Topic: 2013-11-28 Tech In Asia: What’s really going on in the Chinese Bitcoin community (Read 1768 times)

Lo and behold, they just did exactly the opposite:

  http://www.reuters.com/article/2013/12/05/china-bitcoin-idUSL4N0JK1KZ20131205

Boom.

Also, there is Macau - it is a well known fact that Chinese people take their Yuan there, turn them into chips, which are honored at casino's in the USA. If the PRC wanted to do something, they'd close that loophole as well. They have to know about it, not like that huge gambling operation is flying below the radar.

I think what the Chinese are figuring out is that Bitcoin is the thin edge of an economic "wedge" that they can use to overcome reliance on the US Dollar. Once that happens, they can burn all their acquired debt without much consequence, as the increased Yuan reinvestment in the country will cause its value to increase.

This kills exports, but once you've burned that bridge, you don't care much about selling to your former world-reserve-currency "partner". What becomes important then is shifting your economy to a consumer-based versus outsourced manufacturer one.

Bitcoin has the potential to solve the currency dilemma CCP is facing: on one hand, it doesn't like the hegemony of USD, otoh, it can't and is not willing to do anything to change it.  If any centralized currency other than yuan replaces dollar, CCP maybe subjected to undue influence to another third party, or if yuan replaces dollar it maybe forced to change the way she does things(like free conversion of yuan and market-determined exchange rate)and again subject itself to undue influence of third parties, like foreign hot money and currency manipulators. With Bitcoin CCP not only can maintain the status quo of yuan and the neutrality of their foreign reserves, but also sufficient influence on the Bitcoin market-China is cheap in electricity, man power and chip fabrication, combined with CCP's clout to amass resources, it can mine a significant fraction of all bitcoins in existence if it chooses to do so.

Even if we assume the worst is to happen and CCP indeed wants to crackdown on bitcoin trading, its effort may very likely be futile. Anyone familar with China knows that how much Chinese economy relies on Taobao(a C2C online market), as long as people can trade bitcoins under the pretense of selling some other online goods(I want to buy this lousy postcard for 5000 yuans because I like it, any problem?), thye can't be stopped. In fact, government has tried to crackdown on VPN(for GFW crossing purposes) selling for years, but all it has achieved is to add a little inconvenience to us.

No.

Chinese Communist Party would not be encouraging the citizenry to speculate on Bitcoin if what you say is correct. What is the purpose of green-lighting it in the state media and permitting the protocol with their ISP's if they're waiting for some unknown signal to suddenly change their minds?!?!?! Chinese banks and Chinese crypto-exchanges are easily the most frictionless in the world, the fiat deposits and withdrawals clear in a matter of hours. The Chinese state are encouraging all this very strongly when they could be cracking down right now very effectively.
 
You're talking about currency non-convertibility and capital controls interchangeably, and they are not at all the same thing. The CCCP policy is to keep renmimbi in the country, not capital. The Chinese state appears quite happy to allow Chinese people to move capital out of China to invest overseas, in a mirror of how the US government is simultaneously exporting it's newly created capital all over the world too. They're both basically exporting inflation, with the US using currency to do so. But China is keeping it's currency under tight state control by not allowing any large quantity of it to leave the country, and so they are using any proxy that can to do the inflation export job instead.

^This

China has a non-convertible currency.  This is a fact known to anybody who cares to look it up and the PRC government admits it.  Figuring out why people living in such a country would want bitcoin does not take any mind-reading or grassroots voodoo.

The only real mystery is at what time and in what form the government cracks down on it.  Allowing bitcoin purchases amounts to effective capital account convertibility for RMB, so either they change a 20+-year policy (which they've been saying they'll change "in just a few years" since 1995 or so but never seem to get around to it) or they crack down on bitcoin.  One or the other.

The PRC government is not going to [willingly] let Satoshi Nakamoto dictate their monetary policy.

good article

Good stuff! Interesting to sell the correlation of US market and China market-Supply and Demand!

I don´t think the majority of chinese money is coming from "poorly performing equity holdings"... rather money laundering and circumventing capital exchange limits...

Nice read , glad to hear nobody there believes that myth :
There is no clear answer, but there is a lot of anecdotal evidence. No one we spoke to believed the myth of the “Chinese Auntie” (zhongguo dama, or effectively, crazed retail investor).
I've been accused of misogyny by not believing in that crap.

Also this:
"For the smaller players, it is simply sufficient to know that the Chinese government has not hinted at any plans to crack down on Bitcoin in the foreseeable future."

xiaolai sounds cool.. seems like he's into bitcoin technology not just for making money, but he's put his time and effort into spreading its influence. the other group of guys are just interested in making money and living opulently.

Thanks for that. It deserves a wide audience. I like this quip: "there is no Bitcoin mania, there is only fiat panic".

Very interesting to read, thanks for sharing.

The blog post made by a commentator on this news piece is really cool:
http://www.offgridminds.com/misinformation-blog/2013/11/28/questioning-bitcoin-at-1000.html

Nice link - thank you for bringing it to our attention.

It also confirms a few things that I've suspected, namely:

1) Bitcoin on mainstream news channels in China shows government tolerance of it (if not actual endorsement)

2) There is plenty more to go, as any edicts from the 3rd Plenum meeting did not contain any anti-Bitcoin language. In fact, I'm still interested in the implications of "Private investors may now open their own banks" - a statement from the meeting.

3) Flight to bit-quality, from equities and the overextended real estate bubble.

The implications are vast, and I find that very interesting - seeing how the China Central Bank is going to stop supplementing their dollar reserves come the first quarter of 2014.

Thanks for linking it.

Not something we usually get to read about.

Very informative article with proper on-the-ground reporting instead of the usual guessing/extrapolation/hearsay.

http://www.techinasia.com/whats-chinese-bitcoin-community/8