
Bitcoin slides as China's central bank launches checks on exchanges - stevewilhelm
http://www.reuters.com/article/us-china-bitcoin-idUSKBN14V15Q
======
empath75
As someone who spent a year or so trading bitcoin for fun.

1) It's a mostly unregulated market full of scammers and pump and dump schemes
artificially manipulating the price.

2) All the news and rumors about bitcoin and any other crypto currency should
be assumed to a lie propagated by someone to move the price in one direction
or another.

3) Nobody on the internet who claims to know why the price of bitcoin goes up
or down on a given day has any fucking idea what they're talking about, and if
they didn't they wouldn't be posting about it online.

4) As long as bitcoin is useful for buying drugs or another criminal activity,
it's going to be worth _something_.

5) When you suddenly start paying attention to bitcoin because the price has
gone up a bunch recently, don't buy it, because it's about to crash.

~~~
qworty
Number 3 and number 5 are a contradiction, won't you say?

~~~
empath75
5 was me being somewhat sarcastic. I see so many people on bitcoin forums
saying something like "Wow, the price has really gone up, it's going to the
moon now, I just spent my retirement betting everything on bitcoin with 25x
leverage on some shady chinese exchange.

Then a week later they're on suicide watch because the price went down 5-10%
and they lost everything.

On some level, it's just common sense. A bitcoin is a bitcoin. If bitcoins
didn't suddenly become more valuable for some obvious reason, then if the
price has doubled in a few weeks, then that makes it a worse time to buy, not
a better one.

I will never understand why people suddenly want to buy something _after_ the
price has gone up a bunch, _because_ the price has gone up. You want to buy it
_before_. Obviously if the price went up because the reward halved or, i
dunno, citibank started taking bitcoin deposits, that's a different story, but
just jumping in because of FOMO is stupid. (I saw the same thing with Nvidia,
and warned people out of buying it and sold most of mine to lock in profits
after the hype train started getting out of control in the past few weeks.)

~~~
dalore
So the price has just dropped, good time to buy it then?

~~~
zeroer
Well it's a better time.

------
iopq
[https://imgur.com/a/KDwtE](https://imgur.com/a/KDwtE)

As relevant as ever

~~~
erikpukinskis
I wouldn't be surprised. Won't be an existential issue for Bitcoin though
(beyond the temporary 2-5x price drop). Bitcoin doesn't need national approval
to succeed. It will thrive in some jurisdictions and not in others.

Nation states have the most to lose, since they draw so much of their power
from the ability to manipulate currency, so we should expect to see a lot of
attacks on Bitcoin by them.

~~~
closeparen
Nations can prevent their banking systems from interacting with exchanges. It
should be easy enough to transfer value to citizens of restrictive countries
regardless of the government's position; the trouble is the citizens' ability
to transfer value _out_.

~~~
erikpukinskis
Banks are just one of many ways to get credit denominated in Bitcoin.

The point of Bitcoin is that your cousin Lenny can act as your bank.

~~~
closeparen
Your cousin Lenny had to get _his_ BTC somewhere, with either an exchange or a
mining rig in the path. States can make both of those paths very difficult -
paying the exchange could require smuggling cash out of the country, and
anomalous electric usages are already used to identify marijuana grow
operations.

------
matt_wulfeck
How about a check on foreign realestate investment? I have a fantasy where
China starts looking into homes its nationals own throughout the Bay Area in
search of lost revenue, wherein the prices collapse because of a selling
frenzy.

The reality is that many of the foreign-owned homes here are owned by shadow
offshores which are very hard to track.

~~~
ninjaroar
Do you really think China has a bigger impact on bay area housing than
overpaid tech workers funded by venture capital?

~~~
kobeya
As someone who recently bought a house, yes. We lost two houses to people who
were bidding cash, even though they bid at a slightly lower price (cash closes
fast). One was Chinese and the other was Russian. It makes the local tech
workers paying with loans try to top the foreign bidders. But by the next sale
the foreign buyers are bidding even more because they are sitting on piles of
cash and can afford to do so. It's a real effect that every single person in
the real estate industry we interacted with commented on.

Also, you're giving yourself away as an outsider because VC-backed firms
significantly underpay compared with the profitable tech giants.

------
saycheese
It's unclear what will happen, though it's possible China's moves long-term
will increase Bitcoin's value because they'll use it as a financial tool both
within China and outside of China.

Given that China warned the miners of their intent in advance of the public
disclosure, there's reason to speculate they did this to partner with them to
control Bitcoin.

~~~
runeks
> Given that China warned the miners of their intent in advance of the public
> disclosure, there's reason to speculate they did this to partner with them
> to control Bitcoin.

How so? The worst they can do is mine empty blocks. This doesn't constitute
controlling Bitcoin, but rather executing a continuous denial-of-service
attack against it.

~~~
politician
No, the worst case is that they require their population to go through
approved exchanges and to only use government issued Bitcoin addresses
assigned to each individual.

~~~
runeks
Oh, right, I see. Control Bitcoin as in control the use of it within China.

I'm sure they can prevent the open use of Bitcoin in China, if that's what
they want. But it seems to me that if people really are using it to avoid
capital controls and/or Yuan depreciation, preventing consumer-to-merchant
transactions isn't going to change that.

~~~
nl
This is about controlling consumer to exchange transactions in China.

------
ryanlol
BTC China statement:

[https://twitter.com/YourBTCC/status/819159971564662784](https://twitter.com/YourBTCC/status/819159971564662784)

------
Animats
From the article: _" Trading between the yuan and bitcoin accounted for around
98 percent of the total market in the past six months."_ Yes, it's people
getting yuan out of China.

The big question for the last few years has been whether China would loosen
capital controls, or tighten them. The decision seems to have been "tighten".
Bitcoin is now a big enough leak that the People's Bank of China is starting
to do something about it.

China deliberately allows some leaks. You can take about $50,000 to Hong Kong
in cash per person once a month. Sending all your relatives to Hong Kong every
month, loaded up with cash to exchange, has been popular for years. But that
only works if you have relatives near the border. Bitcoin was tolerated as a
leak, as long as it didn't get too big. That may be changing.

~~~
runeks
> From the article: "Trading between the yuan and bitcoin accounted for around
> 98 percent of the total market in the past six months." Yes, it's people
> getting yuan out of China.

I don't at all agree that this is evident.

BTC China has zero trading fees. All speculators go there to cheaply trade
bitcoins. Volume is no indicator of anything, except the speed of their order
matching engine. Bitcoins bidding on Yuan, and vice versa, is the important
metric, and judging by it, the Chinese market is insignificant compared to the
USD market (bitcoincharts.com/markets has order book depth by exchange).

~~~
drcode
Well, there is SOME reason why Bitcoin spiked recently- It seems almost like
it's due to an organic reason, since the speculation environment hasn't
changed much in the last year to account for a large change- So far, the best
theory to account for the spike I've heard is Chinese capital outflow. (Though
it's always possible it's entirely due to "animal spirits of the market" and
has no fundamental reason)

~~~
mr_spothawk
remember when Jamie Diamond said "all the action is in gold and bitcoin"?

that's when this recent spike started.

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jcoffland
That no articles reached the front page as the price was rising says a lot
about HN's general opinion of Bitcoin.

~~~
olalonde
It was on HN's front page 7 days ago:
[https://news.ycombinator.com/item?id=13320198](https://news.ycombinator.com/item?id=13320198).
There does seem to be a lot of schadenfreude when it comes to Bitcoin though.

~~~
jcoffland
Notice that article got 58 points whereas this one is currently at 163.

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dolzenko
So why Bitcoin is so big in China?

~~~
mjfl
People are trying to pull their money out of China, and in the process need to
exchange Yuan for foreign currencies. China does not like this, because it
causes inflation among other things, so it puts restrictions on exchanging
Yuan.

[https://www.bloomberg.com/news/articles/2016-11-30/china-
sai...](https://www.bloomberg.com/news/articles/2016-11-30/china-said-to-add-
curbs-on-yuan-outflows-outbound-investments)

Bitcoin is a way around this. If you are Chinese and can afford big clusters
of bitcoin miners, you can mine bitcoin and exchange it for people's Yuan at a
higher and higher price, driven by demand to pull money out of china.

~~~
mrb
_" People are trying to pull their money out of China"_

Meh. This is the classic story that mainstream articles about Bitcoin almost
always repeat over and over. However on multiple occasions CEOs of Chinese
Bitcoin exchanges have said they don't believe it to be true, based on how
their users use their exchanges. In reality the Chinese just appear to like to
invest/gamble/make quick returns more than Western markets. That and a
combination of other factors (somewhat more lax domestic financial regulations
+ large market of 1.4 billion people + due to competitive reasons Chinese
exchanges offer 0% trading fees + ...) leads to a bigger and more active
Bitcoin trading environment in China.

~~~
notahacker
Are the mainstream articles' claims less likely to be true than the statements
of CEOs of Chinese Bitcoin exchanges that have pretty strong incentives to
talk up the portion of their business that their regulators are less likely to
be concerned about?

~~~
mrb
Your point is legitimate. However, if the Chinese trading volume (buys) was
primarily caused by money flowing out of the country, we would see a
correspondingly high trading volume overseas (sells). But we don't.

------
asc123
hodl

------
LAMike
Bitcoin is dying again...

~~~
xj9
seems like this happens a lot.

------
adtac
So glad I cashed out the little BTC I had at $1,060/BTC a few days ago.

~~~
zepolen
Why are you glad about that? Also when did you buy them?

~~~
adtac
Quite a while ago (maybe 4-5 years ago). I actually didn't buy them, I mined
them. In fact I had totally forgotten about it until I saw a news article
stating BTC had shot up to $1000+.

>Why are you glad about that?

Well, I don't expect it to raise back to USD$1000+ any time soon (it's ~$740
now).

~~~
throwaway_btc1
I have some mined coins from 5-ish years ago, but it was on such an old
bitcoin client I haven't been able to show proof of work in order to transfer
them out of that wallet, and it seems to be pretty difficult to recover an old
wallet, especially when I'm paranoid that the data will be snatched as soon as
I reconnect that old computer to the internet, since the bitcoin client was so
old it didn't have proper protections in place.

I really should have had it all figured out so i could take advantage of this
run, but I didn't. Now I'm kicking myself. I wasn't ready the last time it
shot up over $1k/coin either.

~~~
c0nducktr
You don't have to reconnect the computer to the internet to get access to the
bitcoin in that wallet actually. You should be able to get the private key
from from the wallet.dat file and then just import it to a new client.

[http://bitcoin.stackexchange.com/questions/4203/how-can-i-
ex...](http://bitcoin.stackexchange.com/questions/4203/how-can-i-export-the-
private-key-for-an-address-from-the-satoshi-client)

If you end up getting rich, feel free to transfer some btc to
1P471RQS4Ga2xgakQWgbDL8WLajwPEdfMH as a thank you :)

~~~
throwaway_btc1
Okay cool. I did try doing something similar before, by taking what appeared
to be the private key out of the wallet.dat file and importing it elsewhere,
and it showed my balance, but it wouldn't let me transfer the coins without
'proof of work'. I read online and I was lead to believe that I needed
something more than just the private key for original mined coins in order to
transfer them.

And I won't be rich, unfortunately. I only left it on for only a week and
mined a single block, back when you could actually do so from your home
computer. If only I had left it on for a couple of months back then I would be
rich, though. This will only help me dig out of debt and maybe make a
downpayment on a house.

~~~
c0nducktr
As far as I know the private key should be enough, I wonder if it was an issue
with the client you were trying to import them to.

Anyway, one block is still pretty good as far as getting free money goes! Best
of luck recovering them.

~~~
throwaway_btc1
I'm certainly not complaining, assuming I eventually can get these coins sold,
and preferably not in the middle of a downturn. Not really looking forward to
taxes taking a chunk out of it, but whatever. I'm just glad I don't have to
stare at a ~$220/coin for months on end and saying to myself "If only I had
sold when it was $1k a coin..." like I did two years ago.

~~~
pokemon-trainer
Use the dumpprivkey command on the old wallet. Install a new wallet on your
new pc. Use the command importprivkey. Then you can transfer the coins to an
exchange, assuming the website you pasted your privkey into before didn't
steal them.

------
throw2016
Why should any private entity or group or technologists seek to control money?
Money is the most important instrument in a society and must be under societal
control operating within the proper framework of systems, accountability and
rule of law.

Given that bitcoin origins and management is completely nebulous and its
proponents deceptively promoted and continue to promote it as some freedom
libertarian thing when its closely controlled and in the end simply a way for
early adopters to cash out.

Early and greed fuelled adopters incessantly moan about a flawed banking and
monetary system. Even if we accept their criticisms at face value how is it
reasonable to then turn around and promote a 'solution' that has zero
accountability to anyone and based on a inefficient system that shamelessly
wastes electricity? This seems disingenious and self serving.

