Topic: The China Effect - page 4. (Read 4117 times)

1. China is not intentionally driving the price down. The Chinese government is enforcing and adding more rules on Chinese exchanges. They've already held multiple closed-source lettings with heads of bitstamp, btc-e and huobi.

2. There has been no affect on miners, who are the ones doing most of the bitcoin related activities in China.

3. People in China are not necessarily dumping or pumping. It's fear that has drive the price down

Oh yeah, we would. I watched it happen with a pool that's no longer around called Deepbit. In fact, I was mining for Deepbit when they neared 50% and watched as people (myself included) moved to Slushes pool, eligius and others to even out mining power. That's the way it's supposed to work.

There are several attack vectors that become possible when one group has majority control over Bitcoin mining. Satoshi believed anyone able to gain 51% of the network's computing power would make more money using it to mine legitimately than blocking transactions or double spending so such an attack is unlikely. I believe he couldn't have foreseen the current situation or all possible reasons for an attack.

National governments and competing payment processors are likely to care more about protecting themselves than the amount of money they could make mining. What if the Chinese government confiscated the mining pools? Is the Chinese national government the one you would choose to trust if you had to trust a government?

If we had the power to do so, would we really though at this point in time? I only say that miners could easily point to different pools if need be, as in if these big pools were to collude in some way and it were very obvious to the community what was going on and bitcoin was in grave danger. In that scenario, then I think even miners in China would point to different pools as it's not good for anyone in bitcoin for bitcoin to be destroyed, including all of those big scary Chinese miners, no? Hell, even for pool operators at that point.

That's right but I think that's why most people believe the Chinese are controlling mining. Westerners believe in the decentralization of Bitcoin. If we had the power to do it we would, as you say, point our machines to non Chinese pools. So reasonable deduction would lead us to believe most of the individuals mining for the Chinese pools must live in China and trust the Chinese pools.

True indeed, but is it not fair to then say that if you have the ability to mine at any pool, then the miners really are the ones in control as they could just as easily point themselves to different pools than those?

That is true. You can mine at a pool located anywhere but the pool operator controls the rules you mine under. If you mine at AntPool, F2Pool, BTCChina, BW Mining, and Huobi then you agree to mine 8 mb blocks. Even if you prefer to mine 20 mb blocks you aren't in control of anything, the pool operator is.

Is there any data anywhere that breaks down in which country miners are located? Remember, just because Chinese pools represent most of the hashing power in the world, doesn't mean they're all Chinese miners. I live in the USA and I can easily contribute to that number by pointing to a Chinese pool.

The question is not wether China's government banning bitcoin is FUD or isn't but: what would happen if China went for a full blown ban. Let's just imagine that happens... what would happen to the price? My immediate intuition tells me it would insta dump. So how do we protect from that potential situation? I think it may eventually happen. Sure, China can put KYC laws on exchanges, but what will happen once we have decentralized exchanges that work thanks to the lightning network? most people will use those to avoid paying any taxes, or maybe not since I cant help of ways to move relevant amount of moneys off the banking system without gov noticing.... thought call.

China makes up 90% of the Bitcoin trading. Doesn't mean they own 90% of the Bitcoin.

Bitcoin is ramped on CNY exchanges, with volume that is likely 95% fake, if not more.

Large quantities are then dumped on USD exchanges, which is what the Chinese Bitcoin Cowboys are really interested in...i.e. wealth out of the country, wash rinse repeat.

....except Western investment interest in Bitcoin is getting increasingly thin (just look at the cross exchange volumes), which means the Chinese Bitcoin Cowboys can offload increasingly less Bitcoin into USD with each manufactured pump n dump, but then there is only half the volume of Bitcoin being created now as there was before July 2016.

There is nothing that can be done about it, unless somewhere in the world, can offer miners even cheaper energy than is offered to miners in China. If that were the case then I suppose if a Western based cabal had the motivation to do so, then they could open up shop in this ultra cheap energy economy, and do exactly what the Chinese done. Namely, intentionally crash Bitcoin and keep it suppressed for long enough, to force miners with too expensive energy bills, to shut up shop, and then when all those guys are out the game, allow/force the market to rise again.

But even in the unlikely event that some western venture capitalist cabal had the means and the motivation to give the Chinese a taste of their own medicine, Bitcoin would still have the problem of being controlled by a very small interest group.

There isn't anything we can do. Bitcoin mining is concentrated in China because the miners have deals to get free electricity from the chinese govt. There is no way that can be duplicated in the rest of the world.

The chinese exchanges are also odd, they don't apply trading fees, and there is a suspicion that their model isn't really about bitcoin (though they want people to deposit both bitcoin and fiat to their exchanges), but using the money that has been deposited to made shadow loans in the shadow banking system. When stuff is free, you are the product.  If you think about a normal bank, it takes in desposits from savers and then makes loans. Their chinese exchange model seems to be, get people to desposit both fiat and bitcoin, and keep their money on the exchange via no-fee trading, and meanwhile that money is being used as a base to lend out to the real economy via shadow banking at high interest rates.

What will happen in the end is that an alt with a different model (one that doesn't need so much electricity and equipment to mine) and one that is better distributed geographically, will come forward and take bitcoin's crown. The western exchanges are already thinking on these lines, that is why GDAX, Kraken, and so on offer alt trading. They have basically given up on bitcoin and are conscious that an alt might take it's place and they are getting ready by having alts on their exchanges, so it works smoothly with what they've already set-up with links to bank accounts, payment processors and so on.

75-80% of worlds bitcoin is mined in China!  it would be naive saying they can not control the price. Miners are well orgenized  and have meetings. What do you think they talk about in this meetins , about Justin Beevers  latest hit? no , they talk about how to make best profit.To make best profit they need to control the price and so the market . they dump some of the coins they mined to start panic and then buy them back lower to bring up the price high then selling their bought coins + the mined coins.

This is one of the biggest flaws with bitcoin , POW besides the fact that it can handle 2-3 transactions per second. I love bticoin but it has not the future many think it will have. It did open doors and did open our eyes, it will be replaced as horses were replaced by cars



 

We already know that the china thing was just a rumor and was nothing to worry about, but even then it caused panic sell. "Sell the rumor..." it seems still applies, but the real question is: Would it have corrrected anything without the china government crap? Who knows, it may or may have.

The conspiracy theorist in my thinks that this was planned by the chinese government, they knew they would crash it, so they shorted positions then they made the shitty announcement of literally nothing happening other than warning about how unstable bitcoin price can be.

http://data.bitcoinity.org/markets/volume/30d?c=e&t=a

https://www.coingecko.com/en/coins/bitcoin/trading_exchanges

http://www.bitcoinwatch.com

China is behind almost every pumps and dumps, we have heard about china banning bitcoin several times which have quickly created panic in bitcoin trading in past also. And now same rumor along with tight regulation on bitcoin trading platform creating another panic.

Right now all traders are looking towards chinese news to trade accordingly.

actually they have lots to do with bitcoin price but not the way that people like OP are thinking or pretending.
Chinese like many other people in many other countries have been investing in bitcoin a great deal of money because they unlike many ignorant people have realized that bitcoin is potentially great for many things first of which is profit as an investment.
and in any kind of investment let it be bitcoin, gold or stocks of a company when prices go high this fast they are bound to come down to the normal levels.

I think China has nothing with changing the price for bitcoin.

I had this similar question on my mind when I had read Chinese news and knew the prices would tumble down and so did it. We are really helpless of you see as there's no way to fight it. They have cheapest electricity and have a major share of the Bitcoin in their hand. We all are just playing mere spectators and will have to watch as to how the Chinese government will further affect the Bitcoin prices.

I have also started thinking like this recently, price is dumping really hard just after Chinese yuan become stronger against USD which nobody have ever predicted before. There is only small rise in yuan value but that created the current chaos. However i am quite confident that this dumps are only temporary one and we may find $900 as new floor after this drama end.  

That stat is misleading as they include Chinese exchanges with no trading fees which massively inflates trading volume.