I just had a bit of a "holy shit" moment.
Bitcoin will break China's control over CNY outflows.
It is very hard to get CNY out of China - the cap is 50k CNY per Chinese citizen per year. This is a big reason why there is a huge arb between USD and CNY Bitcoin exchanges: Westerners can't just wire yuan out of the country. However, as this bubble settles down and the arbitrage market does its thing, more and more individuals in China will cash in on their 50k CNY limit, since it is an easy profit opportunity. They will wire their money to Western exchanges, buy bitcoins there, and sell them domestically. The Chinese markets will drift closer in price to the Western markets.
This means you will be able to move money in and out of China freely, by buying bitcoins on one end and selling them on the other. Chinese citizens will act in rational self-interest to effectively "sell" their 50k CNY export limits.
If wealthy Chinese people would like to buy lots of expensive things directly from the West... now they can, by purchasing the import limits of others by proxy.
Of course, China will not like this.
Bitcoin will break China's control over CNY outflows.
It is very hard to get CNY out of China - the cap is 50k CNY per Chinese citizen per year. This is a big reason why there is a huge arb between USD and CNY Bitcoin exchanges: Westerners can't just wire yuan out of the country. However, as this bubble settles down and the arbitrage market does its thing, more and more individuals in China will cash in on their 50k CNY limit, since it is an easy profit opportunity. They will wire their money to Western exchanges, buy bitcoins there, and sell them domestically. The Chinese markets will drift closer in price to the Western markets.
This means you will be able to move money in and out of China freely, by buying bitcoins on one end and selling them on the other. Chinese citizens will act in rational self-interest to effectively "sell" their 50k CNY export limits.
If wealthy Chinese people would like to buy lots of expensive things directly from the West... now they can, by purchasing the import limits of others by proxy.
Of course, China will not like this.
You can't stop people selling bitcoins, how can you? They will just sell it under different names in their online shops if you try to crack down.
I was also worried when people were selling bitcoins and wanted to convince them so they stop. But now I'm not worried any more. They want to sell? Let them. The true value of bitcoin is rising anyway because of ever bigger infrastructure that is created every day. Which means, the price will be higher no matter what and should not come from holding coins in pockets. Just be patient and don't sell your coins if you need some profit that way but still I much more prefer to simply create my own site that accepts bitcoin instead of speculation or holding. It benefit's everyone that way.
I meant you can't stop Chinese online sellers doing Bitcoin sales, even if the government cracks down on exchanges. It may even be the case that government is aware of the futility of such crack down and decides to leave us alone. Anyway, if Bitcoin gets really big, what's stopping them from building several huge farms and mine the hell out of it? Who wants to compete with China in Bitcoin mining cost?
If it comes to :
Electricity cost > Russia
Workforce > Bangladesh or India
But when you have to take in both factors...
Also there is IC fabrication cost, land, cooling, construction, etc...
