China Bans Cryptocurrency Transactions

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Kbg
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China Bans Cryptocurrency Transactions

Post by Kbg » Fri Sep 24, 2021 10:38 am

This is going to get interesting. I still maintain this is the main problem with cryptos…while they are “independent” of government control, upon closer inspection this assertion doesn’t pass muster. Now we have some proof. Meanwhile large financial interests in the US are lobbying like crazy to make it more widely accepted/less regulated…any value is completely reliant upon government acceptance.

Anyway, still not anti, but crypto of any kind I don’t believe is a good long term hold.
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Re: China Bans Cryptocurrency Transactions

Post by Kriegsspiel » Fri Sep 24, 2021 4:02 pm

You mean they can't transact with it, as in buy goods/services or transact with it on a regulated market?

As long as they can still mine it/buy it privately, I'd think the Chinese would be very motivated to do that. It seems like a great way for them to get capital out of China.
And as for him who lacks the courage to defend even his own soul: Let him not brag of his progressive views, boast of his status as an academician or a recognized artist, a distinguished citizen or general. Let him say to himself plainly: I am cattle, I am a coward, I seek only warmth and to eat my fill.
Solzhenitsyn, Live Not By Lies
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Fri Sep 24, 2021 11:41 pm

Can't mine either...

The article hits on a good point, enforcement and for how long?

https://www.cbc.ca/news/business/china- ... -1.6188011
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Re: China Bans Cryptocurrency Transactions

Post by glennds » Sat Sep 25, 2021 12:25 pm

Kbg wrote:
Fri Sep 24, 2021 11:41 pm
Can't mine either...

The article hits on a good point, enforcement and for how long?

https://www.cbc.ca/news/business/china- ... -1.6188011
Interesting article.
The loyalist crypto and BTC fans say China has been throwing cold water on crypto since 2013 and it hasn't been enough to stop it.
As the article points out, the counter argument says this time is different.
But then the loyalists say the drop in crypto in light of this has been incremental and not precipitous, demonstrating its resilience and maturity beyond SIDS.
And the counter argument says this is a harbinger of action to come from other large economies.
Who can say where it will go?

But as to the idea of people in China transacting crypto underground and privately, I wouldn't be so sure of that. I haven't actually lived in China for any meaningful length of time, but from what I could tell when I was there, nobody had an appetite for antagonizing their government in even the slightest way.

I totally agree with you Kbg that government regulation is a major risk to crypto.
But when I've pointed this out to friends that I might call fervent fans, they tend to get surprisingly upset and one pointed me to Article II of the Constitution and then folded his arms in triumph like Daniel LaRusso after the crane kick.
The thing is, it doesn't have to be an outright ban. The government can create inhospitable market conditions for crypto in a myriad of creative ways. (I'm not saying they will, just that it is a risk that ought to be included in the calculus).

BTW, glad to see you're mended from the bout of Covid
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Re: China Bans Cryptocurrency Transactions

Post by vincent_c » Sat Sep 25, 2021 10:31 pm

I think it depends on your time preference as well as how you view risk. Some people just associate losing money with riskiness. Personally, I don’t shy away from risk as long as I can identify it and put a price on it. A problem would be if something happened that took the price of an asset outside the range of expectations.

Government regulation is well within what is to be expected but to what extent. I expect heavy regulation that can have severe consequences to price, but I do not expect that the price will fall to a point where the asset can be ignored and I also expect that it is already or will eventually be confirmed to be a long term store of value.
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Sun Sep 26, 2021 2:46 pm

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Re: China Bans Cryptocurrency Transactions

Post by pp4me » Mon Sep 27, 2021 12:46 pm

Private ownership of gold was once banned in the U.S.A. so I guess Crypto is just following the same pattern. Government printing presses don't like competition.

If they got really serious about it like they did with gold how hard would it be to shut down Crypto altogether? Much easier than gold, it seems to me. Maybe I don't really understand it but I'm pretty sure you can't bury it in the backyard. Could you even get to it if the power went out?
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Re: China Bans Cryptocurrency Transactions

Post by vincent_c » Mon Sep 27, 2021 2:11 pm

pp4me wrote:
Mon Sep 27, 2021 12:46 pm
Private ownership of gold was once banned in the U.S.A. so I guess Crypto is just following the same pattern. Government printing presses don't like competition.

If they got really serious about it like they did with gold how hard would it be to shut down Crypto altogether? Much easier than gold, it seems to me. Maybe I don't really understand it but I'm pretty sure you can't bury it in the backyard. Could you even get to it if the power went out?
I think the difficulty would be in destroying the intellectual capital of thousands of young engineers and entrepreneurs in the industry. I think it is the innovation part that cannot be destroyed so what is the use of destroying Bitcoin if Ethereum takes its place. If you crack down on smart contracts and the entire blockchain industry then I think there will be so much push back at this point that it's not something I can imagine possible or desirable.
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Re: China Bans Cryptocurrency Transactions

Post by Jack Jones » Tue Sep 28, 2021 10:19 am

glennds wrote:
Sat Sep 25, 2021 12:25 pm
I totally agree with you Kbg that government regulation is a major risk to crypto.
Is government regulation a major risk to gold? Why is it different?
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Tue Sep 28, 2021 2:44 pm

Jack Jones wrote:
Tue Sep 28, 2021 10:19 am
glennds wrote:
Sat Sep 25, 2021 12:25 pm
I totally agree with you Kbg that government regulation is a major risk to crypto.
Is government regulation a major risk to gold? Why is it different?
Sometimes yes and electronic vs. physical which has implications in many directions.
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Re: China Bans Cryptocurrency Transactions

Post by boglerdude » Wed Sep 29, 2021 3:44 am

> Is government regulation a major risk to gold? Why is it different?

People use gold and bitcoin as an asset, not a currency. A successful crypto-currency might require inflation
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Re: China Bans Cryptocurrency Transactions

Post by gaddyslapper007 » Thu Sep 30, 2021 3:05 pm

not sure why this is all being rehashed....its simple

1. Value lives within peoples imagination. You only accept USD because MOST other people will accept it as having value. (another way of saying this.....Governments (a collective group of people) force you to pay taxes in said currency / money and if you don't you go to jail. Since you likely don't want to go to jail, the citizen(s) adopt the government money as having value. (because it keeps you free)

2. the US government has done a superb job (war, worldwide welfare to other countries, etc) to hook the rest of the world on USD therefore making it more widely accepted by people. (thus less volatile in value as acceptance grows.)

Enter Bitcoin (a voluntary currency / money / digital real-estate, free speech text, digital beanie baby, energy value storage, etc...).....where individuals can voluntary participate in (or not....with no-gun to head to pay taxes in by collective people)........


Sure governments will see it as threat......the question is, will YOU politely Vote for freedom (support BTC with your dollars) or "opt-out" and vote with your dollars to support more FED / Government. (its really that simple......checking a box every 4 years for an R or D does nothing)


And yes.....Bitcoin won. (its over...."Crypto" lost)
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Fri Oct 01, 2021 6:17 pm

No because I’m a qualified free market capitalist and you are proselytizing a belief system with political bias. This is a great way to have poor returns. I want the best returns I can get with the limited smarts I have.

I support a stable currency that is widely accepted even if forced by law. BTC is a horrid currency.
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Re: China Bans Cryptocurrency Transactions

Post by gaddyslapper007 » Fri Oct 01, 2021 8:48 pm

HFSP
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Sat Oct 02, 2021 12:31 am

Oops, too late for that thank you very much.

To be clear however, I’ve consistently stated BTC has been and at least for now is a stellar speculation. One of the best. I just happen to think it is a joke as a currency substitute and is not likely to end well as a longer term investment. I could be wrong, wouldn’t be the first time and surely not the last.
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Re: China Bans Cryptocurrency Transactions

Post by bitcoininthevp » Wed Oct 06, 2021 11:42 am

Funny thing here is that Bitcoin only has value to the degree that governments mismanage the money.

If governments behaved, Bitcoin would have little or no value.

Why? (sorry for being repetitive)

Because Bitcoin is a censorship-resistant, inflation-resistant, seizure-resistant, pseudonymous digital asset.

If there was no censorship, inflation, confiscation, or surveillance, Bitcoin wouldn't have a value proposition.

China, the most misbehaving of the bunch, bans Bitcoin? Bitcoin goes up 20% in value. Of course other things are going on, maybe unrelated to China. But does make you think...
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Re: China Bans Cryptocurrency Transactions

Post by bitcoininthevp » Wed Oct 06, 2021 11:45 am

Kbg wrote:
Sat Oct 02, 2021 12:31 am
Oops, too late for that thank you very much.

To be clear however, I’ve consistently stated BTC has been and at least for now is a stellar speculation. One of the best. I just happen to think it is a joke as a currency substitute and is not likely to end well as a longer term investment. I could be wrong, wouldn’t be the first time and surely not the last.
Bitcoin is a horrible unit of account and wildly volatile.

As you state it is a speculation. The speculation (bet) is that Bitcoin will eventually be good money (and stable unit of account). Every time someone buys BTC to "hodl" it, not only are they betting on that outcome but they are adding to the liquidity, increasing the price, and dampening the volatility. A bit of a self fulfilling prophecy.
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Re: China Bans Cryptocurrency Transactions

Post by vincent_c » Wed Oct 06, 2021 2:18 pm

bitcoininthevp wrote:
Wed Oct 06, 2021 11:45 am
Kbg wrote:
Sat Oct 02, 2021 12:31 am
Oops, too late for that thank you very much.

To be clear however, I’ve consistently stated BTC has been and at least for now is a stellar speculation. One of the best. I just happen to think it is a joke as a currency substitute and is not likely to end well as a longer term investment. I could be wrong, wouldn’t be the first time and surely not the last.
Bitcoin is a horrible unit of account and wildly volatile.

As you state it is a speculation. The speculation (bet) is that Bitcoin will eventually be good money (and stable unit of account). Every time someone buys BTC to "hodl" it, not only are they betting on that outcome but they are adding to the liquidity, increasing the price, and dampening the volatility. A bit of a self fulfilling prophecy.
I agree with almost everything except that anyone who buys BTC to hodl actually reduces its liquidity. Once it becomes more widely accepted the hope is that there will be greater market depth. More liquidity will make for a more stable price.
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Re: China Bans Cryptocurrency Transactions

Post by Kbg » Wed Oct 06, 2021 5:54 pm

vincent_c wrote:
Wed Oct 06, 2021 2:18 pm
bitcoininthevp wrote:
Wed Oct 06, 2021 11:45 am
Kbg wrote:
Sat Oct 02, 2021 12:31 am
Oops, too late for that thank you very much.

To be clear however, I’ve consistently stated BTC has been and at least for now is a stellar speculation. One of the best. I just happen to think it is a joke as a currency substitute and is not likely to end well as a longer term investment. I could be wrong, wouldn’t be the first time and surely not the last.
Bitcoin is a horrible unit of account and wildly volatile.

As you state it is a speculation. The speculation (bet) is that Bitcoin will eventually be good money (and stable unit of account). Every time someone buys BTC to "hodl" it, not only are they betting on that outcome but they are adding to the liquidity, increasing the price, and dampening the volatility. A bit of a self fulfilling prophecy.
I agree with almost everything except that anyone who buys BTC to hodl actually reduces its liquidity. Once it becomes more widely accepted the hope is that there will be greater market depth. More liquidity will make for a more stable price.
In all of human history there is not a single example of a fixed quantity currency that has been stable under economic duress. As I've mentioned numerous times on the board...that is the tradeoff. Instability is baked into the approach...it's mathematical as to why.

Currency stability is created by the ability to print and withdraw paper money from the system. The concept is not wrong and has been proven to work multiple times since the Great Depression. Now I will grant you that humans can and have screwed things up, but the difference is that mathematically, you can basically prove how stability is achieved.

In sum, instability is guaranteed in the former. We at least have "hope" in the latter. One may not like hope as an option, but it's better than knowingly having something that WILL be unstable.
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Re: China Bans Cryptocurrency Transactions

Post by vincent_c » Wed Oct 06, 2021 6:57 pm

I whole heartedly disagree.

Bitcoin will be stable when people price things in BTC. 1 BTC will always be 1 BTC and what isn’t stable is that you either need to work harder to obtain BTC or sell more products to get it.

It only doesn’t work well as money if you’re looking for subjective standards of fairness or when it becomes politicized. In a capitalist free market, I can’t see why it wouldn’t be stable if it becomes the unit of account and governments are required to receive taxes in it.
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Re: China Bans Cryptocurrency Transactions

Post by I Shrugged » Wed Oct 06, 2021 7:13 pm

Fiat person: Hard money doesn’t let governments create money to fend off deflation.

Hard money person: So what? Let the bad debts liquidate, and get on with it.
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Re: China Bans Cryptocurrency Transactions

Post by vincent_c » Wed Oct 06, 2021 11:07 pm

Also crypto is very efficient at liquidations which is good to clear out the leverage in the system every so often.
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Re: China Bans Cryptocurrency Transactions

Post by boglerdude » Wed Oct 06, 2021 11:39 pm

If bitcoin goes up people will hoard it and use something else as currency aka IOUs. So whats the crypto version of a customizable IOU
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Re: China Bans Cryptocurrency Transactions

Post by vincent_c » Thu Oct 07, 2021 1:00 am

A smart contract.
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Re: China Bans Cryptocurrency Transactions

Post by bitcoininthevp » Thu Oct 07, 2021 8:17 am

vincent_c wrote:
Wed Oct 06, 2021 2:18 pm
I agree with almost everything except that anyone who buys BTC to hodl actually reduces its liquidity. Once it becomes more widely accepted the hope is that there will be greater market depth. More liquidity will make for a more stable price.
I said people buying and holding adds to liquidity.
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