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China Bans Financial Companies From Bitcoin Transactions
quantr writes with this excerpt from Bloomberg: "China's central bank barred financial institutions from handling Bitcoin transactions, moving to regulate the virtual currency after an 89-fold jump in its value sparked a surge of investor interest in the country. Bitcoin plunged more than 20 percent to below $1,000 on the BitStamp Internet exchange after the People's Bank of China said it isn't a currency with 'real meaning' and doesn't have the same legal status. The public is free to participate in Internet transactions provided they take on the risk themselves, it said. The ban reflects concern about the risk the digital currency may pose to China's capital controls and financial stability after a surge in trading this year made the country the world's biggest trader of Bitcoin, according to exchange operator BTC China. Bitcoin's price jumped more than ninefold in the past two months alone, prompting former Federal Reserve Chairman Alan Greenspan to call it a 'bubble.' 'The concern is that it interferes with normal monetary policy operation,' said Hao Hong, head of China research at Bocom International Holdings Co. in Hong Kong. 'It represents an unofficial leakage to the current monetary system and trades globally. It is difficult to regulate and could be used for money laundering.'"
"The public is free to participate in Internet transactions provided they take on the risk themselves,"
that should actually be a green sign.
any method that can be legally used to turn yuan into something else that can be turned into money - and can be moved electronically - is in big demand...
(no, I don't have any bc)
world was created 5 seconds before this post as it is.
Yeah, btc took a momentary dive, and people jumped on it and it shot right back up above $1k. This all happened while I was asleep so *shrug*
It's not banned at all, it's said that bitcoin can be freely buy and sell by the people but it's regulated like a commodity (gold, silver, oil) and there is no guarantee or protection from the standard financial institution. Bitcoin will actually benefit from a statement like that. Governments and Banks stay away from my bitcoin and leave the real free market work!
It means it's attracted the attention of the big players so they'll be the only ones making big profits from now on.
Anybody with enough capital can manipulate the bitcoin market (just like any other stock/share) - creating artificial shortages to drive the price up, dumping it into the hands of greedy individuals when it peaks, buying back when it crashes down. Rinse, repeat.
No sig today...
How come we only see bitcoin stories on slashdot?
How come there's no stories about Litecoin, Namecoin, etc.? They both have "billion dollar" values, too.
No sig today...
Did they also ban financial companies from tulip transactions?
Do you even lift?
These aren't the 'roids you're looking for.
Fear the unknown !!
The reality is Bitcoin is stateless so China can't exert influence on it. Scares them, it does. Yes.
A feeling of having made the same mistake before: Deja Foobar
... & they can't have that, now, can they? The push here seems to be to decouple the yuan in any big way from their own currency markets & see how that goes. As long as it means a low yuan, that might be fine by them. But then one yuanders: who really has the pretend currency?
Because other alt-coin are only copy/paste of Bitcoin, have no infrastructure and are less secure because they there is less miners. How many merchant accept Litecoin or Namecoin?
Like I said, "similar", not "exact". Bitcoin is the poster child of the inflatable, independent currency experiment, but it shares traits similar to the stock market and limited quantity physical goods. It's not impossible for something which shares the traits that guided the valuation of Bitcoin to emerge. It'll likely be a long way off and possibly too difficult to identify in time to profit from it.
Charisma is the measure of someone's ability to lie with a straight face.
Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.
So it is a *good* thing for some of those banking institutions from being prohibited from using Bitcoins. And really, banks do not need to be dealing with Bitcoins - do you really want a bank to be taking your money and "investing" it in Bitcoin?
Classifying it as a commodity, like gold or silver, for regulatory purposes makes sense, and much like there are few regulations on gold and silver themselves, these are regulations on the banks, not on Bitcoins.
Now, the anti-money-laundering stuff may be a cumbersome burden on Bitcoin exchanges, and tries to defeat the entire purpose of Bitcoin's pseudonymity, but the US already has similar restrictions, and they're not restrictions that are completely unreasonable. In fact, wouldn't regulations on converting Bitcoins to and from other currencies make people more inclined to use Bitcoin as an actual currency, instead of just a carrier system for other currency (the buyer buying BTC to immediately spend, and the seller immediately converting it back to a "usable" currency)? Even their attempts to undermine it seem likely to strengthen it.
This might be a weakness of BitCoin eventually. As blockchains get longer and longer, it gets more unwieldy to keep everything updated.
The closest thing is having to calculate every transaction (vending machine, gas station, bank, etc.) a Loonie [1] coin has been through since it was struck at the mint. Even though big-O is a linear function, after a while, the cryptographic calculations required for each transaction can add up over time, and when a BitCoin is broken into subunits, each subunit down to the satoshi will have its own separate chain that has to be run through.
Not a big problem now, but as BitCoins circulate through large amounts of users, it might become an issue, especially for large volumes.
[1]: Or quarter, or Euro, but Loonies are a decent unit for an arbitrary example.
You realize Namecoin isn't a currency, right? It's a replacement of DNS...