Topic: I expect that self-regulation by Chinese exchanges can't please the central (Read 1886 times)

From the government's point of view, the most efficient way attacking bitcoin is to weaken its confidence and reputation. Those fiat monetary policy makers know how important confidence is -- it means everything -- because they spend their whole life manipulating confidence. 

The problem with Chinese government is, they are fighting an uphill battle --  they are trying to manufacture and spread FUDs in a unfriendly territory for them,  the Internet.  Nowadays people in China trust more in rumors than official statements, those tactics can easily backfire and expose themselves as the real "paper tiger".

As explained by the op, the "we are going to play invisible, please just forget we exist" line of the chinese exchanges won't be able to make the chinese authorities change their policy. They went too far to smash a still small insect (bitcoin) to just forget the all issue and let bitcoin exchanges keep business as usual only with a more discrete stand.

However, the authorities don't seem to have much more means to strangulate the exchanges beside banning them and arresting their owners, something they probably won't do, because that would be a drastic change of policy with uncertain results on the present chinese owners of bitcoins.

I guess we'll see a slow death of the main exchanges. Even if they go off shore, with the limitations to send CNY abroad, they won't be the same again. They already have competition from BTC-e.

Thanks for the reply.

I don't think any of the super-powers are going to try to seize Bitcoin hardware alone. Each has the capacity to produce their own chips. They would likely consult with each other to avoid a new arms race before taking such drastic action.

By "arms race" I mean: one nation-state tries to kill Bitcoin, while the other tries to defend it.

1) I think chips are produced in Taiwan - they are moving to ShenZhen but there is no harm. Get this correct first: Bitcoin is a second consideration of China's government, Chinese people are the top enemy of Chinese government. Producing chips is harmless to our government.

2) If China doesn't produce mining equpiment, the bitcoin produced will not be less.

Even consider 1 + 2, your question is actually valid, because China government can technically use it to atack the network. But attack network only serve to discredit Bitcoin, and that is necessary only in the plan B scenario, plus the detective work that Lord usually averse to do, double unlikely. Our goverment should focus on what they are good at: discredit people and organizations, not descredit a technology.

Regarding plan B:

https://bitcointalksearch.org/topic/m.6715566

I have a question.
 
Since China manufactures just about everything; including chips: how is the world supposed to get mining hardware in the face of a Chinese crack-down? What prevents Chinese authorities from seizing mining inventory and using it to attack the network?

self-regulation equals no regulation

My theory for the Chinese exchanges' plan B: Move offshore. https://bitcointalksearch.org/topic/2014-05-12-scmp-chinese-bitcoin-firms-plan-to-go-offshore-to-sidestep-606747

Haha, I'm laughing because I'm really understanding what you mean.  Thank you sincerely for taking the time to debate with me on this topic, it is appreciated.  By the way, I'm actually rooting for Alibaba, I think it can become a major world player.  In the West we welcome healthy competition, it is the survival of the fittest that wins here, even if from another country.

There was nothing that the Bitcoin Foundation could do to protect anyone from the Mt. Gox fiasco.  Firstly that is not their role as they don't have such power, and secondly the way it played out we call it the "free market" in the West, free and pure from overhanded Government protectionism and regulation.  That may change in the future with more regulated Western exchanges, but many bitcoiners were not surprised at all that Mt. Gox was insolvent and running a Ponzi scheme.  Especially because the owner was an incompetent, lazy half wit with no business skills whatsoever (even his technical skills were severely lacking) that needed to be run out of business in order for bitcoin to thrive long term.  It's time for bitcoin to grow up and put its big boy pants on.

Here's the thing that most U.S. bitcoiners, and maybe those from other countries may not readily admit but it's true: we definitely WANT China to be part of this bitcoin grand experiment.  The truth is we want the whole world involved in bitcoin, no matter the country or culture.  A currency similar to the Euro or the Brixton Pound, but orders of magnitude better.  A currency to break down the barriers and borders that lie between cultures, a private form of money that no one government or centralized entity can ultimately control.  A currency to connect all of us, and foster a sense of world community working together, as opposed to competing with each other.  That is the vision of bitcoin.

Again, we ultimately want China onboard.  We really do. But if the Chinese goverment and PBOC intends to "make bitcoin an enemy", then we would rather China re-evaluate their involvement long term.  Because it is going to take a head on war or some pretty clever thinking (sly fox?) for the Chinese exchanges to ensure their survival in the future.  Bitcoin is going to inevitably expand exponentially across the globe, and the price is going to increase exponentially as well.  With or without China involved.  So the question is, are the Chinese exchanges prepared to ensure their long term survival?  What is their backup plan? (In the U.S. we refer to it as plan B, or even C)  

I feel you did not finish reading that article. But I assume many others don't neither, so here is a teaser of that article:

As a reporter, I enjoying the intellectual achievement of identifying hubris on both sides:) And I enjoy reporting it to both direction:) What you say about sillicon valley's indifference to Alibaba, world's biggest IPO? Not hubris? And put in consideration that Alibaba is a height of hubris themselves - that is, you (sillicon valley) don't shit he (alibaba) who doesn't shit anyone but Chinese government, and you don't shit Chinese government, ain't you (sillicon velley) a height of hubris? Quite so in Chinese eyes. If you talk ebay or amazone as mainstream (while in practise alibaba is bigger than these two competitor combined), they also would reply starting with "Are the Americans for real, or just making this crap up to entertain themselves?" Another example is Tencent. I won't keep listing.

Notice that Bitcoin Foundation did fail in the goal they vowed, the very line about "protect Bitcoin" - they did nothing useful in both Gox fiasco and China clash, but Bit Foundation did nothing useful to both case neither - in fact, Bit Foundation's effort on the Bitcoin 2014 Global Summit is counter-productive for Bitcoin in China, due to the political attention it attracted (they didn't see it coming). PBOC knows Bitcoin 2014 Global Summit is an event 'by the Chinese, for the Chinese, of the Chinese' and they know they are solving internal problems. No one wins the 'protect Bitcoin' competition.

The King of King of hubris is Chinese governmental newspaper "Global Times", but read the Chinese edition please for really good laughters, English edition caters English readership and English hubris and you just feel at home reading it, no entertainment. Too unfortunately Google Transalate doesn't handle Chinese acceptablly, and when human translated it all the funs are gone. I perhaps am one of the few to deliver Chinese in English without 'cater' for readership: I hope that provoking article opens the eyes of my English readers.

Seriously?  Are the Chinese for real, or just making this crap up to entertain themselves?  This is the height of hubris and arrogance.  Show me one prominent bitcoiner in China that is even part of the Bitcoin core development team.  If anything has been a failure so far, it's the Chinese exchanges establishing themselves as the 'cornerstone' of the bitcoin world.  They will probably be completely out of business soon, while the Western exchanges will continue to thrive.  Sorry to rub salt in the wound, but the Chinese need to stop deluding themselves into believing that bitcoin won't survive without their involvement.  We want the Chinese onboard just like we want the rest of the world onboard, but so far I haven't seen proper leadership from there.  All I can say is, prove us in the West wrong.

Bit Foundation this time. If the names are confusing, it was intended so.

"exile" is the world I used in the article, killing Bitcoin businesses is a feasiable way to achieve that goal. Businesses are run by people. Control people = control business.

Brilliant article, as always. But I do not think the Global Bitcoin Summit was organized by the Bitcoin Foundation.

I haven't read his article yet, but my prejudice is that the article is brilliant. He is smart. You are dumb.

Excellent article.

As a fellow East Asian, Zhang's depiction of Ancient Chinese history and its linkage to Chinese government behavior is accurate.

As long as BTC remains an illicit, speculative toy in China without any actual trading for tangible goods, the November 2013 bubble will continue to correct itself until China is no longer a factor.

Houbi CEO considering something akin to this actually.

They are playing a game of "bluff" with an official agency. Now while this may seem unbelievably reckless it is the pavlovian reaction to be expected of any bitcoiner.

What I find more amazing is that I can be entertained watching the same drama unfold over and over again still.

Haha no wonder so many foreign companies get burned doing business in China  what a scary environment to do business in 

Haha to PBOC if they believe they can "kill Bitcoin"

What is the reason that these exchanges don't simply rent a brick and mortar place where people can come in with physical cash? They don't even have to take the cash themselves, just the 1% fee for each transaction that would then be done between buyer and seller.

Bitcoin cafe, localbitcoins style ;-)

Those exchanges are obviously playing fire  Things will happen eventually.

I'm still wondering why trading on chinese exchanges is still business as usual. Has the deadline of the 10th not had any implication?

Excellent article. And the Chinese stories are crucial to understanding the psychology at play.