report-says.html)

Is China seeing Bitcoin as a threat? No. And even if it was, is it big enough
for them to be willing to spend $3-4 billions to destroy it? I don't think so.

~~~
tptacek
Bitcoin. It might work, as long as no large government in the world decides to
make it stop working.

~~~
mrb
Governments cannot stop Bitcoin on a global scale for the same reason they
cannot stop Internet on a global scale.

There is no cost-effective way to destroy a well-designed decentralized
technology/protocol, plus it would require co-operation of most countries to
destroy it.

~~~
tptacek
You mean, unless they buy enough asics.

~~~
mrb
Did I not demonstrate in a back-of-the-napkin way that it is out of reach of
the NSA ($3-4 billion & deploying 500 megawatt within 6-7 months)? If the NSA
cannot do it, no government can.

~~~
eli_gottlieb
Never call something impossible when there are political and financial points
to be scored by doing it.

------
mfringel
28000 CNY/sqm * ~.1 sqm/sqft * .16 USD/CNY = ~$448/sqft.

That's coming up on prices in SF, and a little bit more expensive than Boston.
I had no idea.

~~~
ihsw
The Chinese property market/household market is a fickle thing -- a lot of it
revolves around speculation. There is a suspicion that there will be a large
migration of rural workers to urban regions.

And _large_ is an understatement -- everybody is betting everything on it.

~~~
maaku
> a lot of it revolves around speculation

Pretty much all of it. People in Shanghai, for example, use properties as a
cash-storage mechanism, thinking it more secure than a CD.

This is all going to end badly.

------
gbog
One reason for Chinese government to dislike bitcoin, and it is probably the
same reason for Chinese individuals to be interested in it: bitcoins make it
very easy to hide cash in your pocket at the customs.

People may not realise it but the big issue for many Chinese or foreigner
earning money in China is to get it out of the country. The contemporary art
market is in fact fueled by this escaping money, because it is easy to under
evaluate a piece of paper with two strikes on it, but recently there is a
crackdown against that and experts are checking luggages. Bitcoin might be a
much better alternative.

------
creativeone
So, I own investment real estate that I wouldn't mind selling for bitcoins. Is
there a good place to find buyers who want to pay with Bitcoin?

~~~
r3m6
Why would you care about in which currency you are paid?

~~~
GigabyteCoin
It's not easy to buy $500,000 worth of bitcoins on the open market at "current
value".

~~~
TomGullen
Someone bought ~$1mm on gox a few days ago without too much trouble I think

~~~
GigabyteCoin
They did, but it sparked a frenzy of buying shortly afterwards...

------
robk
I wonder how much of the current BTC price spike is due to new Chinese coming
into the market?

~~~
jamoes
A lot of the current price is because of the Chinese market. If you follow the
price surges, usually the exchange BTCChina is the one that starts rising
first, followed by the US exchanges. The Genesis Block did a good analysis on
the Chinese markets a few weeks ago [1]. I really like the bottom chart in
that article, which graphs the price differential between Chinese and US
exchanges.

[1] [http://thegenesisblock.com/bitcoin-climbs-highest-price-
sinc...](http://thegenesisblock.com/bitcoin-climbs-highest-price-since-april-
led-cny-movement/)

------
mmagin
And yet, they still cannot invest in foreign stocks.

~~~
maaku
Those with money do. (Often through BVI shell companies).

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trevelyan
The real question is when they start selling real estate to use bitcoin to
move their assets outside China where there is greater ROI.

~~~
simbolit
you realise that if someone is buying real estate, someone needs to be selling
it, right?

~~~
xux
there's no shortage of sellers in the Chinese real estate market. It's a
bubble.

------
tn13
I suspect that the whole Bitcoin thingy is a Chinese conspiracy.

~~~
gbog
Then it would have been clever and borderline perverse to use a Japanese
disguise for the creation of bitcoin.

Anyway, I think the mystery around bitcoin I'd very captivating a story but
probably the answer is more simple than these conspiracy theories, and I was
surprised the day I read pg himself give credit to them.

