

China is not banning Bitcoin - thbounzer
https://bitcointalk.org/index.php?topic=358368.0

======
lingben
Of course not. No one said they were banning bitcoin. They have relegated it
to a digital barter similar to other digital points like those used in World
of Warcraft or SecondLife's LindeX.

What they have done is to shut it out completely from the formal Chinese
banking and financial system. So much for the debate about bitcoin being a
currency!

~~~
spenvo
_Sorry in advance for this wall of text and the redundant use of the word
"currency." It makes for a shitty read, but I couldn't find a better way to
construct my comment._

All joking aside [0], you seem a little over eager to discount Bitcoin in this
regard.

Here's my take on BTC's relevance as a currency:

\- Its 'success' as a currency in the developed world (in the way we use
greenbacks & fiat / Chinese use Yuan in daily life) ...

... on this point, I've never been too hopeful. [1]

This definition of "success" is biased by most of our developed-world
perspective. . _tldr; - It will likely become 'relevant' without becoming a
'success' in the Western/1st-world sense._

.

Observations on why Bitcoin will struggle to become a ubiquitous currency:

1.) This statement from the PBOC - more or less negates its chances in China
as being a "first-class citizen" (status) currency.

This comes as no major surprise to me. But, what _is_ surprising is the
portion which reaffirmed the legality of the participation in Bitcoin in China
("... Bitcoin transaction as a commodity trading behavior on the Internet,
ordinary people have the freedom to participate in the premise of own risk."),
as you alluded to in your comment. This more than "leaves the door open." That
said, the factors which contributed to this approach are unbelievably complex
and probably nefarious (w/regards to BTC's future).

2.) In the USA, I don't see a pressing need for it to be used in the way we
know dollars to be used. The reason here is that we have a historically stable
system in place.

3.) The volatility of Bitcoin is not, and likely will never be, as stable as
most of the fiat units in circulation. This would discourage me from paying my
employees in Bitcoin.

4.) Since day one, we have all been apprehensive about the deflationary nature
of the currency -- expressing the Keynesian-concern that spending in an
economy is vital to the prosperity of said economy.

.

With that being said, here is where-and-why I'm long ...

I.) ... because of the international nature of the protocol, one must think
about those living in Iran, Zimbabwe, Argentina, Russia, etc.. In those
places, I think it has legs as a currency, regardless of state-endorsement.
Some of these states in crisis may even endorse Bitcoin.

I believe that perfection isn't sought after in the 3rd world, as confidence
has been lost in the fiat systems in place. (This is the reason why greenbacks
are so ubiquitous abroad.)

There's also a palpable anti-American sentiment in the third world that
_could_ discourage greenbacks' usage by the layman if there were a viable and
universally accepted alternative.

But paper greenbacks don't play well with the internet. Bitcoins do. One can
argue that you could still use greenbacks digitally abroad, but this is not
without large transaction fees, and -- in the case of unstable countries --
there may uncertainty in the bank which is facilitating the financial
services.

II.) ... it's nature has melded the idea of a cash dollar and a digital dollar
into a decentralized, ephemeral-yet-"trustworthy" protocol. I can honestly
say: I'd be a fool if I claimed to have the slightest idea how Bitcoin will
innovate and make itself useful as a currency.

So, I actually believe that Bitcoin has relevance as a currency, just not in a
way that would make sense to the developed world.

The above is part-and-parcel from Bitcoins as a store of value and other
financial novelties, which I don't really have the time to enumerate.

[0] - "So much for the debate about bitcoin being a currency!"

[1] - [and it saddens me greatly, because I'm a Bitcoin fanboy, and I've
believed since the early days that Bitcoin is special in many other ways. And
no, I'm not a Bitcoin millionaire.]

If you enjoyed this comment - I am releasing a Bitcoin-related service in ten
days, and, in the idealistic spirit of Hacker News, I kindly encourage you to
add me to Google+ or Twitter, so that you can offer early feedback. @spencenow
or
[https://plus.google.com/+SpencerDailey](https://plus.google.com/+SpencerDailey)
Thanks! :)

~~~
lingben
I understand you have a vested interest in bitcoin and for that same reason I
would suggest you take a few basic economic courses so you can understand what
a currency is and why it is impossible for bitcoin to be a currency.

> But paper greenbacks don't play well with the internet. Bitcoins do.

This is simply false. The evidence is all around you.

Bitcoin is composed of two parts: the token and the protocol. The protocol is
interesting and useful. It will be most probably integrated into existing
currency systems. We are already seeing this type of experimentation with the
Canadian MintChip.

The token system on the other hand will be remembered as an interesting
digital phenomena the same way we now look back at beanie babies and
tulipmania.

~~~
spenvo
"... it is impossible for bitcoin to be a currency."

It is already functioning as one -- just not a very effective or useful one.
So, please be more articulate if you actually want to have a debate.

But thanks for diverting the the discussion by maligning my character.

Looking through your comment history, it's pretty clear that you have a strong
aversion to Bitcoin. As someone so blindly opposed to it -- you probably have
an ulterior motive too. At least I was forthcoming about mine -> I'm a Bitcoin
fanboy and am building a business around it -- which is more than most
speculators can claim.

So, what's yours? Because otherwise, you're kind of in need of digging
yourself out of troll status. :)

~~~
lingben
It is functioning as digital barter - that you fail to recognize this and
mistake it for a currency is why I suggested you take some basic economic
courses.

How did I malign your character? I simply stated that since you are building a
business based on bitcoin you may not be as objective as someone who has no
vested interest one way or the other.

I don't own bitcoins or have any vested interest. It is simply an intellectual
curiosity for me. I have no interest in making this personal and I was and am
polite to you.

~~~
spenvo
It seems like we had a misunderstanding around semantics then. My defintion
was: "the fact or quality of being generally accepted or in use." The act of
it being used as a currency.

My distinction between this and a more general "form of barter"/medium-of-
exchange was written as '"first-class citizen" status' currency.

------
trekky1700
I feel a little like its banning in China is inevitable. This is a currency
that allows people to circumvent the PRC's ability to monitor and control
money, in a country where Facebook and Twitter are blocked because the
government can't control them. It seems to me like they're not taking it
seriously as a viable currency, and that's why they're responding in this way.

~~~
aravindet
I agree that it's inevitable that the Chinese government will ban Bitcoin.
However, I think their gradual response is more due to the complex preparation
needed to enforce a ban, than scepticism about its viability as a currency.

The great firewall - the infrastructure as well as the body of regulation on
ISPs and online services - took time to reach its current level of
effectiveness, and it is likely that a ban on bitcoin would also be phased in
similarly. This announcement is certainly just the first step.

The most likely next steps would probably be:

\- Ordering financial institutions not to provide services to Bitcoin-related
companies such as exchanges; this could happen fairly quietly without explicit
announcements. This might already have started.

\- Withholding trade licenses and other regulatory approvals to prevent
Bitcoin-related companies from operating; This can be done without specifying
the actual reasons for denial, which would make it hard to be sure that it's
happening.

This would drive Bitcoin to a small-scale, grey-market activity, with
transactions forced to happen directly between individuals. They might leave
it at that, or explicitly ban bitcoin, using the firewall to block the bitcoin
and getwork protocols as well as and servers used by known web-based clients.

------
tomasien
Always a good idea not to panic at Bitcoin news, unless you have a lot of your
personal equity tied up in it - the revolution has already happened, the
message calling for a feeless (although BTC has lots of fees associated with
it), decentralized, secure, fast way to exchange economic value has been
heard.

Whether it's Bitcoin or something else or a LOT of something else's, it's here
to stay. I'm working on my own take on it, so I have opinions as to what it
should look like, but the great news is so are lots of other people AND
Bitcoin is still growing. Payments are about to explode - it's gonna be fun
you guys.

~~~
pault
I work in a different country than all of my friends and business partners,
and we've all started using bitcoin for everything in the last few months. The
first time you set up a multi-signature escrow with no fees, no middleman, and
no 3-5 business day wait, it's mind blowing! I believe that everyone will
eventually have this "ah hah" moment, even if the currency units themselves
are horribly unpredictable.

~~~
tomasien
The good news is, crypto isn't the only thing that can do that - banks already
do it all the time! That's what I'm saying - this has shown a demand for what
you just talked about, not Bitcoin in general (which, of course, has it's own
demand). We're going to get more and more options that fit those
qualifications, and a couple will become dominant. I would personally be a
little surprised if Crypto is one of them, but not floored - it's totally in
the running if not in the lead.

~~~
pault
I think we're in the same camp, but I disagree that existing organizational
structures will be able to compete with a decentralized, consensus-based
network. I know the analogy is wearing thin, but I think of working within the
current banking system as a bit like trying to lease time on a university
mainframe circa 1980–difficult to access, and totally out of reach for anyone
that isn't already on the periphery. You could send email and post to usenet,
but you couldn't build an Amazon, or an Airbnb.

Of course banks can zip arbitrary amounts of cash all over the world, but I'm
not a bank! The public internet created an economy where a clever and
dedicated person can teach themselves all the skills necessary to pull down an
income that was previously reserved for highly educated professionals. I
believe cryptocurrency will have the same democratizing effect on finance, and
open up opportunities for autodidacts that were previously only available to
ivy-league MBAs. Most people will consider me an idealist (or a lunatic, if
other commenters are to be believed), but I believe that we are on the verge
of an unprecedented explosion of commercial innovation. Consider how long it
took for the internet to filter from early adopters to the mainstream, and
compare that to the growth of the bitcoin network. Last time it was decades,
this time it was years, with exponential growth in just the last few months. I
do have some bitcoins, and I wouldn't complain if they made me rich, but the
exchange value of one particular unit of measure isn't what I'm excited about.
There is just no way that top-down, private organizations can out-innovate the
general public given access to a platform with the same capabilities and
trivial barriers to entry. I'm especially hopeful that the ease of access and
equal treatment of micropayments and massive wealth transfers will bootstrap
parts of the world that are currently completely dark to the global economy. I
hope that the speculative greed that is currently dominating the discussion
around cryptocurrency won't overshadow its long term potential. Exciting times
ahead!

~~~
tomasien
I'm with you - but here's something that you may be overlooking:

1\. New banks and new kinds of banks are forming every day with full rights
and accreditations 2\. You may not be a bank, but banks have APIs and methods
of partnering with them so that you can act like a bank. Sure, you're still to
some extent at their behest, but that can be mitigated all sorts of ways.

So maybe if you think banks as a whole won't be where we house our money in 50
years, then yeah, let's look at ways that cut those ties. I'm not of that
opinion, at all actually, but it is one I can understand. My focus is how to
empower individuals and businesses to have the same money transfer power that
banks have - and I think I'm getting there.

------
minimax
I am surprised at the selloff given that bit coin is completely impervious to
government control. That is the whole point of bit coin. We buy bit coins
because we all read about what happened in Cyprus and we don't want to worry
about capital controls ourselves. We bit coin buyers are innovating beyond
government sponsored/manipulated money (and hopefully getting filthy rich in
the process).

~~~
XorNot
The lesson of Cyprus is that allowing your government to create a financial
sector which is worth more then your entire country, and _can 't_ default on
that debt for fear of Russians murdering a lot of people is a _bad_ idea.

It sure wasn't that Bitcoin somehow escapes you from the problem, since very
few people are likely to have wanted to buy any Cyprian currency with Bitcoin
- the bump is more a product of Bitcoin being an incredibly small economy.

------
wuliwong
I understand how news like this will have short term price effects but isn't
one of the fundamental reasons for betting on bitcoins that governments can't
(not won't) regulate them?

P.S. When are spellcheckers going to start recognizing bitcoins?

------
raws
This is going to hurt it nonetheless...

