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How China Took Control of Bitcoin (nytimes.com)
Slashdot reader Rick Zeman quotes the New York Times: In its early conception, Bitcoin was to exist beyond the control of any single government or country. It would be based everywhere and nowhere... Yet despite the talk of a borderless currency, a handful of Chinese companies have effectively assumed majority control of the Bitcoin network. They have done so through canny investments and vast farms of computer servers dispersed around the country...there are fears that China's government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network. The government's intervention in 2013 suggests that Bitcoin is not too small to escape notice.
And this is why I did not bother with Bitcoin. That currency value is way too high for its own good and was bound to attract the greedy Chinese speculators once it started gaining 'value.' It is seriously hyper-inflated. I do better with mining and selling gems and mineral samples.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
If you're wondering how OG bitcoin enthusiasts that have been with bitcoins from late 2009 feel about it (aka me) we're PISSED! Every last person thinks China can go straight to hell. People threw parties when one of the major bitcoin mining facilities in China burned to the ground. I hope they all burn down in fact. Fuck those greedy, lying, ASIC-hoarding, patent-stealing, rip-off artist assholes and their control of the bitcoin network and manipulation of its price on a daily basis.
From a purely futuristic perspective, the altcoin CURE (aka CureCoin) prevents mining silos ... and even if China took over mining/folding of CURE, it benefits the entire global community since the only way to mine it is through protein folding research (ok 80% is folded, and 20% is still SHA-256). But if you're feeling patriotic, or slightly xenophobic ... the research being done is seeded by the NIH and NSF. Food for thought.
Bitcoin as an idea is very interesting but, in actual function, it's a scam. I wanted to learn more about it a year ago and so bought some mining ASICs. It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?
Um, because of reality? In this case, cost of capital:
If I can make a machine for $900 that generates $100/year forever, I get an 11% return on capital.
If I can sell it for $1000, I get an immediate return of $100, and can build another machine and repeat the process. At one per day, I make $36,500 in my first year.
If the risk free interest rate is around 3%, the second plan is worth 10x as much as the first plan.
At least in theory a fiat currency is tied to the productive labour of the people of the country - which is why hyperinflation only ever really happens in countries that first had some other kind of social unrest or plague or war destroy their productive capacity (look it up - every example of hyperinflation* in history was first preceded by an unrelated and massive problem that destroyed the productive capacity - printing money only *really* becomes a problem when there isn't any production for it to represent). Bitcoin isn't even tied to that. ... well any of the things we added to money over the centuries to solve the many problems we encountered over the past ten thousand or so years. Which pretty much leaves it vulnerable to every single one of those long-solved problems, problems we solved so successfully and so long ago that most people have forgotten they ever existed.
It's, at best, tied to the energy it costs to mine - which you need to buy, for a fiat currency... which makes it nothing but a substitute for fiat currencies without any official recognition or supply controls or consumer protections or
*Well, all but one but the one time that it actually WAS the money supply in isolation is never mentioned by the goldbugs. That was the Spanish hyper-inflation problem which ultimately led to the collapse of the Spanish empire. The reason they don't mention that one is that goldbugs are mostly also free market fundamentalists who think inequality, no matter how severe, is the proper state of the world - so they don't want to mention that one because the key driving force of it was extreme inequality. The money supply was massively increased (by conquistadors coming back with gold and silver mined in the new world by slaves), but this increase went entirely to a tiny elite (the conquistadors). So businesses raised prices massively to get at that new money from the conquistadors who had it to spend. Of course this meant the money was worth a lot less than when they arrived - so their brutality in the mines got worse and worse because no matter how much they mined they never got much richer back home. Meantime every merchant's prices had gone through the roof selling at a fortune to the conquistadors, so the suppliers raised their prices to cash in on the newly-moneyed merchants... etc. etc. and the average workers (mostly farm-workers then but others like bricklayers and the like too) did not see their incomes increase. While the prices of food and clothing were set at the rates only the super-rich could afford, the country starved... until civil war followed.... so basically the end result is the same as every extreme inequality in history, just with a side-trip into hyperinflation that aggravated the problem.
Unicode killed the ASCII-art *