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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.
It's been days since we had a Bitcoin story, I was growing nostalgic for one, and whaddya know, one pops up like a gift from Heaven.
Just cruising through this digital world at 33 1/3 rpm...
No, this is about bitcoin in China and China's much more about the pork. You can get beef, but it's the pig that powers the bellies of China. So it should be:
You are all pigs. Pigs say oink. OOOOOINK! OOOOOINK! Oink pigs OOOOOINK! Oink say the pigs. YOU PIGS!
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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?
At the time when I bought my ASICs, the Chinese companies that were making them started changing directions and were moving towards a model of letting you rent ASICs that they would host. It's kind of a brilliant plan because it means they can reduce the costs of ASICs by creating WAY more than people will ever buy and then just renting people as many as they want. The rent more than pays for the electricity and manufacturing costs so, no matter what happens, the ASIC manufacturers always win. Unfortunately, they are the *only* people that win.
It's not surprising at all that China controls the bitcoin market. They *are* the market. All the ASICs come from China and if they don't sell the ASICs, they make a profit by running them. If they do sell the ASICs, they make more profit by selling them at an inflated price that speculators will pay. It's a hell of a racket.
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.
I thought that the Wall Street Journal was the Wall Street propaganda rag.
If the New York Times was going to be considered as a propaganda rag, it would be for Liberal minded intellectuals and not businessmen.
How much of all our generated electricity is being thrown into this pit?
“He’s not deformed, he’s just drunk!”
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.
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 Chinese miners can't change the rules of the bitcoin network, because the bitcoin network uses cryptography to see if anyone is breaking the rules. The Chinese government could attempt to pressure miners into using their influence over the bitcoin world, but Chinese miners only have influence because the rest of the world does not currently view them as anti-bitcoin. However, if Chinese miners suggested, for example, that the supply limit be changed to something other than 21 million, they would be seen as anti-bitcoin by the rest of the bitcoin world, and then they would lose their influence. Chinese miners could launch a 51% double-spending attack (and possibly destroy the value of their own coins in the process), but no amount of computing power would give them the ability to change the rules (because cryptography).
Not only that, but the sovereign debt of the U.S. is issued in U.S. dollars. Lots of governments and individuals around the world own U.S. debt, and they are all invested in the dollar remaining strong so as to maintain the value of that investment.
And this ignores commerce conducted in U.S. dollars, like the international oil market, which while beneficial to the dollar as a whole, could probably be swapped out for another currency (the yuan renminbi I assume at this point, given that the euro doesn't look too good) if given enough notice.
It doesn't hurt to be nice.
Comment removed based on user account deletion
Any value attributed to bitcoin is essentially in the eyes of the people who choose to use it.
The same is true of anything whose value depends on a perception of value; Spain learned this when they started minting the famous 'Pieces of Eight' in the 15th century in such huge numbers that the actual value in term of what you could buy with them tumbled - and they were made of very pure silver. Money is, even at best, not real value, but only a token that you can exchange for goods and services of value. We continue to believe in certain currencies only because we believe in the entities that guarantee their value, and that is where cyber currency falls down, IMO. Like the emperor's clothes, it works well until the little boy speaks up and breaks the illusion; and the world is full of little boys like that.
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 *
Finally someone gets this.
Bitcoins, like any fiat currency, only has its value as long as people see a value in it. People put faith in Dollars and Euros because they consider them "stable", something they can trust to not lose their value. Should they do, you'll see them becoming worthless. The value of Bitcoins is exactly in the inability to track their flow. Should they become trackable, you'll see their value plummet.
So if China takes control of Bitcoins, fear not (unless you have a lot of Bitcoins, of course): They'll drop into insignificance and another fiat cryptocurrency will take over.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Erh... no.
The value of the dollar is mainly that there is a huge economy behind it and that economy stabilizes the currency. If that was not the case, it would be trivial to buy dollars come April, because everyone wants to get rid of them and would love to take your "hard" currency in exchange so you can pay your taxes.
For reference, see any country in existence with a runaway inflation.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
The proposition out forward is that "like Bitcoin, any fiat currency has value -only- because people choose to use it".
You mentioned one of many reasons that people do choose to use USD. What you mentioned is an important reason. That's already covered under "people choose to use it".
There is ALSO another category that applies to fiat currency, but not Bitcoin. People are forced to use USD. Fifty million people get their monthly checks from the government denominated in US dollars; they can't choose to get paid in Bitcoin instead. Most people HAVE to pay taxes in USD; they can't pay in Bitcoin. They are forced to use US dollars.
Just because you get your wage in a currency and that you have to use it to buy stuff in that country doesn't mean that the currency has any "real" value. For reference, take any ex-East Bloc country. There has even been that old joke:
There's little difference between West and East: For West-Money, you can buy anything!
And that was quite true. When you drove over to Eastern Europe, you could rest assured that at every parking lot near a mall you'd find a LOT of people offering you money. For exchange rates that differed VASTLY from the official ones. Because everything you really wanted, you could only buy for hard cash. Marks, Dollars, Franks, Schillings, Pounds. Not Zloty, Forint, Ostmarks or Lei. You could get cheap crap for that, and you could use restaurants only of course with the official money (even though if you tipped in West money the service improved significantly!).
So just because you "have" to use some kind of currency due to official requirements doesn't mean that people want to have it. Usually, they have more than they want of that junk. What they need is money that buys them something.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
free market fundamentalists who think inequality, no matter how severe, is the proper state of the world
Those that believe that don't understand free market economics. True free market economists believe the free market provides equality. They believe that people are paid fairly based on their contribution to society. i.e. Poor people don't contribute as much as rich people. However, in reality that is not the case, and rich people manipulate the system for their further financial gain.
The example of free market economics in action that I like to use is US trade with China. Allowing (more or less) free trade with China has allowed the poor of China to find gainful employment and move into the middle class. However, this was at the expense of the US middle class. Although, it can be argued that the US middle class was far wealthier than the Chinese poor to begin with. Unfortunately, the wealthy saw the greatest benefit from this transaction due the reason I mentioned above.
My point is, equality is a two way street. To make everyone equal, some "rich" people become poorer, and some poor people become richer. It doesn't matter how you go about it, socialism, or free market capitalism. The end result is the same.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
I don't think anybody seriously thinks everybody should earn the same. But I do think the degree of inequality matters. Too much is just as bad for the economy as too little.
You need some, because some people are only motivated by money - so you need the ability to have more as the only way to get those people to do anything. But too much and you end up with severe wealth concentration, which utterly skews the entire economy - and can leave you with productive economies that, nevertheless, fail at their most basic function: distributing goods to where they are needed.
It is also (and unsurprisingly) a fact that severe inequality harms both GDP and economic growth - ultimately, the end result of too much wealth concentration is that everybody makes less money than they otherwise would have. Even the rich.
Generally - I think a well functioning society would see the wealthiest person earn roughly twice what the poorest person earns. And by definition a functioning society does not have anybody who earns nothing (even if some people's earnings are from charity or social safety nets). But those figures are debateable. Better economists than me can give better numbers.
Currently though the difference is rather larger than that. In most companies the CEO earns roughly 800 times what the lowest paid worker does. I'm sorry - but it's simply mathematically and physically impossible that he could EVER be producing 800 times as much value.
The biggest problem here is that we've let market rates determine wages - which is silly because wages are not like any other goods or services, they are not constrained in the same way or produced in the same way - they are not governed by the same economic rules, and what's worse - this flat out ignores that wages are the ONLY product the vast majority have to sell - so de facto wages are life. It's people's time, their hopes and dreams. It's human beings trading parts of their life for the means to survive - and they don't get limited liability protection. That is simply not the same thing.
Yet the fundamentalist free marketeers always call on the market when it suits them to justify inequality, yet pretends it isn't one whenever it suits them. They tend to be anti-union while ignoring what, under their own theory, a union is: a comglomerate of small businesses who found they could be more profitable by merging. Then they call unions evil - because they don't WANT this kind of business to be more profitable, it's profits are costs to the businesses they actually like. Suddenly the market can no longer be trusted to make it's own rules and they advocate for things like so-called "right-to-work" laws that prevent the formation of union-shops. Ignoring that no company in history has ever been forced to be a union shop - becoming a union shop is a contract freely signed between two businesses which, by their own logic, both businesses believed they were better off from. A contract you can actually believe that about since both businesses have fairly equal power to negotiate (but oh they will do everything to prevent workers ever having real power in negotiations - contracts are only supposed to be "free" for the business owners).
The greatest example of libertarian hypocrisy is that every libertarian I have ever met opposed anti-trust laws and supported right-to-work laws and didn't even REALIZE that philosophically they regulate exactly the same thing: what type of exclusive supplier arrangements are acceptable.
Here, I am on safer ground philosophicallly - I support anti-trust laws and oppose right-to-work, but since I never claimed all market regulations are evil I haven't painted myself into a corner with an overly simplistic ideology. I can state that the former is good and the latter is bad because their effects differ - and I believe that regulation should be measured by it's effects, if the pros outweight the cons it's good regulation, if you can make the pro list longer or the con list shorter it can be better regulation - but it's only BAD regulation is the cons outweigh the pros.
Unicode killed the ASCII-art *
Generally - I think a well functioning society would see the wealthiest person earn roughly twice what the poorest person earns.
Ben And Jerry's used to use a 5 to 1 ratio. I've heard others use a 7 to 1. But most companies are just ridiculous. CEO's don't add much value. Most of them are simply asserting their power over the employees by paying themselves that much money.
The greatest example of libertarian hypocrisy is that every libertarian I have ever met opposed anti-trust laws and supported right-to-work laws and didn't even REALIZE that philosophically they regulate exactly the same thing: what type of exclusive supplier arrangements are acceptable.
I have only recently come to this realization myself. But you're right. If companies can't form a cartel to manipulate a market, why should union's be allowed to? And vice versa. The answer is power. How do you measure power? How do you make sure the union and management are on equal ground during a negotiation?
I believe there are companies that take unfair advantage of their employees (Walmart, PetSmart). However, there are some unions that take advantage of corporations (GM, Hostess). There needs to be a balance.
My personal belief is market regulation is acceptable only to monetize some externality for businesses. (e.g. a carbon tax to combat climate change) Businesses should be responsible for keeping those externality costs down, because that's what businesses are good at.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
> If companies can't form a cartel to manipulate a market, why should union's be allowed to?
Now for me, this is easier to answer: because union formation will most likely increase the overall fairness of the market by raising the negotiation power of people who individually have very little or (often) none at all. While cartel formation decreases the fairness of the market by increasing the negotiation power of organisations that already have too much.
Since I measure the validity of regulation by outcomes rather than having a principle either way (I don't think it's a matter of principle - economics should be a purely pragmatic exercise and the pragmatism should be focused around giving the best possible outcomes for the largest possible number of people) I can say that. Those who claim that it's an infringement on personal liberty to regulate markets however, cannot be consistent if they are then happy to regulate unions. If anything the latter type reduces individual liberty for a far greater number of people so should violate their principles more.
>There needs to be a balance
Now you're starting to sound like a socialist libertarian. Left libertarians say a free and fair contract cannot exist unless everybody involved has equal negotiating power, anything else must inevitably be coercion. The right libertarians on the other hand deny that most forms of coercion are in fact coercive (flying directly in the face of the vast majority of people's life experience - and thus rarely convincing anybody).
>My personal belief is market regulation is acceptable only to monetize some externality [wikipedia.org] for businesses
I don't agree that's the only acceptable regulation - but it is in a very needed one. Though externalities are a form of market failure and most libertarians deny that market failures exist (it's amazing how people who pride themselves on their objectivity so frequently deny the existence of things people see happening every day). Externalities are, in fact, one of the worst market failures - it means that contracts have shifted most of their cost onto third-parties who have no consented to being part of the contract. It's actually a far worse and far more illiberal thing than taxes. Being forced to subsidise somebody else's business without my consent is much worse than giving money to the government - because in the latter case at least SOME of that money will be spent on things I benefit from, heck some of it will be given to me (state pensions and such), in the former case it is simply stolen from me and I will never get any of it back.
Unicode killed the ASCII-art *