
Bitcoin mining companies face shutdown in southwest China - petethomas
http://en.people.cn/n3/2017/0601/c90000-9223021.html
======
pmorici
A little context for this. China cracked down on Bitcoin exchanges earlier
this year and stopped all withdrawals of Bitcoin from exchanges. Reports just
in the past few days are that they have finally re-enabled Bitcoin withdrawals
at the major exchanges in China. Some mining operations are closely linked to
exchanges so perhaps these shutdowns are related to the scrutiny of the
exchanges.

Also shutting down one miner just makes the remaining miners more profitable
in the long term. In the short term though ~1 week it has the effect of
reducing the rate at which Bitcoins are generated until the difficulty re-
target is reached.

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

~~~
mahranch
> Seems to me as though Bitcoin mining is kind of a backdoor way to move
> Chinese money offshore

Which is why China is trying desperately to get control. They limit how much
money their citizens can move around, whether it's Yuan, stocks or foreign
currency, everything is limited and monitored. Bitcoin is no exception.
Except, I think it's more nefarious than that. Bitcoin stands for everything
China is against. A (mostly) anonymous currency which is decentralized? It's
practically the opposite of China's ideology, a country which has strict
controls on just about everything within their borders.

If I was the PRC, I'd move to damage, corrupt or if possible, destroy bitcoin.
At the very least, I'd dig my claws in somehow, someway so I had some (even if
it's just a little) control. But if I was China, how would I do it? I couldn't
just create "The Exchange of the People's Republic of China". I'd have to do
it through a proxy of some sort. There were some rumors on reddit about
Chinese nationalist Jihan and his company Bitmain being such a front. I'm no
tinfoil hat kind of guy, but the more I think on it, the less of stretch it
seems...

~~~
rwcarlsen
There are many who believe that the company Blockstream is a hostile takeover
trying to prevent bitcoin's success. It just depends on where you read. Lots
of censorship on r/bitcoin and lots of echo-chambering on r/btc.

Not that it's worth anything, but Jihan (although he has a suboptimally large
amount of influence in/on the bitcoin community) has yet to demonstrate
anything but a desire for it to succeed IMHO.

------
chenster
China Bitcoin Miners Documentary: [https://video.vice.com/en_us/video/life-
inside-a-chinese-bit...](https://video.vice.com/en_us/video/life-inside-a-
chinese-bitcoin-mine/55b910f39820ecc47f68c306)

~~~
Kostic
Mirror? Not available in Serbia, for some reason.

~~~
askmike
[https://www.youtube.com/watch?v=K8kua5B5K3I](https://www.youtube.com/watch?v=K8kua5B5K3I)

------
njarboe
Bitcoin to me seems like a great currency for oligarchical/plutocratic type
governance systems. Authority can know what addresses are controlled by who,
give people privacy and the feeling of security, and can create a hierarchy of
knowledge where people get increasing insight into the country's(world's?)
economy/social graph as they reach the top of the power pyramid. All
transactions are recorded for all time. Great.

~~~
hackeraccount
Yeah but the block chain is available to everyone. So potentially anyone
outside - or even worse inside - the oligarchical/plutocratic can have an idea
of just what the heck is going on. Best keep that genie in the bottle.

It reminds of what some Soviet leader (Krushchev, maybe?) said when asked why
he was against an "open skies" Treaty.

"We have nothing to hide. We have nothing and must hide it"

------
andy_ppp
Won't the bitcoin miners just move to Vietnam or Thailand or Taiwan or Macau
or some other place? It's not like these bitcoin miners have no money to
relocate...

~~~
xiaoma
It's not super easy for Chinese nationals to move to Taiwan (Due to regular
threats from Chinese generals, blocking Taiwan's bid to join the UN repeatedly
for decades, "Anti-secession" laws requiring invading TW, etc).

Even setting the political issues aside, Taiwan, Thailand and Macau are all
pretty bad choices. They don't have particularly cheap power and they're hot,
which drives up cooling and thus power requirements.

Iceland is still pretty much ideal. It has cheap Geothermal power and natural
cooling.

[http://www.businessinsider.com/photos-of-iceland-bitcoin-
eth...](http://www.businessinsider.com/photos-of-iceland-bitcoin-ethereum-
mine-genesis-mining-cloud-2017-5)

~~~
vit05
Kazakhstan has cheaper electricity than Iceland. It has the second coldest
capital in the world and has an extensive border with China.

------
neom
Is there anywhere to read about the probabilities of and implications of
sweeping multinational policy around cryptocurrency/bitcoin? Also, could a
country make it's own crypto currency somehow pegged to it's national
currency? A lot of my friends are really deep in bitcoin now, I can't tell if
I should worry or not.

~~~
runeks
> Also, could a country make it's own crypto currency somehow pegged to it's
> national currency?

Sure, but what would the point be? It would only be a cryptocurrency in name.
No reason to go through the trouble of using a blockchain if you're just
trading credit. The selling point of Bitcoin is decentralization, and pegging
requires centralization (a counterparty who will transfer national currency to
your account upon receiving crypto-coins).

~~~
crdoconnor
"Sure, but what would the point be? It would only be a cryptocurrency in
name."

It could be used as a way for the government to tie its own hands and thus
make a more credible promise about future the rate of money creation.

Ecuador did this in 2000 via dollarization, which introduces other problems
which a blockchain would not.

~~~
askmike
You don't need cryptcurrencies to do this. I guess you can, but if that is
your main reasons you will probably face more trouble than you'll solve.

------
Uberphallus
I'm surprised this comes out now, right in the middle of the noise about the
UASF (User Activated Soft Fork) and Segregated Witness controversies.

The community is pushing to enable larger blocks among other functionalities
that would cult down on the fees that miners (read: Chinese miners) collect.

Obviously the miners won't agree on that, but the network agreement depends on
what the Bitcoin processing power decides, not on what the majority of the
users do. At some point either the miners join, the users give up, or the
chain forks in two (obviously with wildly different valuations).

I'm not familiar with People.cn, but my first reaction with the headline is
that the piece of news has second intentions.

~~~
rc_kas
THANK YOU FOR SPELLING OUT YOUR ACRONYM!!!!

So many internet idiots just use acronyms all the time on the assumption that
everyone speaks the same language as them. I wish more people would take your
approach.

------
perlpimp
ok heres my take on this, they do these random shut downs to keep miners on
their toes. in some article it has been explained this is how china has
implemented firewall policy. if they detect unknown traffic they constrict
your flow gradually until you can't do anything. this might be one of those
moves, not a clear restriction but rest of miners should be aware of impeding
wave of problems caused by PRC oligarchs.

------
chenster
> Mining Bitcoins is a global effort, so even if mining is banned somewhere,
> the total amount of Bitcoins does not change, and so the global price will
> not fluctuate, an industry insider said.

This is not true. Bitcoin price swings like crazy.

~~~
deftnerd
The majority of Bitcoin mining is located in just a few geographic regions
that happen to have inexpensive power. China, The Republic of Georgia (special
backroom deal with the president and BitFury), North-East Canada, and parts of
North-West US that have cheap hydro power.

If China is really rooting out the bitcoin mining operations, it represents a
huge change in the makeup of the mining/hashing industry

~~~
bernardlunn
Why does China have low cost power? I understand the others you mention, but
is it from subsidies in China?

~~~
c3833174
Partly because of the government building hydro plants in suitable places even
if there's little to no demand.

------
known
Bitcoin mining is a trap; Better late than never;

------
taoice
Is it reason of btc price down ?

------
timwaagh
i say it is about time government cracks down on this tax-avoidance ponzi
scheme. bitcoin is a great achievement technically but it has only negative
consequences for soceity at large.

~~~
statoshi
If bitcoin is a ponzi scheme then every publicly traded asset is a ponzi
scheme.

~~~
timwaagh
most of these assets get you something. like (parts of) voting rights in a
company. or the ability to sell those rights at a fixed price at some fixed
date. bitcoin just offers you the right to say 'i got 10 bitc'. if you'd say
every currency is a ponzi scheme that is harder to disprove. because if space
aliens invade and bring their own currency, your dollars will be worth zero.
all the same real central banks have the ability to adjust money supply
depending on demand. which ensures that money keeps its value as long as
government does not fall. bitc is worse, because it annot insure this. because
it has no central bank and its supply is more or less fixed, ensuring that
once demand drops, the value of bitc drops as well.

------
_pmf_
Intervention from China will stabilize Bitcoin.

------
howscrewedami
China banning bitcoin would have a huge negative impact on cryptocurrencies
worldwide. But what if... that's exactly what the chinese government wants?
What if this is all a scheme to short sell bitcoin?

~~~
Analemma_
The Chinese government holds $3.5 trillion in U.S. treasuries. The profit from
"short-selling bitcoin" wouldn't even qualify as a rounding error to them.

~~~
SimonPStevens
It might be insignificant to China the country. But a government is made up of
individuals.

It's entirely possible that in an already corrupt environment, the dozen or so
individuals on the crypto committee may be convinced to make decision that
benefit them personally.

Make a few impactful decisions at your day job, block a few exchanges, short
bitcoin personally, profit personally. Wouldn't be hard to make a million or
two if you knew of a price fall coming up in advance, there are plenty of ways
to get leverage on the bitcoin markets these days.

~~~
dreamthtwasrome
Seems like the operative gambit would be one-or-more miner/exchange pays govt
official(s) lots of money to "crackdown" on BTC, except not as much on them.
win-win

