Hacker News Reader

Comment by pmorici | Hacker News Reader

A little context for this. China cracked down on Bitcoin exchanges earlier this year and stopped all withdrawals of Bitcoin from exchanges. Reports just in the past few days are that they have finally re-enabled Bitcoin withdrawals at the major exchanges in China. Some mining operations are closely linked to exchanges so perhaps these shutdowns are related to the scrutiny of the exchanges.

Also shutting down one miner just makes the remaining miners more profitable in the long term. In the short term though ~1 week it has the effect of reducing the rate at which Bitcoins are generated until the difficulty re-target is reached.

View on HN

Seems to me as though Bitcoin mining is kind of a backdoor way to move Chinese money offshore circumventing capital controls. Pay for your electricity in yuan, then sell your Bitcoin anywhere in the world. In fact I speculate that may be the main reason Bitcoin mining is so popular there; it's essentially subsidized by people wanting to move money offshore. Perhaps this is cracking down on that? There's so little detail in the article it's impossible to tell.

100% correct.

Do you have some knowledge of people doing this?

I suspect the same when I buy goods from China on Ebay: The money is going to an ex-China Paypal account.

I may very well be paying less than cost because $1 outside is China is worth x%+ than inside of China.

Curious what the opportunities to help folks in China do this and profit as a person in the USA?

Buy in bulks with discount. Pay to Swiss accounts. :)

Yes. Not only that, it gets good tax and capital flow treatment in China, because it's considered "exporting".

The big Bitcoin question for the last several years has been "what will the PBOC do"? So far, they've discouraged the use of Bitcoin for transactions within China, and stopped some speculative practices at Bitcoin exchanges, but haven't really cracked down.[1] Back in February, the PBOC announced a "study period" while they decided what to do.

[1] https://www.bloomberg.com/news/articles/2017-02-10/china-bit...

I would be surprised if the Chinese government doesn't ban Bitcoin at some point. They don't allow their people free access to information, why would they allow freedom in monetary matters?

They certainly doesn't seem inhibited in banning things that may pose a threat to themselves. Bitcoin just doesn't pose much of a threat yet, not until it's generally useful as a payment system and for financing -- thus comprising an actual competition to the PBOC and their member banks.

As long as all the entry/exit points are regulated and in line with the government, Bitcoin is perfect for a country obsessed with capital controls.

Far easier to monitor than cash.

> They don't allow their people free access to information, why would they allow freedom in monetary matters?

The US and other major "democracies" out there are already working on restricting access to information. I believe it's called "Fake News" ...

Are you saying you don't believe Hillary drags children under their bed and eats them?

No one is saying that. Its what cost her the election.

Being the personification of a crony career politician cost her the election.

Do you believe that I think she literally eats children; or did you want to just put Hillary down?

I read most of the DNC emails, I researched her as much as a voter should. Clearly couldn't vote for her (voted a write in "no confidence in candidates") But she never ate kids; that was John Podesta.

Fake news is a side effect of the US' freedom. You can publish what you want.

Why ban it when they can nationalize all the miners and have total (>51%) control of Bitcoin?

My Thoughts exactly. If it would repalce cash money, that would be a good motivation on top of that, as they might control the anonymity of transactions. I don't think they'd need >50% total, if only inland transactions are concerned (as would be the case with any other payment system, without further assumptions)

> Seems to me as though Bitcoin mining is kind of a backdoor way to move Chinese money offshore

Which is why China is trying desperately to get control. They limit how much money their citizens can move around, whether it's Yuan, stocks or foreign currency, everything is limited and monitored. Bitcoin is no exception. Except, I think it's more nefarious than that. Bitcoin stands for everything China is against. A (mostly) anonymous currency which is decentralized? It's practically the opposite of China's ideology, a country which has strict controls on just about everything within their borders.

If I was the PRC, I'd move to damage, corrupt or if possible, destroy bitcoin. At the very least, I'd dig my claws in somehow, someway so I had some (even if it's just a little) control. But if I was China, how would I do it? I couldn't just create "The Exchange of the People's Republic of China". I'd have to do it through a proxy of some sort. There were some rumors on reddit about Chinese nationalist Jihan and his company Bitmain being such a front. I'm no tinfoil hat kind of guy, but the more I think on it, the less of stretch it seems...

There are many who believe that the company Blockstream is a hostile takeover trying to prevent bitcoin's success. It just depends on where you read. Lots of censorship on r/bitcoin and lots of echo-chambering on r/btc.

Not that it's worth anything, but Jihan (although he has a suboptimally large amount of influence in/on the bitcoin community) has yet to demonstrate anything but a desire for it to succeed IMHO.

I just see it as a way to resell Chinese electricity. Digital currencies do challenge state-backed currencies. They'll never fully take over until taxes are accepted in a digital currency. As a tool for circumventing taxes though, countries do view that as a threat and will clamp down hard on it.

If you want to treat it as a digital collectible and pay taxes when you sell some for a profit, great. If you want to treat it as a currency and not pay taxes, good luck.

Speaking of which...for an American citizen, is moving coins to dollars taxed at a capital gains rate? How can the government know how much value was accrued?

Yes. Same as any other capital gains, they trust you to report it, and audit you if they don't believe you.

Reply on news.ycombinator.com