
A China Triangle: Bitcoin, Baidu, And Beijing - angelohuang
http://www.forbes.com/sites/gordonchang/2013/11/24/a-china-triangle-bitcoin-baidu-and-beijing/
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jackgavigan
Even the most oppressive governments can't monitor or trace payments made with
physical cash. But tracing Bitcoins is easy, thanks to the blockchain.

I wouldn't be surprised if there is a sudden crackdown, in which BTC China's
records are seized and used to identify individuals who are using Bitcoin to
shift money overseas. In fact, who's to say it's not happening already?

~~~
pjc50
_can 't monitor or trace payments made with physical cash_

For large values of cash, yes they can; cash is bulky and has to be smuggled
if you want to do it secretly, which is expensive.

Hence all the US asset forfeiture laws, and various countries rules on
bringing currency in or out.

~~~
jackgavigan
> For large values of cash, yes they can...

No they can't, unless they have taken special measures (e.g. surveillance[1])
which are invariably resource-intensive. If a $100 turns up in a Miami drug
dealer's wallet, there's no way of tracing it from the ATM is was issued from
in NYC a month earlier. Cash does not leave a trail of breadcrumbs leading
back to every wallet it passed through.

Bitcoins, on the other hand, are traceable by default. Users have to make an
effort to cover their tracks using a laundering service (vulnerable to
compromise) or something like CoinJoin (potentially vulnerable to network
analysis).

[1]: [http://www.kickstarter.com/projects/1460639069/follow-the-
mo...](http://www.kickstarter.com/projects/1460639069/follow-the-money-0)

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gbog
Interesting article overall, but:

"it is inconceivable that Baidu would permit the acceptance of Bitcoins
without first clearing the matter with Beijing authorities"

It do not seem to be what suggested Kaiser Kuo
[http://qr.ae/GsjwK](http://qr.ae/GsjwK) and it should be noted that Baidu is
a bunch of small sized teams competing each other fiercly. Accepting Bitcoin
could very well be decided locally, and the risk would be localized.

Even if the higher instances in Baidu or higher have heard of it, they
probably won't have endorsed it officially and will be able to say they didn't
know.

I would be extremely surprised if the Chinese government would be very open-
minded with bitcoins and would suspect an hidden agenda behind. Why? Because
from all what we know of Bitcoin and its use, it allows bypassing a lot of
controls, and even threaten directly the life and blood of any government on
Earth: the taxes.

~~~
adventured
Bitcoin doesn't threaten taxes at all. It would be like suggesting that taxes
didn't work in the age of cash transactions (eg for the first 200 years of US
history).

Primarily it threatens fiat-based Keynesian economics by making it impossible
to inflate away savings / wealth / standard of living as a means of government
deficit financing. To the extent a government is dependent on devaluing their
currency to remain afloat or otherwise pretend to be better off than they are
(eg paying for entitlements with inflation), is the extent to which bitcoin
would be a threat with wide-scale adoption.

~~~
iSnow
As long as the Gov't has authority what asset it accepts for tax payments,
legal tender as issued by the central bank is in no danger. Since in
industrialized nations taxes make up a large part of the GNI, I cannot see XBT
dethroning national currencies.

The usual inflation of traditional currencies would predictably lead to a
deflationary spiral in XBT until it either hits a ceiling or goes into
extremely fast boom and bust cycles that kill trust. Everyone who tried to
evade the debasement of his savings by 2% inflation only to witness them
melting 50% in the next XBT bubble pop will be hesitant to go there again -
especially if the market get so narrow that selling is a real problem.

------
daniel-cussen
My take on China's embrace of Bitcoin is not that it will help it with police-
statesmanship, but simply that they really don't like the USG dollar, and
would love if the international monetary system made a little more sense.
Right now, Japan, Germany, and China (mostly) buy enormous amounts of US
treasuries at tiny/negative interest, only to see them defaulted on little by
little at the pace of inflation (which is of course paced by the USG). China
doesn't really believe in fiat currency, definitely not at the state level.
They should know, they invented paper currency back in the day. Instead, they
buy precious metals (and other metals, they stockpiled copper during the gold
boom a few years back), and I think they see something very similar when they
look at Bitcoin. They see gold 2.0, at any rate, a contender to become the
world's reserve currency, only with better liquidity than gold, less inflation
(you can mind more gold into existence, but Bitcoin is capped at 21 million),
and harder to forge.

