China declares cryptocurrency deals ‘illegal’
dailybusinessgroup.co.uk
dailybusinessgroup.co.uk
What has been announced now (by the Chinese central bank and a bunch of regulators) is that all crypto related transactions will be banned.
https://news.yahoo.com/chinas-central-bank-rules-crypto-0944...
Crypto is now purely black market currency in China.
But either way, it greatly limits the value of cryptocurrencies (and related concepts) in China.
I suspect the recent crackdown is more related to a fear of uncontrolled capital flight due to regulatory changes and anticipated slowdown of the economy.
I'm guessing it has to do with preventing people from moving wealth out of the country.
Though to be honest I don't understand how bitcoin can be used for getting money out of the country. Who would be willing to accept onshore CNY in payment for bitcoin in volumes if everyone is trying to move out?
And with the CNY, you can buy real goods. And with those real goods, you can export them. And with those exports, you can sell them for foreign currency.
So as long as they're running an export-oriented economy, it's going to be very hard to fundamentally stamp out crypto as an option. This mostly strikes retail traders / buyers.
I was thinking of two separate transactions with two separate parties: (BTC -> CNY, hidden as gift or loan) then (CNY -> goods, perfectly legal and normal).
China has "banned Bitcoin" dozens of times over the last decade. I mean, this is an ancient and well-known meme involving a certain South Park clip after all.
Maybe this time is for real, but all of these media announcements have one thing in common. They always conflate the concept of "legal tender" and "legality."
The number of authorities around the world who have warned citizens about Bitcoin using language like "no legal tender status" and "risky" and "no government guarantee" is legion. Easily thousands of times. Every time "journalists" with no business reporting on tech, law, or foreign governments interpret this as a "ban." 99% of the time, nothing happens and there is no ban.
So, maybe this time is different. Over the last year, an initiative toward greater centralized control seems to be underway in China's tech and finance sectors. Disappearing of wealthy founders. Restrictions on video game consumption. The three red lines. The ejection of the Chinese mining industry.
Then again, maybe not.
This is a false narrative pushed by the Bitcoin cult. It's supposed to create an impression that nothing has changed, so the price should not change.
2013: https://www.bloomberg.com/news/articles/2013-12-05/china-s-p...
2015: https://archive.is/Higoz
2017: https://www.reuters.com/article/us-bitcoin-china-idUSKCN1BJ1...
2018: https://www.businessinsider.com/china-eliminates-all-cryptoc...
2021: https://archive.is/s7nbw
"China Has Banned Bitcoin 13 Times Since 2012":
https://finance.yahoo.com/news/china-great-bitcoin-mining-mi...
https://translate.google.com/?sl=auto&tl=en&op=docs
https://www.google.com/search?q=%E5%8A%A0%E5%AF%86%E8%B4%A7%...
This seems like another step on a journey to maintain control over assets. So not the same thing as you have linked but nothing that should effect the market as China has been clear on its intentions.
I would be more curious about the larger game. A few front runner governments will establish there own ways to deal with crypto and then others will copy from a, b ,c. China's methodology is becoming more formal and therefore more copy able. I think we can already see the larger pattern and we already know who copies who traditionally... Would love to see a write up from this perspective.
You basically claim that Bitcoin was banned a month ago in China. But that is not true, it was legal to make Bitcoin transactions.
https://old.reddit.com/r/Bitcoin/search?q=china+ban+bitcoin&...
My market perspective:
"Everything is priced in."
Apparently, not in the crypto markets. Old news is new news, apparently.
Policy perspective:
The more DeFi becomes a thing, the less a policy like this will matter. It will still matter a lot, but it will pack less of a punch due to decentralized services.
My overall perspective:
If crypto still feels as speculative (in terms of trading crypto) 10 years later, then I feel the experiment to find a good use-case has ran for long enough.
Maybe I'm taking this to a place you didn't intend, or maybe this is an ignorant question but. . . .
What is the US market now, compared to 10 years ago. My experience is that 10 years ago Bitcoin was used to either buy drugs, or as a bet made by college kids that they could make easy money.
And. Well. It seems still pretty much the same in terms of existing primarily as a speculative tool.
And in all fairness, the speed at which you can send Ripple and similar cryptocurrencies is actually quite cool. It's a shame that it's mostly in its own little bubble still.
> Bitcoin was used to either buy drugs
In all fairness, I'm not necessarily against it. I'm not pro, but I do believe that many drug laws in most countries are against the idea of freedom. And I find it a comforting yet troubling thought (for different reasons) that cryptocurrencies fight against that (troubling: a 13 year old buying/using some very strong drugs, comforting: a 31 year old doing it for experimentation -- freedom is important).
Plebs cannot be allowed to have access to sound money, otherwise financial parasites can’t exists.
There are tons of these out there https://bitcoinerjobs.co/
Basically to people who need dollars to do productive work.
Oversimplification: The promise of work creates dollars and therefore dollars are created through work.
[citation needed]
You seem to have a fairy tale level of knowledge about how dollars are created. One of the Fed's favored way of created more money is simply buying treasury bonds with newly created money. Care to explain what work is done there (other than the work done by individuals at the Federal Reserve)?
There's a lot of disingenuous people out there, that for some reason believe bitcoin or other cryptos are "investments." I guess they missed that they are called crypto-CURRENCIES and not crypto-investments. And then they get upset that they are not, and go on to berate a currency for not being an investment. It's fine to be upset at any swindlers calling a zero-sum or negative-sum game like most crypto an investment, but if you actually read the white papers many cryptos make no such claims.
And there are certainty people telling you that you can get rich off dollars, just look at the FOREX trading peddlers telling you to get rich by trading fiat and leveraging fiat exchanges. I don't attack dollars for that!
And yeah, you can apply your idea to dollars, because one of the biggest way for the government to profit off of dollars is to print more out of thin air, therefore debasing the "investment" of the rest of the dollar holders. You can choose to not apply the idea to dollars, and rather bury your head in the sand if you like, that's your prerogative.
There are certainly influencers as well influencing you to start FOREX trading changing dollars back and forth to get rich, or leveraging dollar exchanges in a zero sum game attempt to strike it big. This blog boasts a man made $6M trading USD and NZD [1].
You use circular logic that bitcoin is an investment because it is a pyramid scheme which is by your definition an investment. Then you say dollars are not an investment because "everybody knows you can't make money off dollars" (which is patently false.)
Some people may view bitcoin as an investment. Some people may view dollars as an investment. There is no requirement it be treated as one. Again the bitcoin whitepaper, and open implementation of it which you can readily acquire the source code to, makes no promises of returns, stability in exchange rate, or appreciation. Any pyramid scheme is the fault of some swindlers who could create a pyramid scheme in any number of currencies -- not "Bitcoin: A Peer-to-Peer Electronic Cash System." You seem bitter at bitcoin because you chose to take the word of swindlers rather than the actual white paper and public implementation which made no such promise of profits.
[1] https://forextradingstrategies4u.com/millionaire-forex-trade...
Your worldview is ridiculous.
This is effectively not that different than a company dumping chemical in the local river rather than disposing of them properly. They are encroaching on my rights to a livable planet for their own personal financial gain.
There are many reasons to dislike crypto in general, but "it destroys the environment" only applies to PoW-based systems and not crypto in general.
Also, you should read the guidelines: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."[1]
I rephrased that first sentence to remove the reference to HN voting. I was simply remarking how the tone will cause people to object to it quicker regardless of the merit of the underlying thought.
So quite a bit actually. We are talking hundreds of billions in market cap at least.
https://en.m.wikipedia.org/wiki/Energy_usage_of_the_United_S...
https://www.nasdaq.com/articles/bitcoin-emits-less-than-2-of...
Exactly, step my step, please explain how adoption of bitcoin would reduce military energy consumption.
"Base demand for dollars is created due to taxation" [1]
Which of course completely contradicts: "The (mostly paid for by tax) army has nothing to do with the value of a dollar." [also 1]
[1] comment by 'arcticbull' on 'Hacker News'
The maintenance of the army doesn't create demand for taxes? Are you aware this is one of the most significant historical reasons for the collection of taxes?
Could you remind me again of when the Army was abolished in Japan and why, and whether the US military (which drives part of our demand for taxes) had any role in that?
Japan pays for the Army. The US army [1].
[1] https://www.aljazeera.com/news/2021/2/17/japan-us-extend-agr...
Clearly the one arguing in good faith is the person leading off calling all crypto a ponzi scheme because of several myths you misunderstand. Or given your financial literacy, probably intentional disingenuous portrayal.
I understand perfectly well which is why I’ve made the points. Your retorts are argumentative for the sake of argument, and you’re not actually making any sort of case that would address my overarching narrative.
Even if I conceded all of your points, which I don’t, my position would remain totally in tact.
When I buy crypto, I EXPECT to lose at the very least the exchange fee(~0.25%). Why on earth would I expect any gains on a currency, or expect there to be little or no risk on something so new and relatively untested versus something like gold?
>> High returns with little or no risk.
This is not a requirement of cryptocurrency. And there is no guarantee they will have a high return. There is certainly no guarantee in anything like the bitcoin whitepaper that you will have no risk to fluctuations in exchange rate with fiat. [1]
>> Unregistered investments.
Currencies are not synonymous with investments. Cryptocurrencies do not have to be peddle as investments, and only a moron would use them that way. [1, look anywhere for the word investment, interest, or appreciation -- you will not find it].
>> Unlicensed sellers.
Whether the government approves of something has no bearing on whether it is a ponzi scheme or not.
>> Secretive, complex strategies.
The implementation of a number of cryptos are both open implementation and open white paper [1]. Hardly secretive. I do agree the closed source ones could certainly be ponzi schemes, and perhaps you could also make an open source ponzi scheme.
>[edit2] So with that in mind, it meets many (but not all) of the classic definition elements.
>1. All returns are generated by bringing new money into the system. The only way someone can make money on Bitcoin is if a new person invests. That money is then distributed to the earlier participant, net of miner fees.
Currencies aren't meant to provide a return. Some people even consider currencies more useful if they're slightly inflationary. But lets examine your statement anyway. All other bitcoin holders appreciate their asset when someone loses their keys (deflation). An individual can make a return at the expense of the others by mining (inflationary creation). Or I could make fiat money on bitcoin by arbitrage and work, like selling coffee for bitcoin in a circumstance where people want it and few others are offering it except in fiat.
>2. There is no actual business underlying.
Just as there is no actual business underlying commodity money? This doesn't make commodity money a ponzi scheme either.
>3. The constant flow of new money is required to keep the price from collapsing because miners extract something like $50M in welfare from the system per day.
Not at all. A constant confidence in the crypto we examine is required to keep the price from collapsing. If no transactions are happening, then we are simply slowly inflating. Some currencies have infinite tail emission (infinite slow inflation) like monero. For bitcoin most coins have already been mined, so the amount of remaining inflation is finite. Even under the fiction that 50 million per day were extracted, it would take about 54 years for the price to collapse (care to imagine how much you would lose on USD if you stuck it in a mattress for 54 years?)
>4. The entire space is unregistered investments hawked by unlicensed sellers.
Crypto-currencies are not generically investments. Yes I know some scam artists promise returns, but this is not a necessary feature of cryptocurrency. For instance, bitcoin and litecoin do not promise any sort of returns, and thus cannot be considered investment vehicle by anyone but speculators (speculators can call anything an investment, including USD).
>It's a negative sum wealth redistribution scheme the takes money from new entrants and gives it to miners and to old entrants. The miner portion is what makes it negative-sum.
The same is said of gold, all the way up to gold miners paying for electricity and workers by liquidating some of their gold which makes it negative sum. Yet gold has been a legitimate store of value, and often currency, for thousands of years -- certainly no ponzi scheme.
Base demand for dollars is created due to taxation. As the money supply is managed via fractional reserve lending, each new dollar that enters circulation is backed by the demand for repayment of that loan. When someone borrows money from a bank, the bank enters a negative balance in its ledger and the borrower gets a positive balance in their account. This is how money is created. As the loan is repaid, the money is destroyed.
Dollars are fully backed by demand for dollars. It's really quite elegant.
> Do you understand that the reason it has value is because it’s backed by the US military, which provides peace and stability for industry to consume a vast amount of energy to produce goods that get shipped around using fossil fuel?
This is utterly irrelevant. The US military existed for hundreds of years on hard money. World wars were fought on hard money.
> Have you calculated the total energy expenditure of the entire US financial system, direct and indirect, and then compare it to proof-of-work calculations?
Sure, and as a percentage of transaction count, transaction value, or basically any other metric it utterly pales in comparison. [1]
> Don’t just parrot what the current-day zeitgeist told you to think.
Ditto the crypto echo chamber.
I get that this is working econ theory, but is that even meaningful? Do you honestly think people hold dollars because "someone can use it to.pay taxes"?
And for calling it fundamental, yes BTC requires burning lots of energy to have a transaction. Even if it goes so that day to day most transactions are lightning based you still have to burn that energy continuously to provide the security for new links in the network.
Or living in a country that continuously devalues its currency, forcing exponential consumption, thus stealing from the poor to give to the rich and destroying the environment while at it?
These things actually have huge meaningful state security risks. Not too long ago the entire country of Albania got swept up in Ponzi schemes. It go so bad, they imprisoned their finance minister for trying to stop it. Then they had a civil war about it. The IMF had to airdrop in bags of money to bail them out. [1]
1997 Albania is what the maxis are working towards.
In this case the PRC not only has the moral high ground, but also is acting out of a real, rational fear of economic collapse.
If America had any sense, it would put the ban hammer down on this before it gets any worse.
[1] https://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.ht...
And what exact path do you see a 'dollar collapse'?
If there were a serious problem with the USD, first, because of it's seigneurage position in the world, it would imply a 'giant crisis'. It would be bad.
People would switch to other currencies like Euros, Pounds, Canadian / Australian Dollars and Swiss Franks, RMB and Yen because they are fungible and transactable.
Gold and other commodities would increase in value, but only as stores of value, they're not good for transactions.
But you'd park your capital in places that are safe havens and convert out as late as possible to the (increasingly worthless) dollars. Arguably we're already at a place where keeping any non-emergency funds in USD is a terrible idea.
My point is exactly what you said: that you'd see a flight of capital to hard assets like gold and bitcoin to shield it from inflationary forces and their contagion. In that scenario, bitcoin is no more a "ponzi" than gold.
Real-estate is valuable on some level, so are most other assets - even 'currencies', however poorly managed, are valuable because people need them to do stuff.
The worst place to go is crypto, it's the bottom of the 'store of value' equation in almost every way - the fact that the government would wipe them out immediately being just one of many risks.
Cypto, at least the way they exist today, have no rational place in anything other than for entertainment and intellectual speculation.
Do you have a seminar I can register for?
...
But seriously, people will speculate on things and bubbles will happen in all assets, some are more resilient than others.
While the future is never easy to know, your predictions can be dismissed out of hand because we definitely have some 'hard parameters' we have to deal with.
BTC is definitely an outlet for illegal activity and tax evasion, and to the extent that it becomes material in that way, it will just be banned. And when it's banned in China, EU, USA, UK, Aussie, Canada, Japan, Korea etc. - well it probably won't be of much use to anyone.
No regime will allow their tax base to be challenged in that way. And neither will the population, so the banning will be a popular measure.
So by nature if it's own design, it can only be an annoying parlour game.
You can dismiss my predictions all you want, they're still predictions. Maybe instead of just dismissing them, state your own.
Consider the inanity of BTC trading at $1M, something so utterly volatile couldn't feasibly be used as a currency, for much the same reason we cannot use it now, it's deflationary: nobody wants to spend it, they want to hold it and believe in magic. That's the last thing you want in a currency, it means circulation dries up.
BTC has already killed itself as a currency for reasons obvious before it's inception.
Chiming in on boards with 'to the moon' / 'don't lose out' / 'you too could be a millionaire' rhetoric is not helping.
I said simply that either you’ll be proven right in a crash, have some point where you’d be willing to reverse your position, or just never change your mind. These three scenarios are obviously the only outcomes. So I was wondering if you could write down a point in terms of time + price where you’d change your mind. If not, and there is no other scenario where you would, then you’re holding an unfalsifiable position.
Even if it does, Bitcoin may very well collapse before the dollar.
It doesn't meet the traditional definition, no, which is why I referred to it as a "distributed Ponzi scheme" - it's closer to an MLM in classical parlance.
[edit] Here's the SEC definition:
> A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.
> With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.
And here are the red flags that the SEC warns folks to watch for:
> High returns with little or no risk.
> Unregistered investments.
> Unlicensed sellers.
> Secretive, complex strategies.
[edit2] So with that in mind, it meets many (but not all) of the classic definition elements.
1. All returns are generated by bringing new money into the system. The only way someone can make money on Bitcoin is if a new person invests. That money is then distributed to the earlier participant, net of miner fees.
2. There is no actual business underlying.
3. The constant flow of new money is required to keep the price from collapsing because miners extract something like $50M in welfare from the system per day.
4. The entire space is unregistered investments hawked by unlicensed sellers.
Edit: parent comment was edited, originally said:
> It actually matches the SEC definition of a Ponzi scheme haha, which happens to be a little bit less restrictive than a traditional definition.
> It's a negative sum wealth redistribution scheme the takes money from new entrants and gives it to miners and to old entrants. The miner portion is what makes it negative-sum.
You can’t build a building on top of nothing so if land has a building on it you can apportion some of the productivity of the building to the land itself.
Agreed land without improvements is zero sum.
"Ponzi scheme is an investment fraud that"
"investment fraud" - "induces investors to make purchase or sale decisions on the basis of false information"
Major cryptocurrencies do not present "false information", therefore they are not "investment fraud", therefore they are not Ponzi schemes.
This statement is obviously false, as there are people born daily.
> information .. buried in code .. some consider that fraud
It doesn't matter that people consider it fraud. It is not fraud neither by definition, nor it is fraud "in spirit of law" (burying it in code does not have the necessary intention to deceive).
You can twist the definition of fraud as much as you want in your mind, but if you do that - you are just a part of ignorant mob with pitchforks.
But maybe someone from China can chime in and explain how serious the enforcement of these bans will be. I have seen countries with all kinds of laws, none ever enforced.
Speak against the government--you're no longer allowed to transact in society.
Retroactive tax...boom, negative balance.
We agree on the problem, but not the solution. Technology does not solve challenges at the people/politics OSI layer.
[1] https://www.visualcapitalist.com/700-year-decline-of-interes...
China has the most restrictive capital controls in the world. It is not surprising at all that they have banned a legitimate threat to their control over the country's money.
"When the ships come into harbour, nail them to the dock" - not realizing that eventually, when the tide goes out - the ship will go down several feet relative to the dock and be damaged by the fixed boarding blanks.
You have to use ropes to fix ships, because the water moves.
Dumping the Central Bank and even using hard currency would lead to economic collapse the very first time there is an existential shock - and the only 'saviour' would be a different form of monetary intervention i.e. fiscal policy (i.e. government budget).
Also, in a completely unregulated scenario, powerful financial interests would leverage ownership of the crypto scheme and power would even be further centralized.
Bitcoin is disproportionately owned by a small number of players who have absolutely zero civic perspective, they're looking to make a Trillion dollars out of nothing.
If you don't like that money is managed by a large swath of banks working together with government and regulatory oversight and frankly relative transparency ... then you really won't like it when your monetary system is managed by the insane tyrant offspring of the Winkelvi and Satoshi dynasties who own 30% of the economy.
Crypto mining that is energy intensive should be banned immediately on that basis alone.
Aside from that, anyone declaring monetary value on a crypto asset should have to declare it, and if they don't, they go to actual prison for tax evasion. I'm looking forward to those people replacing weed smokers in prison - that would be effective public policy.
You're both pro legalization of weed and pro government? The war drugs is one the many fronts of the war on personal freedom.
Ironically the thing you're railing against -- being an anonymous uncensured transaction platform -- is one of the few ways weed dealers and consumers can continue to transact.
> Crypto mining that is energy intensive should be banned immediately on that basis alone.
Which is only neccessary to prevent
> Also, in a completely unregulated scenario, powerful financial interests would leverage ownership of the crypto scheme and power would even be further centralized.
PoS _is_ succeptible to this as ownership means a voting stake. PoW prevents entrenched interests from controlling it.
The kind of straw manning that reveals itself here due to the complete lack of civic thinking in some circles is really disturbing.
There is no necessity for mass energy usage for crypto, there are any number of ways to distribute new units of currency. Again the use of the term 'necessary' here is a hint at the false understanding of currency through the lens of a particular form of crypto.
Crytpo, at least today, is a dystopia. Go and live for a few weeks in a country with weak civic institutions and see for yourself. This joke is less and less funny as time goes on, the experiment, in it's current form, has run it's course, it's long since over.
I used to love the idea of the government fixing societies' woes. Unfortunately in my lifetime I've seen several business cycles wherein the rich get bailouts and the rest of us lose our shirts. My country has entered wars I didn't then, and don't now support. I've seen 3 letter agencies topple foreign governments, and I'm watching China leverage its social credit system and implementing CBDCs. I've seen the infrastructure in my country become dilapidated and homelessness skyrocket. I voted for 'change' and got none.
I am civic minded, and to me the government is starting to look like the problem. As such, I support any peaceful alternative. There is no such thing as consent of the governed, and I plan continue believing what I see with my lying eyes.
Tax the damn land and do negative interest rates on cash and use the negative interest to pay for the deposit insurance.
That's it. Bonus: Get rid of other regressive taxes. Lower income tax, corporate income tax, capital gains tax, sales tax, VAT and so on. Rather than redistributing incomes redistribute jobs.
In a world where economic rents are eliminated, income = spending is true on an individual and country level and jobs are fairly allocated there is no need for charity and welfare. It would be one small step closer to utopia yet it will not happen because nobody will recognize it as a "free market" that is supposedly the be and end all of economics even though it would be free-er than anything the capitalists will come up with.
Yes, here is the homework: If the solution is so simple how come there are so many people wanting to keep the system unfair and rigged?
Here is my answer: It's because the rich need to trick people into believing that the source of inequality is fair and morally justifiable. After all, if inequality has no place in a moral framework then any source of inequality would be tackled immediately.
So your "solution" is a regression to something that was tried and didn't actually work well? https://en.wikipedia.org/wiki/History_of_central_banking_in_...
The solution to real productivity declines is real productivity increases, and the incentive to reallocate your resources into the most productive activities is lacking when the cost of capital is effectively nil and the central bank bails out any misallocation.
I don't know why but when the central bank intends lower interest rates to overheat the market people somehow stop believing that the market even exists. It's really strange. I mean it. People talk about how the market works and will fix everything on its own but as soon as there is any government action even action that supports the market suddenly people think it will completely break down, as if the market didn't exist or function the way they say.
Bankruptcy and unemployment are the means with which we "prioritize and allocate resources". They are, by definition, when you stop doing what you were doing and start doing something else. So no, I would disagree that "governments are begging for this to happen" - I can't think of a government that's encouraged bankruptcy and unemployment since the 1980s.
I view various forms of capital as a way to get over local maxima in economic efficiency. You borrow money or raise funds now so that you can build up tooling and innovations that will let you work more efficiently in the future, and then if you're right, you make lots of profits and can pay back your loans & dividends. If you're wrong, you go bankrupt, your investors take a haircut, and that capital goes back to other more productive activities.
Constantly growing debt balances and inflation, however, I view as a way of lying to ourselves. They're basically saying "Well, in the future, things will get better", but when the future arrives and you still don't have profits, shrink the yardstick so things look better. That's exactly what "government action that supports the market" is - it's a way to avoid the failure of enterprises and loss of jobs that the market, on its own, doesn't demand enough to make profitable. Do this over 90 years and you can get some pretty extensive misallocation of capital.
Inflation is the economy’s rate of debt forgiveness. Bad when high but good when low but above zero. Without it economies get clogged by debt. A slow rate of debt forgiveness is more economically efficient than bankruptcies or debt jails. Inflation also combats sticky prices by forcing contracts to be regularly renegotiated to supply demand prices. For example wages are hard to adjust down and having inflation do that automatically few % per year is more economically efficient than having to fire workers and replace them.
Societies that realize this implement debt forgiveness policies such as https://en.m.wikipedia.org/wiki/Jubilee_(biblical) and modern bankruptcy and inflation. Societies that fail to do this stagnate, with many in them trapped by debt slavery.
Slow growing stagnant societies lose competitions for resources to societies that implement debt forgiveness. Sometimes stagnant societies implode in civil wars and revolutions as happened in France, Russia, China. This also results in wealth gaps shrinking but at far greater cost.
A lot of the things that are happening now are not new. Sure, actors have changed, events have new facade and technology adds an interesting spin to it, but at its core, none of it is new to people who are aware of human history.
Separately, I will add that there are developments where 40 years is genuinely not long. As an example allow me to trot out the change of being gay being classified as a mental disorder in 80s to today's predominant understanding as a fully functioning member of society. That is a stunning evolution of societal mores in a short amount of time.
I suppose I understand that people would like to see instant change, but at certain scales, 45 years is 'not so long ago'. From societal memory point of view, it isn't. Only fool forgets that government can take their property. I will illustrate that further with a geological example. By those timescales, humans just showed up yesterday.
You mean something like old Reserve Act of 1934 in the US?
https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...
Chinese citizens can invest in the former, but (via government currency exchange controls) can't participate meaningfully in the latter.
So if China exits global stock markets... there isn't that much Chinese money being pulled out of them, because there wasn't that much in them.
What money China is investing internationally appears to mostly go to bonds, construction financing, and asset leases / purchases.
PS: What this appears to really be about is severing links for extraordinarily wealthy Chinese citizens to move money outside the reach of the PRC.
Which, if you were running an expansionist monetary policy intended to facilitate domestic economic growth, while simultaneously cracking down on the wealthy in pursuit of equality, is presumably something you'd take very seriously (as a command economy). Lest all that new & old money just fly offshores.
The problem with high inflation is that it usually (but not recently) goes hand in hand with higher interest rates (i.e. money costs more). Which tends to discourage business borrowing, which acts as a damper on non-financial investment (i.e. spending on factories, marketing, R&D, etc.). This has the effect of slowing down economic growth.
On the other hand, high inflation/high interest rate environments tend to arise when growth is high. Because high growth tends to go hand in hand with a rise in wages, increases in demand (which shifts the demand curve, and thus raises prices), increases in financial speculation, etc.
There are a ton more "on the other hands". Economic analysis is complex and difficult because it's a tangled mess of interdependent feedback loops that constantly change. A single policy action has an avalanche of cascading effects, some of which will be counter to the policy objective. I'm not suggesting humanity should just roll over in the face of this challenge. We should just be aware that it's a "hard problem" and there are never any simple solutions.
No mining needed.
China can't ban 2 (or perhaps they could by putting the great firewall into overdrive) so they are banning 1.
However I'm not entirely clear from the article exactly what the status of crypto in china now is. It's not clear to me from the quoted statement if it is actually illegal to use crypto to pay for something or to hold or transfer it, or if it's something a bit more subtle and limited.
There are A LOT scams going on with all coins, people put money into it without knowing anything about cryptocurrency. If you read recent news about Evergrande, when Chinese people invest money for speculation, no one is considering the risk of losing money. I wonder if this has something to do with this.
*$50k bitcoin/gold if bought today
I would hold BTC for a 100 year horizon. I wouldn't hold it for a 500 year horizon. Actually I would not hold any asset for a 500 year horizon (including gold): I don't have kids and I don't think I will have to worry at that time.
[1] https://www.banxico.org.mx/marco-normativo/d/%7B097567D4-647...
I mean, yes that would be one way. But apart from that, they don't need to find every last one. Nobody cares about a miner making $0.5 per day on their GPU. The target is the big mining farms drawing multiple megawatts of electricity and you can just ask the power company for the address of anyone using that much electricity. There can't be _that_ many of them, so just visit them all and see if they are running a legit power-intensive business like a metal foundry or if it is a crypto mining farm.
How hard could it be for the Chinese government to identify suspiciously large amounts of power use? Malaysia of all places recently managed to seize and destroy around a thousand bitcoin mining rigs.
Bottom of the line is always going to be if you can exchange crypto for goods. If most people feel that the crypto is worthless, the value will plunge and the buyer pool will as well.
It's definitely not impossible to obfuscate and use crypto even in a country where it's banned, but it isn't that easy.
Using people subject to these risks in service of MLM recruitment pitches is not a moral good.
Yes! This is exactly the kind of behavior you did in your previous post. I'm glad you acknowledge it.
Of course, I did not do what you state here, since I wasn't actually responding to anyone nor were there any "holes in my argument" since I didn't even make an argument being refuted. (I entered this thread here far down the chain of the discussion, if you actually read it.) But it's cool to see that if I had done something like accusing people of such things without any substantive retorts, you'd agree your behavior was the same kind of dodge.
1. Radio transmitters are by definition easy to detect: once you get identified, you are in a world of trouble because you demonstrated full knowledge that you were doing something illegal. Anything which can be used to circumvent the Great Firewall will be treated as a threat to state security even if you personally are only using it for a less serious crime.
2. Blockchains are a censor's dream: you have a full signed confession of every transaction made by the person you just compromised and a list of everyone they corresponded with. If you catch someone new and have ways to get them to talk (China has a well-honed system for this), now you have that for all of their past transactions, too. Have a few undercover agents tell people about this mesh networking app and you can quietly roll up an entire network over time while making it look like the police just happened to get lucky breaks a lot.
3. Blockchains are hard to conceal: they require huge amounts of data transfer and you have to be online at the time you make a transaction, both of which dramatically increase the challenges of trying to be covert.
All of those combine into a huge problem for using blockchains: you don't need to worry about any of that or the extra expense _unless_ you're doing something illegal. That means that simply participating is inherently risky — better hope that you don't ever make internet traffic which would show an interest in this or have someone audit the apps installed on your devices — and the costs are guaranteed to be high because everyone involved is taking on the extra risk of whatever you're doing (and the chance that you're not being completely honest about the level of risk or are compromised) leading to scrutiny and/or that you will fail your opsec in a way which provides proof of their noncompliance.
No matter what you think of the Chinese system or whether it's right, it seems like a system designed to expose its users to significant risk in addition to whatever it is that they're trying to hide.
https://www.youtube.com/watch?v=jFp86n7QCf0
This analysis suggests that the value of tracking every financial transaction will eventually cause governments to all want to institute there own crypto currencies and eventually outlaw independent crypto currencies.
I’m not saying I’m totally convinced that PoS can be really secure, but I am reasonably confident that some developing such systems sincerely believe it can be, and have no deceptive intent. This in my mind seems to contradict it being “a scam”, which to my mind requires deception.
In fact, I do suspect that it can be secure, for some reasonable sense of “secure”, though I am not especially confident in this.
If you mean "proof of stake" - I've never heard anyone describe any environmental issues with them, so I assume that they either don't exist or are far smaller in impact than PoW.
If you mean "proof of storage/space" - it seems like that tends to produce very high write volumes, which in turn burns SSDs out very quickly[1] - and you can argue that that's bad for the environment. How bad, and whether it's worse than the energy consumption of PoW, I'm not sure. From one perspective, it's worse, because you could theoretically power PoW mining using exclusively green energy, but you can't pull the raw materials for SSDs out of thin air.
Sure, but in most cases people would, at best, be seriously inconvenienced if they were immediately banned. At worst, people would die.
If bitcoin was banned worldwide tomorrow, it would be an interesting story in the news and the internet would be furious for a while; there would be no significant real-life impact. It would probably be the most slam-dunk "obviously we should do this" environmental regulation in history; even things like "we should not put mercury in lakes" had significant downsides compared to banning bitcoin.
So far bitcoin has negative utility even aside from environmental disaster (ransomware).
First they ignore you, then they laugh at you, then they fight you, then you win.
A few years ago people laughed at me for buying bitcoin, it's good to see bitcoin adoption moving along nicely.
Not so much. That sounds like like The Power of Positive Thinking-style BS (crypto is full of it). Usually when "they" fight "you," they win, but losers are usually forgotten and an accurate statement wouldn't make a very good motivational slogan.
"Excellent news" would be the halting of state subsidies for coal mining, and introduction of a carbon tax.
They will probably never stop subsidizing coal mining though. Otherwise they will get even more reliant on foreign coal which gives a hypothetical US blockade much more clout.
But this world is not static. Let's say for example, all goverments would become more strict in taxing energy consumption. (Presumably to help save the climate.)
Now at some point there is a market incentive to develop mining techniques that optimize for less energy consumption above all else. This would lead to better technologies and thus environment friendly mining techniques.
So this would mean that two factors in this world have changed. Namely taxation on energy and energy consumption while mining crypto.
But this goes further. What if the usage of crypto enables reduction in carbon imprint in other sectors? This could be a possible development.
And so on. The world is always changing.
Bitcoin mining's main cost is energy usage. It already fully optimises for less energy consumption. But because the way bitcoin is designed, any gains in energy consumption will cause mining difficulty to go up, and with it energy consumption.
Bitcoin is designed to be anti-efficient. All improvement in efficiency of mining are immediately cancelled out by difficulty adjustments. That is the economic model of bitcoin: It will always use as much energy as you can buy with the mining rewards.
There is already a market incentive for that (electricity is not free), and there is already a solution to this (proof of stake). Please stop advocating and using proof of work shitcoins.
[1] https://arxiv.org/pdf/2103.14713.pdf
This particular paper shows that every proof-of-stake variant is fallible into the "rich get richer". That means these PoS schemes do look like shitcoins, not the other way around.
Given that and given that I do not like Biticoin in any of its capacities (PoW is not even the most wrong thing with btc), I would like to advise everyone to hate all cryptocurrencies equally strong.
That's the insidious thing about PoW, though: it will absorb efficiency improvements by design. If a chip came out tomorrow that halved the amount of energy used per hash, instead of halving the CO2 use of PoW, miners would be incentivized just to double the network hash rate.
The question is whether that will happen before serious consequences of climate change. While I agree that market (as well as government) incentive is likely to optimize these systems for less energy, and cleaner energy in general, humans are lazy all the way through the bell-curve. Because we developed for millions of years in a hostile world with scarce nutrition, we are inclined towards conserving nutrition and calories, thus we are still inclined mentally to be reactive more than proactive.
What I'm saying is that you might very well be right, but I am pessimistic in that I think we may react too late. Our efforts to change our ways have been, for all intents and purposes, a joke for the last 40 years.
> It is based on the wrong assumption of a static universe.
I am glad you bring up this point, although there's a flaw in it.
What I think you are saying is that the universe is full of change that the myopic human brain struggles to comprehend in its short lifetime. This is something I frequently have difficulty communicating to people.
For instance, one of my long time interests is in native plants and foraging. The truth about "native plants" is that little of it approaches a definition that can be considered truly "native". What's native to a person depends on their perspective. Native since when? Since humans showed up? Since before European settlers? Since the Pleistocene? What people think of as native plants are often as recent to an area as the 1400's or were carried by birds and critters from other parts of the world at some point in prehistory.
To your point, the world has always been changing long before we showed up, and attempting to keep it in suspended animation may be a losing game.
But many in the native plant community (yes, there are people simply interested in native flora) won't have that perspective, let alone consider it intellectually. I left those communities because my view that not every non-native plant is "invasive" or "noxious" was considered heresy. Because the world has always been in flux, I generally don't believe that living things introduced in our lifetime must be eradicated to maintain the image of the world we are familiar with. There are of course exceptions, but to many zealots every plant they don't like must be an exception. It doesn't even matter if an introduced plant doesn't pose a threat to surrounding plants and animals. They want it gone because reasons.
In some ways, climate change can be viewed in the same way. While I absolutely think that climate change caused by humanity is an alarming concern, I have trouble discussing the issue with people because they have the "static universe" world view. In their minds, our current Earth is the one that was always meant to exist, which is pretty anthropocentric. They believe that, at least until recently, we had just the right amount of glaciers, just the right amount of snow in the winter, and just the right amount of heat in the summer to melt the snow caps for drinking water and give us a nice tan; it's just as God intended!
The tricky thing about climate change is that a certain amount of it was destined to happen whether we were blowing CO2 into the atmosphere or not. This fact (and it is a fact) doesn't change my view that we should be concerned about the warming of the glove, but it's often ignored by people. They read facts about melting glaciers and simply conclude, based on their limited earthly experience, that glaciers shouldn't melt and that glaciers melting are necessarily a sign of doom. Ironically, some of them are still opposed to nuclear energy or seriously investing in solar technology, but that's neither here nor there.
On the other hand, some use the fluctuating-universe theory to rationalize their lack of concern. To them, all change is what God intended, figuratively speaking. It's the mirror image of the supposed counterargument.
There are solutions that should satisfy both sides of the coin. Will they ever agree to use those solutions proactively? It seems we are at a political impasse where one's position on these issues primarily depends on where their personality and temperament naturally drifts them towards rather by highly conscious choice. (arguments around free-will notwithstanding)
Has there ever been a communist country that lasted 5 minutes without a form of capital?
Was the American economy ever a "free market"?
While I agree that China isn't communist in the term's strictest sense, it ultimately doesn't matter. Systems that can't adapt eventually collapse, which is why no one word can really describe economic systems or their nations. I've been told on HN that what I'm saying is a "no true scotsman" fallacy, yet when people insist that America has "free market capitalism" or that China is communist because CCP has "communist" in the name, they're essentially making an only-true scotsman fallacy.
Personal freedoms aside, it all comes down to is how involved a government is with its private sector how much value it extracts (overtly or covertly). Everything else is fluff. Nobody really cares about personal freedom or "owning the means of production". It's all about the level of centralized control (the input) and where the energy of that system goes (the output). To say that anything is "communist" or "capitalist" is a dismissal of the inevitable nuance.
When will this be truly enforced?
I kind of assumed BTC mining was going to be owned by Chinese nationals within a couple years, at which point the government would nationalize it and BTC would no longer, in practice, have the promise of a distributed store of truth.
Egg on my face.
For instance El Salvador made bit-coin legal tender there... So china has out lawed what an other country has declared legal tender... Might make transactions between those 2 countries interesting....
... as is everything else? Other than governments declaring it illegal and intermediaries black listing it, I mean.
Relatedly, can they jam Starlink?
> they are not legal and should not and cannot be used as currency in the market
So, you're not allowed to use it as a currency. Can you still use it as an asset?
Its being hyped as "new" but its not.
Here's the one from 2021: http://www.safe.gov.cn/safe/2021/0924/19911.html
There are changes. E.g. the 2017 announcement doesn't mention 衍生品 (derivatives) at all, while the 2021 announcement explicitly lists trading them among the prohibited activities.
even aside from reducing the amount of financial stupidity in the world, bitcoin uses as much electricity as entire countries! to process 4 TRANSACTIONS PER SECOND:
https://www.blockchain.com/charts/transactions-per-second
what in the ever-loving fuck are we doing with ourselves.
If you think it through, it can't work as only a transactional mechanism, because the price won't be stable. It has to first become a big asset class with a lot of liquidity, which means it has to go through a growth phase, i.e. speculation.
If PoW is still around, but the price dumps low enough that miners are only burning, say, $1,000,000 a year worth of power, that'd be a great improvement.
Panic/optimism/panic/whatever.
There’s nothing behind the price but pure sentiment.
just kidding. I see 'crypto', I think 'cryptography', and China banning cryptography (except for the party/government) doesn't seem that far fetched, so I think its a bad headline.
As long as you can use something - be it a coin, a bill, a SWIFT transfer, a blockchain transaction or a Nuka-Cola bottle cap - to pay someone for something, and a third party would be able to identify it as a purchase, same things will happen. A criminal will be able to take your purchasing power and use it themselves. A taxman will be able to collect a percentage of your trade, and men with guns will take you in front of a judge if you refuse.
The manifestation of value doesn't matter, because money isn't a thing, it's a shared belief.
A blockchain based currency will exist as long as there's someone with a sufficiently powerful computing device connected to a sufficiently low-risk network that can be accessed legally or illicitly. A blockchain wallet will exist and be yours alone as long as you keep the password in your brain, never write it down, and resist attempts to extract it from you.
This means that, in comparison to conventional currency (including Nuka-Cola caps), a blockchain economy is much easier to operate undercover when it's outlawed.
> a system where TPTB get to fudge the books as they see fit
This depends on whether the media are in to the party or not but when they are this is mostly true.
> impose taxes via intentional inflation
This is a fact in those countries which have control over their own currency.
> and keep tabs on your every transaction
This is a fact and one of the driving forces behind the "cashless society".
2) The expansion of the money supply is not necessarily inflationary.
3) Inflation is very different from taxation: if you hold cash you’re supposed to circulate it, either by spending it or by investing it. Inflation disincentivizes cash-hoarding, and also deflated the value of any debt you might have.
2) ...but it generally is just that, inflationary. The fact that there can be exceptions to the rule does not make the rule less valid.
3) ...and inflation is also used by governments to provide funds (by "printing money" in some way or other, the actual implementation depends on how the currency is regulated) which otherwise would be provided through taxation, leading to inflation and as such reducing tax payer's purchasing power - just like taxation does.
2) it's not an exception to the rule at all. The rule for inflation doesn't mention how much money exists, it only mentions how much money circulates. More money existing does not necessarily mean more money circulating (eg.: money tends to concentrate in certain places for various reasons, rather than diffusing freely).
3) Sure, but two things that have similar features are not always similar in essence or nature. Swords and needles are both sharp, but you wouldn't argue that they're essentially the same. In fact in your own example, taxation for certain purposes could be either inflationary or deflationary (eg.: austerity measures, including those that involve taxation, are deflationary by design).
BTW the chip shortage has nothing todo with mining, but if you believe that lie Nvidia and AMD tells you since 5 years...well then that's to bad.
Needless to say that its also technically impossible to ban crypto. Its like banning torrents or even harder and we all know torrent was attacked heavily in the past but it did not go away.
Banning crypto in a practical sense is actually quite easy. Prohibit any business and any bank in dealing with them. If you cannot do legal transactions with e.g. Bitcoins any more, the market mostly dries up. It is not necessary to ban any single coin in existance, but its wide-scale usage in the normal economy.
By the way, there was never an attempt to ban torrents itself. That would have been reasonably easy on a protocol level. It was about banning illegal torrents. As in the content, not the protocol.
The hardcore crypto types would carry on using it but like 95% would give up - that's sufficient.
Another use is tax evasion and money laundering.
Why is crypto any better than cash if users are forced to deal in person? I understand the argument of not having to carry around a duffel bag that could be seized. But nations can disrupt crypto markets on a global scale.
At the very least, they can make it difficult to exchange for actual, usable, local currency. Which appears to be what China is poised to do.
Odds are that, given fiat to launder, or crypto that needs to be converted to fiat that still needs to be laundered, they would cut the useless step.
The only illegal industry that would still see the use for it is maybe ransomware, but ransomware is not a cyclic business, so it would be surprising that they'd find enough individuals on the street to convert their millions easily.
No one wants to ban crypto. The goal is to ban financial institutions that handle fiat from trading with institutions that handle crypto.
From there, if people want to accept funny money as payment for pizzas, it's up to them really.
All black markets have an incentive to use it - including state actors (e.g. weapons deals). Getting caught laundering Monero is preferable to getting caught selling missiles to the Saudis.
https://kotaku.com/ps4-crypto-warehouse-was-actually-farming...
Additionally, some individuals steal electricity (eg. from their workplace, or if they have electricity included in their rental contract). Cryptocurrencies have thus conveniently enabled a form of electricity theft and fraud previously impossible for the individual.
Steel manufacturing requires tons of electricity, and it is already impossible in EU without enormous subsidies. It's an industry surviving entirely on life support.
You can bribe enemy army staff with it.
But seriously, just how much is too much when it comes to steel subsidies, and just how much EU can tolerate its steel industry failing so hard to upgrade?
Rather than subsidising, say, buying new, more efficient blast furnaces EU countries basically just spend few hundred dollars extra of taxpayer money per ton of steel.
(Save the “it’s not really that bad” arguments, I’ve heard all the industry’s gaslighting, but their claims don’t match reality)
What you can do is use and support the climate friendlier alternatives. There are crypto currencies created with that in mimd
I am encouraged to see the transition to PoS and would love to see PoS overtake PoW, just from a bystander-concerned-about-the-environment perspective.
PoW by now is basically PoS with extra steps
But, even for the environment, I can't take people thinking it is a good idea govs using PoW, or standard exchange problems, to ban All crypto-currencies. While creating their own fake digital coin
PoS is also not ideal since it keeps promoting the same rules has the old system. Who has more money will keep having more independent if their producing something useful
So I think we still need something new, and someone smart to come up with it
Something that works for big groups, like a combination of localized PoW plus global PoS with PoT. Proof of trust, like most systems work
I don't agree with the sentiment of the parent either, but:
* Assume the best interpretation of a comment [1].
* Keep it on topic
* Don't attack the person, also not implicitly (e.g. "please educate yourself", don't say that)
Reread: https://news.ycombinator.com/newsguidelines.html
One can claim many things about the parent comment. But it's all directed to the topic at hand.
Cheers!
[1] The best interpretation I can come up with is: yes the energy issue with crypto/bitcoin are an actual problem to solve. Yes, using crypto might be a good use-case in certain situations. While I don't believe the profit claim (there's no source), I can't disprove it either. So it poses an interesting question as to whether that's true.
One example being Algorand which is carbon neutral: https://www.algorand.com/resources/blog/how-algorand-offsets...
Oh and speaking of usage of crypto in China - i wonder how that affects VET / VeChain which is, largely, used by Walmart China to track their wares:
Do you have any resources or studies to describe this more? I have really struggled to find actually nuanced discussions and unbiased sources for this. It’s all at the extremes of it’s either the worst thing ever to not a problem at all.
I’d also be interested in comparisons to energy usage of say servers that run Facebook, Instagram, YouTube, etc.
Interestingly enough, I had received an ad for this on my LinkedIn or Instagram before I ever clicked your link.
Additional studies [3] have shown that 39% of bitcoin miners are using renewables.
The energy consumption argument has led some to investigate the energy consumption of other assets such as gold with some estimating the energy requirements for gold to be 50x that of mining bitcoin [4].
Whenever energy consumption of other assets are pointed out to be higher than bitcoin the debate then shifts to utility; e.g it’s ok if Y consumes X energy because Y provides Z to society.
Some bitcoin miners are finding interesting way to utilize the heat produced by their mining equipment [5]. And some say that bitcoin mining can help reduce the cost of producing new green energy infrastructure since excess power that would’ve been wasted could be used for bitcoin mining to offset costs.
I agree with you that it is tough to find unbiased info on the subject.
- [1] https://www.researchgate.net/publication/328581842_Bitcoin_e...
- [2] https://cbeci.org/
- [3] https://www.jbs.cam.ac.uk/wp-content/uploads/2021/01/2021-cc...
- [4] https://simon.medium.com/bitcoin-and-pollution-the-definitiv...
- [5] https://braiins.com/blog/green-innovation-in-bitcoin-mining-...
You make money when you exit and sell the asset for cash. Have they sold ?
When you can buy food, house/rent and the doctor accepts bitcoins it will become cash.
Probably because heads of state like to print it to solve their short term problems essentially robbing everyone with an inflation tax. I dont call that stable or just. I work and save and expect my currency to hold up and not be abused which is not happening currently.
Edit: HN must be the worst platform in existence to debate. I have about 700 karma and cant comment more than 3 times on this thread. Your rules are not helping discussion or clearing clutter, they're just really annoying. Retrac: no ive hit a limit and cant respond anymore on the whole thread even with only a few comments.
That's funny. The extant fiat currencies haven't failed. So, the only ones that have failed... are the failed ones. And those have failed, 100%, indeed.
Thus, not every currency has failed, although it could be argued that they still exist in a 'shadow' form, thus have not yet existed to the end of the infinite timeline.
Either way every failed currency has indeed failed, thus every currency in the future that fails will also be considered to be a failure, maintaining the 100% record for failure.
I'm curious about what leads you to claim that gold is "a private currency". Can you elaborate on the rationale behind your claim?
Anyway. There's a cute video out there I can't find now of a man trying to use gold in New York to buy something. Anything. The results indicate its use as a currency was questionable. (No one would accept it as payment.)
Also, are you suggesting banning all assets whose volatility crosses a certain threshold?
As for energy consumption, does this also apply to Proof of Stake networks?
That's quite a polite way of saying "facilitate tax evasion".
How exactly do you think you could dethrone Bitcoin, overcoming its gigantic first-mover advantage?
I believe BTC could only come down with the rest of that "economy".
In practice this won't happen, because PoS coins don't deliver the same features (security, decentralization, permissionless) or the market doesn't believe they do.
Also the savings with PoS are not passed to the users of the cryptocurrency, but to the stakers, or big holders of the cryptocurrency. How do we even know, that these people will spend the money they make using some more enviromentally friendly way? Maybe they just buy lambos with the money and fly around with private jets.
Mining is quite small amount of the total transacted amount of BTC daily, and people are willing to pay the cost. If you want to replace Bitcoin with some more enviromentally friendly thing, you have to offer the same capabilities (or better). PoS coins fail to deliver this.
>and people are willing to pay the cost.
No they are not. BTC runs on the block reward not on the fees. Without block reward the average Tx fee would be like 150 USD. (Not accounting for the fact that this would significantly drop the number of Tx which would then raise the cost for the rest of the transaction even higher.)
It's been what, 2 or 3 years since decent PoS designs were introduced to the market? The crypto market is still trying to tell the difference between their right foot and a private key. Give it a few more years and eventually the market will settle convincingly on a design it values the most, be it PoW, PoS, or something else.
In the mean time, it's silly imo to say that the market has decided. The crypto space is still a volatile bloodbath of old chains dying and new competitors rising.
Side-chains dont solve the problem no matter how many and how performant they are. On the main-chain the fees need to eventually cover the cost of running the network i.e. the whole energy, hardware and human labor. Currently this is still mostly paid by the block reward (aka paid by inflation). This pays about a quarter million USD every 10 minutes. It doesn't need much common sense to figure out that if the combined fees of all peoples transaction need to result in a quarter million USD every 10 minute then transaction can not be cheap. Bitcoin is currently running on subsidy by its own block reward that pays about as much as google pays for operation.
The average Tx fee is currently a few dollar but a subsidy of about 140 dollar is added form the block reward. Non-PoW based systems have outperformed bitcoin in terms of transaction for years with average Tx fees of less than a cent. Shouldn't this be enough incentivize? Surely it is for thous who actuality want to use the system. The gamblers and maxis will probably hodl their bag forever but once it loses market relevant it will sharply become insecure as well and the whole thing should collapse. Might take another 10 years, who knows but it eventually has to fail. Its like ICE cars vs. EVs it was always just a matter of time but it felt like it took forever.
>How exactly do you think you could dethrone Bitcoin, overcoming its gigantic first-mover advantage?
If you look at the bigger picture BTC loses market share and there is no sign that this will change. The gains are below average so people who only gamble have an incentive to gamble with something else.
That reads like a tautology—they're called "the rich" because they have wealth, so naturally if you look at the distribution of assets most will be in the hands of the rich. One doesn't accumulate assets purely by being rich, however, as many a lottery winner can attest. Barring the occasional (and usually short-lived) windfall, for the most part those who attain wealth do so because they possess certain habits and preferences related to saving and investing. Even if you reset the distribution of wealth those tendencies would remain and bring about a gradual return to the original economic structure.
This thing also poses a real threat to SWIFT and anyone trying to put together a successor to SWIFT. The US has been weaponising international currency transfers for a while now, and China would be facing problems controlling capital flows if people could just send money internationally without much consequence. There are good, selfish, reasons for why governments would intervene.
Why would any sane person invest in real estate? You have maintenance costs, property taxes, it's not liquid and you can go years with little growth. Not to mention if your area see's hard economic times (i.e. Detroit), the chance of a rebound is slim.
You also ignore the premise being put forth, that Bitcoin as a currency still isn't ideal. You don't think "long term investment" with currency so much as short to medium term. Like, will bread and milk cost 10x as much next week?
"Stop thinking investment and start thinking survival" might be a good way to put it.
Nassim Taleb disagrees: https://youtu.be/dLOeBSaq-Ps
I bet the CoinGeek conference audience were stunned by his keynote talk because Taleb used to be a supporter.
At the same time, hedging against inflation is hard. The things you suggested come with their own risks.
I think a future in which crypto becomes stable due increased adoption is possible, and in that future it will be a good hedge.
Does that logic applies in China? Are real state or equities a protection from volatility on a self proclaimed communist country? What about South America, Lebanon or Turkey?
The incontestable precious and invaluable wisdom of the hacker news poster who potentially lives on US California or some rich western country on a comfortably fat salary.
Every. single. time.
The CCP is a bunch of unambitious individuals. Everything that causes troubles to the CCP means troubles for Xi and the possibility that his "president for life" title might be revoked, creating room for somebody else to ascend.
From a game theory standpoint it is better to be at the helm of a slightly less relevant organization than being a subordinate of an organization plowing ahead at full steam unrivaled.
This is even more true in politics and NGOs where the monetary compensation is very limited and it's all about the status.
The reason why we have inflation and debt is to keep the value of our currencies stable. IE, if people want to use dollars, the US government can print more dollars to satisfy the demand. (And thus keep the value stable.)
Cryptocurrency's volatile value is a result of its inability to "print money" when more people want to use it.
Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce.
I'm not following. By definition, inflation is what happens when the price of a currency is not stable.
> Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce
Agreed. But in countries with high inflation, such as mine, you will lose money if all your wealth is stored as fiat.
Even fairly high inflation levels of say 7% annually can still be quite stable on a daily or monthly basis which is all you really need. As most people spend most of their paycheck every month and savings aren’t limited to the currency in question.
By comparison crypto coins tend to have much higher daily and monthly variations which isn’t a big deal for savings, but in practice it discourages their use for day to day expenses.
Even without knowing what country you are from, I would bet that inflation is because imports and exports imbalances and nothing to do with "printing too much money".
And anyway, if the problem is storing value, why you don't buy gold or dollars, yens or something like that?
Those are the traditional means and are usually banned or strongly regulated, if the states money is at stake.
That kind of stability is more beneficial to the middle class than any negatives that may come with that level of inflation.
[0] https://www.nytimes.com/2020/09/02/business/australia-recess...
And if you're going to break the guidelines and comment on voting anyway, the very least that you could do is also add some value to the discussion, e.g. add some thoughts/elaboration/support for the points made.
Australia has gone 30 years without recession because we're supplying commodities like iron into the most miraculously productive miracle in all of recorded history, aka mainland China. And because we've got one of the highest rates of net migration in the developed world.
On a per capita basis Australia has had recessions, and it is a stretch to say that our inflation target did anything relative to all the other countries that have inflation targets.
However, bitcoin experiences 10-20% drops against the USD on a regular basis. It looks like this announcement has triggered another one. It's not stable, it's just (a) appreciated over time a lot and (b) is doing better against the USD than, say, the Argentine peso.
> By definition, inflation is what happens when the price of a currency is not stable
Inflation is what happens when the price of goods and services in a currency is not stable. It can be triggered without a change in the money supply by underlying shocks to the real economy (e.g. 70s oil shocks)
Bitcoin claims to guarantee money supply stability, but it cannot guarantee price stability.
That's also the case in countries with low inflation. That's why, in the US, wealthy people don't stuff cash in mattresses, or keep most of their wealth in general bank accounts. They buy stocks, bonds, real estate, ect. This is also why, in the US, investment vehicles like 401ks and IRAs are highly encouraged.
A stable currency would have an inflation rate of 0%. Inflation does not cause currency stability, it decreases the value of the currency.
By definition, its value is changing.
Sure, and if the government had centralized control of all prices, it could mandate that. Since it doesn't (even those that assert that power don't have it in practice), what it seeks to do, as far as stability, is try to acheive low short-term price volatility, and as it turns out, experience shows that low-to-moderate inflation helps with that.
The M1 isn't the measure that matters - but it is a fact that large amounts of money are appearing from somewhere and that is probably the most significant factor in the currency losing value. Price controls are an overreaction, there are easier ways to make the currency more stable.
[0] https://tradingeconomics.com/united-states/money-supply-m1
No it doesn't. M1 also includes demand deposit accounts (checking and savings accounts), among other things that aren't physical currency.
The USD is one of the most stable currencies in the world.
Perhaps that is why countries like Japan are changing the definition of crypto and calling it "virtual assets" instead of "virtual currency".
Bailouts are another benefit. Governments can at will dull or even prevent financial contagion thus preventing another Great Depression.
All this has a cost in the form of inflation until the money is reabsorbed of course but it’s better than economic collapse.
The burden of the proof always lies with the person or the entity trying to sell something.
The government failed to sell QE and bailouts to the population, the government further failed to sell inflation target at 2% to the population.
Had government not failed in selling these concepts we'd not have bitcoin.
Government as always can't sell. Otherwise it won't be government.
I recall a recent vote where someone was elected president by a significant majority running on just this platform.
In any event even if this was true an ambitious organization such as the government can't be satisfied with 52% confidence in its financial planning
As a democracy, there's no alternative to the government working with whatever majority it gets.
The government managed to sell the need for the military industrial complex.
The military is the most popular branch of the Federal Governemnt whereas the Fed and Treasury linger at 50-60% depending on who is in the WH.
50-60% is very low, that's the reason why Bitcoin thrives. If that number was 92-95% then Bitcoin would not exist.
Is it possible to have that number at 92-95% ? Maybe, maybe not...in any event the answer is not attacking bitcoin because even if Bitcoin is destroyed that remaining 50% void will be filled pretty quickly by something else.
In fact the the US government actually made money from the bailout.
> In total, U.S. government economic bailouts related to the global financial crisis had federal outflows (expenditures, loans, and investments) of $633.6 billion and inflows (funds returned to the Treasury as interest, dividends, fees, or stock warrant repurchases) of $754.8 billion, for a net profit of $121 billion.
- https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#...
If you are an organization with 6000 nukes, 22T GDP, largest navy and airforce you don't get to cry about "misinformation".
People don't like QE and bailouts. Period. The burden of the proof is always on the person/organization trying to sell something. Always. For sure the public didn't conceive QE or bailouts and didn't try to sell it to the government.
Bitcoin would not exist if QE and bailouts were marketed by master salesmen such as Steve Jobs, Dana White, Don King or David Geffen
We as investors should operate with what is perceived by the population, not textbooks.
Perceptions move the market, and in the case of Bitcoin perception created a market. From 0 to 2 trillions in 10 years.
It’s not like the banks didn’t suffer during 2008. That bailout money was mostly returned with interest. All the government did was extend a lifeline.
Every watt of renewable power generated to power a crypto miner, is a watt not being used to reduce the use of non-renewables in the wider energy grid.
I don’t care if your crypto gear is hooked up to a dedicated hydro plant, I care that the hydroplant is not connected to the wider grid and shutting down gas fired power stations.
Yes, that is true...
> which he would rather was not invested in renewable energy
...no, he would have used the generated electricity for something more useful, NOT make it so that it isn't generated in the first place.
https://arstechnica.com/tech-policy/2021/09/old-coal-plant-i...
Its not unique either. There’s a company in the U.K. that bought an old coal plant, to convert to gas operators, to provide power solely for a crypto mining operation.
Simple fact of the matter is that it currently cheaper and easier for miners to use fossil fuels, then build renewables. Which is exactly what they’re doing.
No, he's not.
> meanwhile his plan crashes the price of renewable energy endangering those industries and shrinking the market.. allowing established fossil fuel industries a bigger share
It seems that you have completely missed the past four decades of renewable energy decreasing in price by a factor of 100x. The result of this decrease was not "endangering those industries", but rather making them viable in the first place and broadening the market massively. As per Jevons, the energy market doesn't shrink when prices get lower.
I'm puzzled as to how someone could make such a glaringly obvious mistake.
And it seems you have completely missed the fact that investment from crypto miners helped to bring this efficiency saving about, if there wasn't so much demand, there would be nothing to invest in R&D and infrastructure that inevitably lower prices.
Crypto, or specifically PoW acts like a guarantee of sale under a certain price per KwH. It used to be necessary for governments to guarantee power prices, and offer subsidies to encourage investment in their countries infrastructure. PoW in part replaces this necessity and encourages companies to invest in renewable, efficient, power production.
Btw. we have truck driver and plumber shortages.
Bitcoin makes use of energy that would otherwise be unused.
All that means is that in almost all scenarios bitcoin mining will be directly causing an increase usage of non-renewable energy. There are of course certain times and places where this doesn’t hold true and there’s a genuine surplus of renewable power that can’t be stored. But that’s an exception not the rule. Try and tell me with a straight face that the majority of power consumed by crypto is surplus renewable energy.
Only from the view of the universe, not from the view of humans. It cost less energy to drill for oil than the energy you get out of the gasoline. It takes less energy to create a solar panel than what you can get out of it. It takes less energy to labor at the factory for an hour than the energy you get from the 150KwH of power you can buy for your house from that hour of motion you performed at the factory.
If I use some electricity to run PoW on an electronic litecoin transaction from me to my friend in Kenya, that's a hell of a lot lower energy than building and operating a Western Union in Kenya isn't it?
On an aggregated pre transaction basis we know this isn’t true. Crypto is not more energy efficient than existing financial infrastructure. Additionally you’re comparing a small part of a financial transactions (I.e. and database update) to a complete end-to-end transaction, including turning those digital funds into spendable cash.
Unless you friend in Kenya is also capable of spending that crypto, without turning it into fiat, then example is meaningless, because your ignoring all the infrastructure need to do that fiat conversion.
Additionally Kenya has digital banking infrastructure. Send a SEPA payment instead, no need to Western Union.
Crypto can be spendable cash. You can buy a coffee or a bar of gold with it, even bullets. Sounds like it can be used as a currency to me. It only takes a willing counterparty.
> Crypto is not more energy efficient than existing financial infrastructure.
That depends on the place and circumstance. I concede that Kenya was a poor example and I should have used someplace like Central African Republic instead.
>Additionally Kenya has digital banking infrastructure. Send a SEPA payment instead, no need to Western Union.
Assuming you are one of the one third of Kenyans who have a bank account. And assuming the one sending the money has a bank account. Both of which involve documentation and KYC, something not necessary in most crypto transactions.
>because your ignoring all the infrastructure need to do that fiat conversion
Not really, crypto to fiat can be done informally. There's several people in my city who buy and sell it and all they need is a cellphone and local currency.
It's only from the perspective of someone that thinks like a loser, always trying to find something wrong, that you can find zero uses where using crypto is more energy efficient than other financial options. And not all cryptos use the same energy or transaction cost as others.
For an example of transaction efficiency, I can buy a bar of gold from some established bullion vendors in litecoin much cheaper than with a visa card due to lower transaction risks for the merchant and lower transaction fees. If you can't wait multiple days for an ACH transaction and have to buy precious metals online, crypto is actually the cheapest way in the US.
All true, but the same also applies to chickens, screwdrivers, oranges, dogs, cats etc. Just because you can barter with something doesn’t make it a currency.
Currencies are better identified by their fungibility (which crypto has), their value stability (which crypto currently doesn’t), and their wide acceptance for use in everyday transaction (also not true of crypto in the vast majority of the world).
> It's only from the perspective of someone that thinks like a loser, always trying to find something wrong, that you can find zero uses where using crypto is more energy efficient than other financial options. And not all cryptos use the same energy or transaction cost as others.
I’ll remind you of the guidelines, as you’ve clearly forgotten them.
> Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.
Ad hominem attacks undermine your arguments and suggest that you don’t actually have very strong argument, instead you’re forced to attack the character of the person your discussing with, due to an inability to attack their argument. Try harder.
I used be a fan of crypto, did plenty of trading, bought plenty of pizza etc with it. When to meetups, evangelised crypto to friends and family. Back then it looked realistic that crypto could be a genuine currency, and the concept of DAG was incredibly.
Unfortunately crypto has descended into little more than get rich quick schemes that take advantage of naïve investors, or produce profit by externalising all of the negative consequences of crypto mining (such as CO2 emissions). Forcing the rest of us to bear that long term cost, for a grifters short term profit.
I admit there are coins out there that potential address these issues, and still possibly have a future as a genuinely useful currency. One not manipulated by a small number of extremely large coin holders. But unfortunately that doesn’t change the damage caused by other coins.
> For an example of transaction efficiency, I can buy a bar of gold from some established bullion vendors in litecoin much cheaper than with a visa card due to lower transaction risks for the merchant and lower transaction fees. If you can't wait multiple days for an ACH transaction and have to buy precious metals online, crypto is actually the cheapest way in the US.
This is just an example of how slow and backwards the US financial system is. Most other countries have far quicker and cheaper payment rails. Here in the U.K. I can send an instant Faster Payment for free from my bank account, and the money moves faster than the app UI (I get a push notification from the receiving bank, before the UI in my banks app has had time to display the confirmation). The whole of Europe has similar payment systems that also work cross border.
The money moves so fast that when trading crypto the slowest part of buying or selling was always the confirmations. The fiat part was instant.
I did attack your arguments, including many other points and I never called you a loser. Quit being so defensive. I said those who continually look for ways to make something not work, rather than finding the ways they do, think like losers. And I back that 100%! The only of the two of us who had made an ad hominem against the other is you, by saying I have an "inability to attack their (your) argument." Thanks hypocrite!
>Unfortunately crypto has descended into little more than get rich quick schemes that take advantage of naïve investors, or produce profit by externalising all of the negative consequences of crypto mining (such as CO2 emissions). Forcing the rest of us to bear that long term cost, for a grifters short term profit.
I'm not a fan of stable coins, but how many people you reckon are buying DAI or USDT with the idea of striking it rich? I hear this sad sad false diatribe over and over, completely ignoring that crypto-currencies are currencies and not investment, with people getting mad that crypto is not an investment that is going to provide returns for naive "investors." And then they go on to attack crypto for not living up to being an investment!
>I used be a fan of crypto, did plenty of trading, bought plenty of pizza etc with it. When to meetups, evangelised crypto to friends and family. Back then it looked realistic that crypto could be a genuine currency, and the concept of DAG was incredibly.
So you were a dogmatist for, and then apparently now a dogmatist against. Try being a neutral pragmatist that doesn't believe crypto is an investment utility but rather one possible financial engine that allows electronic transactions without KYC or centralized authority.
Re-read my comment, that’s not what I said. It’s difficult to have a discussion with someone who selectively quotes text, and deliberately ignores the wider context.
> I'm not a fan of stable coins, but how many people you reckon are buying DAI or USDT with the idea of striking it rich?
One of the original stated goals of USDT was to provide an on-ramp to other crypto, and do an end run around KYC and AML laws. People don’t buy these coins to get rich, they buy them to either purchase other coins, or to temporarily insulate themselves from crypto volatility, without having to resort to fiat. Additionally the fundamentals to USDT have been called in to question may times, with plenty of evidence that whole things scam and someone’s stolen the backing fiat.
> Try being a neutral pragmatist that doesn't believe crypto is an investment utility but rather one possible financial engine that allows electronic transactions without KYC or centralized authority.
I’m not sure how you’ve ended up deciding that you think I treat crypto as an investment, not a currency, after I’ve explicitly said the opposite.
As I said I believed that crypto could be a very interesting and useful currency, unfortunately it’s not panned out that way. Saying we should treat crypto like a currency when it doesn’t behave like one, and when most people don’t treat it like one, is hardly pragmatic. A more pragmatic approach is to observe how others are using it, observe how it behaves, and treat it like that. If it looks like an value gaining asset, and people treat it like a value gaining asset, then it’s a value gaining asset. Not a currency.
To cover your eyes and ignore the reality of the situation is just foolish. It certainly does nothing to advance the cause of crypto being a currency.
>If it looks like an value gaining asset, and people treat it like a value gaining asset, then it’s a value gaining asset. Not a currency.
>I’m not sure how you’ve ended up deciding that you think I treat crypto as an investment, not a currency, after I’ve explicitly said the opposite.
Again you go on contradicting yourself whenever you find it convenient. You are possibly the most disingenuous, contradictory, hypocritical person I've met on HN. Fine to waste 'watts' on social media news sites but not to send a payment to your unbanked cousin in El Salvador. Have fun thinking like a person who only looks for ways to fail, rather than ways to succeed.
Not a biblical person myself, but I'm going to take a note out of the bible on this one : " Answer not a fool according to his folly, lest you be like him yourself."
Have a good one.
One comment on HN, probably around 100mWh.
One is not like the other. But please continue to pretend otherwise.
> Again you go on contradicting yourself whenever you find it convenient.
Please be explicit and show we’re I’ve contradicted myself. I don’t believe I have, but happy to be proven otherwise.
> Not a biblical person myself, but I'm going to take a note out of the bible on this one : " Answer not a fool according to his folly, lest you be like him yourself."
You make a good point. Why have I bothered to talk to someone who is so clearly disconnected from reality.
For keeping track of a ledger that one dude in a basement with an Excel spreadsheet could keep track of, more or less.
That's completely irrelevant for the correlation. Renewables are theta-bound by fossil fuels, and fossil fuels are theta-bound by renewables. Only at zero emissions for a source this would stop being true. This is first semester math.
There are plenty of crypto operations that have their own, renewable power sources that operate in a closed zero emission fashion.
If you mean operational emissions, then this is a trivial statement. If you mean total emissions, then this is a wrong statement, unless these people manufactured their own generators using zero emissions in the process.
If base load were to drop due to crypto miners being turned off, the energy with highest marginal cost would be turned off, which means fossil fuels, not renewables.
Energy is fungible.
> If we were serious about fixing climate change we'd stop all air traffic tomorrow.
The fashion industry alone has more climate impact than air traffic and maritime traffic together. Aviation contributes around 1% of air pollution (though 5% of greenhouse effect, due to high altitudes).
But all of those (transport, fashion) provide utility. BTC usurps nearly 1% of world electricity without providing commensurate discernible utility.
I for one think not having to pay 20% for a remmitance for someone who is trying to help their famiy in another country has huge utility, maybe others disagree.
Network shares the load but winner takes it all, i thought.
You can try to go it alone but your chances of finding the block reward are incomprehensibly low.
No, for protecting against the untrustworthiness of that one guy in his basement. You may disagree with the value of that function, but that's what cryptocurrency provides.
Also a huge portion of the energy used by bitcoin would otherwise be wasted.
Also your figures are egregiously off and taken from flawed estimates
https://nydig.com/wp-content/uploads/2021/09/NYDIG-Bitcoin-N...
Sure, measure energy use per amount of money transferred. That's not going to be very nice either.
> Also a huge portion of the energy used by bitcoin would otherwise be wasted.
Oh, come on. Now you're just trolling. It would have been used for something else that most likely wouldn't be waste, like in factories or in hospitals and such.
I am well aware of the difference between average and marginal energy use. This would be particularly relevant if the blocks were not full, but mined anyway, so that any additional transaction could've been included "for free". However, more often than not, that's not the case, but the mempool is non-empty, and the constraint (of max transactions per block) is binding. [1]
Thus, one can not trivially argue that the marginal cost of a transaction is zero.
Next, yes, my figures (165 TWh/a = 19 GW) from Digiconomist [2]) are at the upper end of the estimates, but other figures (eg Cambridge Bitcoin Electricity Consumption Index) estimate 100 TWh/a, with reasonable bounds of 36 to 376 TWh/a, so 12 to 28 GW, so are largely in alignment, modulo a factor of 2. (Note that your source is also within a factor of 3 of those estimates, pegging BTC at 0.2% of global electricity consumption.)
At any rate, the average cost is just preposterous, even if off by a factor of 3.
[1] see for example https://jochen-hoenicke.de/queue/#BTC,1w,count
However, as an investment, as of right now, there is only a span of a few months where if you bought Bitcoin you would not be in the green right now.
Did people find a useful reason to buy Bitcoin already? Something that creates value, instead of hopping to sell higher for the next sucker?
But it was just a matter of thinking a bit about it. Everybody knows what Bitcoin is useful for: cyber-extortion and evading capital restrictions. There are even good reasons for practicing the last one... With that in mind, BTC still behaves like a bubble, but proving it's actually one depends on a quite laborious process of comparing the volumes and estimating how they will evolve.
I find it amusing how casually you just made up a statistic and used it as justification to ban something. Here's an actual statistic: 100% of people who held Bitcoin for longer than 4 years are up on their investment.
edit: Lots of downvotes for an easily verifiable fact. Anyone can look at the BTC chart and see that there is no 4 year span where the price ends up lower than it was at the start.
Just imagine everybody in the world buys as much Bitcoin as they can afford, immediately.
How much richer are we all, in aggregate, at the end of the day?
Millions can be wrong for decades. If history teaches anything is has to be this.
As to why >100% transparency is a desirable property, see recent regime changes and imagine how easy it would be to persecute the friends of the old regime by simply looking at their purchase history.
Edit:
There are a lot of different versions of the idea though. A lot of variety exists in crypto now, and very little is deterministic. I don't want to rule out the positive possibilities, and outlawing is broad brush. The PCB grunted at crypto here. We can do
That said, the variety of possibilities also creates danger. Underregulated stable coins, for example, get very sketchy once you reach a certain size. If they keep growing, start embellished with dolaralized interest payments and such.... you now have a rogue banking system issuing its own US dollars. Good luck with that. The scale of fraud, and treacherously borderline fraud can be epic. I don't think we should downplay these.
OTOH, this is true of every part of the financial sector. Lets not pretend the current way the financial sector is structured isn't riddled with the kinds of problems crypto poses.
A country with some clever CB people, even a small one, should be bold and bring crypto into the pax. There's a lot you can do with a designed-4-a-purpose currency, and crypto is a very viable way to do many things. Bitcoin's origins, and much of crypto's present, is secrecy oriented. But, it's actually more natural to design a cryptocurrency for transparency. That's useful in a lot of circumstances.
Take time to understand wtf is going on and regulate, ban or encourage specific things for specific reasons. There's a lot to be gained, not just a lot to be lost. A properly regulated stable coin might be a great idea.
Keynes has made a comeback during the pandemic, and people are relearning war era ideas about controlling inflation. In that context and considering 2021's low interest rates, national savings bonds will probably soon be considered in various places. You don't need crypto to do this, but it does give you more flexibility in how you do it.
I think this isn't emphasized enough. With existing fiat money I have some degree of democratic control over monetary policy. With BTC, critical monetary policy was set by one person and if that monetary policy ever changes it will be decided by a combination of engineers and mining conglomerates.
Given how critical these policies are and how ideologically focused many of the non-speculators are, I am worried about growing systems with disastrous policy consequences.
BTC is at the point where if you don't have time or want to research what it really is, and only want to believe talking heads and authority figures, no one is going to take the time to explain it to you.
Those days are over, people have moved on and are using it for utility, without permission, how they see fit, whether as a currency or store of value.
Nothing can prevent a BTC transfer to anyone, anywhere, and at anytime. That is why China 'banned' it.
I am so tired of people insisting that I simply don't know anything.
The mining curve is monetary policy. For example, a 100% premined coin has very different properties than a coin with a fixed mining rate and no upper bound. The upper bound on the number of bitcoins is consistently pointed at by proponents as a means to prevent inflation. I can imagine no other phrase for this than "monetary policy".
The mining curve is reasonably described as monetary policy, seeing as it has a major impact on the distribution of coins and on inflation, which many crypto advocates worry about very deeply.
The mining curve was defined by Satoshi based on their original implementation. If there was to be a change in the mining curve we would need (1) a new version of the btc codebase that does mining rewards differently and (2) for the miners to swap to this fork. There is no mechanism for me, as a single person, to have a voice in this process except through contributing hash power to my preference. This is an amount of voting power associated with my wealth. That is antidemocratic.
Or do you want to just keep telling my that I am mysteriously ignorant over and over? That'll certainly endear people to the community.
Bitcoin and cryptocurrency es is a bunch of tech bros assuming they can run or set up a better monetary system than everyone else...
...without realizing that transaction media are an extremely powerful political and diplomatic tool, integral to maintaining national security, and will get stomped relatively quickly given enough time for governments to wrap their head around it.
Why is that interesting? Because popular sentiment (in the comments) on HN is very frequently wrong. HN is a tremendous resource for contrarian purposes.
For those who genuinely want decentralised currency, there's so many more efficient options
I don't fly in airplanes but I use crypto. So why should you get to choose to do some activities that blast CO2 directly into the atmosphere but I can't? It is a disgusting, authoritarian ideology you have.
Besides that crypto can run on solar. Airplanes cannot. So I propose we ban airplanes. /s
The reality is you just don't like the politics behind the crypto movement. The climate is just a convenient bludgeon for you.
Isn't this whataboutism? A is not so bad because you know, B does it too.
In fact some countries, e.g. Kosovo and Montenegro, in the Balkans, use the euro as a de facto domestic currency since 2002, even though they have no agreements with the EU.
Crypto *is* volatile and wasteful compared to any of those.
Behind every dollar is an unspoken promise that the US Marines will evacuate you middle of the night anywhere in the world if shit hits the fan.
Which has been recently proven to be quite an assumption.
Like what, NFTs for farts? Near as I can tell, the other main use cases for crypto - smart contracts, supply chain provenance tracking, and securities settlement processing really haven't panned out. Others have pointed out why it's not working as a currency. Literally all we have left is a vehicle for speculation.
I don't clearly see what you would actually propose banning. My opinion is it's technology, an idea, and that shouldn't be banned.
Just because one crypto currency is like that doesn't mean there cannot be another decentralized crypto currency that is better.
Just because your or mine imagination does not reach there doesn't mean there can't be somebody that can figure it out.
Why wouldn't it? Strong central government. Clear economic and social goals with the ends justifying whatever unethical means. A complacent middle and upper class satiated by enough new wealth to make them fat(ter than they used to be) and happy.
Why won't they be the next world power for the foreseeable future? Is there an anti-party faction in China that's larger and more powerful than I see in US media?
Or is this just wishful thinking from the west?
I think it’s reasonable to say the CCP will keep their grip on power for as long as they can continue delivering wealth to the middle class, and lifting those in poverty into the middle class. What’s not clear is how long the CCP can continue delivering that wealth.
The ongoing crisis with Everglade is showing that the CCP power and ability to generate wealth is not unlimited. I doubt it’s the beginning of the end, but it does shine a light on the long term structural flaws of their strategy. It’ll be interesting to see how the CCP deals with this over the next 10 to 20 years, maybe they’ll find a new strategy to maintain power, or maybe they’ll start a slow and gentle transition into democracy, allowing them to placate the middle class who won’t be seeing outsized wealth growth anymore.
Not saying it won’t happen, but I don’t think it’s a clear cut as you make it, and I think the CCP are smart enough to know that. They already do an astonishingly good job of treading the line between an authoritarian government that exploits it population for wealth, and one that empowers its populations for productivity and even greater wealth.
You can crush a thousand peasant farmers and replace them easily, you can't do that with the middle class without heavily setting back your economy and therefore being less competitive on the world stage.
The CCP will need to decide whether they want to release control and let their population produce value, or keep control and be unable to compete as a world power.
That's my take.
When things go poorly there is always an internal scapegoat, and knowing that no matter how low your situation is it’s (a) not your fault and (b) there is someone who has it worse is a great way to keep social cohesion through troublesome times. And if all else fails, one can find an external party and invade them as both a distraction and a way to deliver spoils to your loyalists.
I’d bet that things will get worse for ethnic and religious minorities in China during a downturn in the economy and if the economy continues to slowly slide for a decade then the neighbors of China like the Philippines will see more of their territory taken away.
They will not start demanding more freedom (only a small minority will do that). They will become increasingly agitated and demand the kind of economic progress they had before, which the CCP won't be able to deliver (the easy, fast, low-debt growth has largely been saturated).
Specifically the CCP | people-of-China socioeconomic pact is based on the country continuing to deliver massive economic gains to the bulk of the population.
Xi has begun a new cultural revolution (just ahead of the curve) because he recognizes it's going to be required to stomp down on the population in order for the CCP to retain its position, as the easy economic gains are well over. The leadership of the CCP recognizes what's inevitable about their context: they either had to let go of power increasingly, or they have to become more totalitarian, as the growth pact begins to falter. What waits for China the next 30 years, is significant demographic erosion, slow growth and epic persistent debt problems (which doesn't mean they aren't going to be a superpower, they are).
The only answer might be adding other countries into our representative government system (not colonialism, but peacefully and equitably adding other willing states that want to benefit from stable government). Seems people are already voting to join with their feet. Embrace it.
What is this? "Everglade" is a common enough word that I can't find anything besides mentions of the wetlands in Florida.
GP needs to learn to spell
Evergrande is an indebted chinese property developer which is the current ticking financial time bomb this week in China.
You mean Evergrande (3333.HK)
It's state propaganda. A (clever and very well designed) mix of known government actors and easily influenced third parties that work to push a specific narrative online. The thundering irony is that the west reports on such practices extensively when it comes to China, but the far more obvious actor (visible in the west) is your own government.
What do you mean by completely control covid? What intended result have they managed to arrive at?
It is not bigotry to stand up to authoritarianism and human rights abuses. You wield that term bigot to downplay the vast and monstrous human rights abuses occurring in Xinjiang. Its absolutely nothing to do with race or nationality. There is nothing intrinsic that would permit such actions to be attributed to this. It is not about bigotry. Connecting the two is all part of the metagame in pushing a state propaganda. Make your accuser seem less credible so you never have to address the actual substance of the complaint.
The reported incidents include Forced Labor and Sexual Abuse, Organ Harvesting and Genocide. On mass. This happened. This is happening. There is plenty of neutral international sources on this. Saying it doesn't exist is absurd. There is clear evidence of this!
These are not lies told by the western media, as the Chinese media claims. These are happening, they have been reported by people that have escaped, they have been raised to the UN. Most of the world has denounced this...
Because you believe you are righteous does not mean you can spread false information you can easily question with your brain, the same as you believe you are righteous does not mean you can go into other country for WMD.
2015: https://archive.is/Higoz
2017: https://www.reuters.com/article/us-bitcoin-china-idUSKCN1BJ1...
2018: https://www.businessinsider.com/china-eliminates-all-cryptoc...
2021: https://archive.is/s7nbw
"China Has Banned Bitcoin 13 Times Since 2012":
https://finance.yahoo.com/news/china-great-bitcoin-mining-mi...
What makes you think that? You do realise that they could easily outlaw 1) miners, 2) exchanges that convert to fiat, and 3) people privately exchanging to fiat, and (domestically) enforce that reasonably well, too.
And sure, there could still be an underground market - you can get still get weed and cocaine in China or Singapore, but I wouldn't recommend participating in it.
"big thieves hate little thieves"
China is trying to prop up domestic stocks and investment. Crypto blunts that effort. Moreover, following or reclaiming the money is difficult, slow, and sometimes impossible. Very bad.
Crypto is probably something that the NSA can headshot and easily kill your cottage industry. Also bad, but to a much lesser degree than the capital flight.
Not saying your wrong, but I'm curious.
A digital currency does not require a distributed ledger, nor does it require a validator model as it is not distributed or trustless to begin with as it's inherently centralized and backed by a government and existing monetary infrastructure usually.
In other words, digital money is nothing like cryptocurrencies.
Maybe if they used an authenticated append-only list to store the state or state changes, and published a summary of the head periodically in a way such that users could at least validate that the state changes were valid, or at least not violate certain rules, that might count.
If cryptography isn’t used in order to make something verifiable, it isn’t really a cryptocurrency, I’d say.
Digital money is the digital equivalent to cash. It's money that is emitted by the central bank in digital form that you really own, not a debt that a bank somehow owes you.
Cryptocurrency or not, central bank application or other, it's all implementation detail. The important definition is : it's money you can own but that you can't touch.
In a blockchain system, you can generate transaction off-chain(as in, no need for internet access), then you signed it with your private key, and send to a node in the chain. The nodes can verifiy/confim using your public key. The wallet address is a result of hashing your public key.
Compare with a digital currency, you most likely need an account and some sort of credential that managed by the company which issues the currency.
I wouldn't be surprised if that was the case, but it was just conversation over a beer. Someone else to confirm.
/s
Bsckground There is a severe shortage of gaming GPUs Geforce 30xx. Possibly semi conductor shortage / crypto mining.
I can't read the text and be certain whether it means that transactions in it are prohibited, or that it simply does not have the same status as legal tender, as in currency that companies are required to accept.
5.5%???? for bitcoin it means nothing.
You think the CCP and central bank of China are just putting out statements to help a few foreign traders win on leveraged trades? The central planners of the economy that if fast becoming the largest in the world care a ton about some random traders in other countries? LMAO.
If I was the CCP I'd try to leverage BTC (and others) as a weapon against the dominance of USD.
Instead it looks like they just want to implement their own variant that gives them total control and transparency of in-country transactions. At a minimum they could do both (ban BTC use internally, but still allow mining in the country). I must be missing something.
Their authoritarian currency does allow for some interesting things like expiring credits or instant distribution of benefits, refunds, stimulus to the public (with constraints baked in) - but the obvious negatives are pretty extreme especially with the CCP's track record.
I'm sick and tired of everything being a narrative manipulation op.
Crypto is one of several things which are going to carry things through to the new order. (Avatar embodiment and pseudonymous identity is another, and DAOs taking the place of traditional startups is another.) A lot of people here are going to be left confused and angry, but that's the nature of change: the innovators of the past boil slowly into being stuck in their ways and unable to adapt.
Even pure tech work that just happens to have been done by Bitcoin related folks tends to get downvoted and flagged, e.g.