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Bitcoin Exchange BTCChina Says To Stop Trading, Sparking Further Slide (reuters.com)
Several Slashdot readers have shared this Reuters story: Chinese bitcoin exchange BTCChina said on Thursday that it would stop all trading from Sept. 30, setting off a further slide in the value of the cryptocurrency that left it over 30 percent away from the record highs it hit earlier in the month. China has boomed as a cryptocurrency trading location in recent years, as investors and speculators flocked to domestic exchanges that formerly allowed users to conduct trades for free, boosting demand. But that has prompted regulators in the country to crack down on the cryptocurrency sector, in a bid to stamp out potential financial risks as consumers pile into a highly risky and speculative market that has seen unprecedented growth this year. Just hours after BTCChina announced its closure, Chinese news outlet Yicai reported that the country plans to shut down all bitcoin exchanges by the end of September, citing financial sources in Shanghai.
My best guess based on the available data is that China was previously propping up North Korea using BTC, and these exchanges were a politically good way of doing that so they allowed them to exist.. but now since North Korea is waving its Nukes around, they are closing them down as part of withholding payments and support as a punishment tactic.
Expect more China BTC exchanges to shut down as they centralize power and control.
Bitcoin is still up 456 percent over the past 12 months = Things That Make You Go Hmmm
Bitcoin has gone from funny oddity to actual threat. China very tightly controls its money, because if it allowed free movement of money, the country would very quickly find itself broke. Nobody keeps their assets in yuan who has a choice. As a way to get money out of China, bitcoin is now a threat to the Communist Party. When nations are taking you as a serious threat, that's a genuine achievement, and I'd like to offer my congratulations.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
>And this is why people see this as a volatile speculative commodity, and not a currency
Well, there's ALSO the transaction rate limit, the ridiculous transaction fees to compete for a reasonable transaction time, and the practical centralization of the 'decentralized' system with a handful of Chinese mining concerns. And the lack of vendor adoption. And the difficulty using it securely. And the ease with which access can be irrevocably lost. And the baked-in deflationary economic model.
But other than that, yeah, a drop-in replacement for a genuine government-backed currency!
The transaction costs are a tiny fraction of what a bank or credit card processor charges to send Monopoly bank money.
And you keep your coins in cold storage. They're impossible to steal unless someone finds your wallet, kidnaps you, and tortures you for your pin, and even then the blockchain will show exactly who did that to you.
It's a technologically better form of money, far more efficient for moving large sums across borders. For this reason, it's only going up in the long term. If it's up 400 percent this year after the "crash," imagine what it will be like in a few years when millions more people grok the tech. Most Slashdotters will miss the boat. Not my problem.
A lot of people were 'Hmmm'ing all the way to bankruptcy in 2007 when their house was 300% of the purchase price and -30% a year later. Surely bitcoin couldn't suffer the same fate as that extremely secure, tangible, asset.
Wow! it's over $3,000/coin now last I heard it was only up to $2,700.
Minimum threshold fixed. Thanks!
Wouldn't it be interesting to see the transaction ledger that would show the actual movement of one specific exchange purchase of a bitcoin, and then show the second transaction where this specific bitcoin is transferred to another party in exchange for another kind of money or a tangible item like food.
The problem for us as spectators is to get a picture of some bitcoin transactions with the seller and the exchange shown. Then another picture with the exchange and the buyer shown. Then a third picture with both source transaction currencies and bitcoin shown. Is there a circular or destabilizing flow taking place due to asymmetry in the currency exchange rates seen as a loop?
As a spectator, my editorial comment is the Chinese bitcoin exchange shutdown is probably caused by the government's ability to investigate domestic bank transactions. It seems there has been promotion of bitcoin sales in the domestic US (judging by the popup ads I see). The US side of the bitcoin exchange may showing a big blast of dollars. There I am stuck.
What is this speculative surge of dollars doing to the Chinese economy? Is this surge the problem the Chinese government is trying to halt?
>The transaction costs are a tiny fraction of what a bank or credit card processor charges to send Monopoly bank money.
Sure, as long as you're buying a car. Of course, you also have to find someone selling a car for bitcoin... Now tell me what it costs to buy your groceries, go to the movies, or get a cup of coffee?
>And you keep your coins in cold storage.
Uh-huh. And your average person keeps their keys where? On a computer, because nobody's going to write their access keys down on paper and lock them in a fire safe. In fact, they'll keep their keys in a wallet on their smartphone, where they'll be stolen by hackers. Or they'll use a web wallet, where - in the event they're not defrauded by the wallet provider - a keylogger steals their access codes. Hence the very popular Bitcoin phrase "Sorry for your loss".
>and even then the blockchain will show exactly who did that to you.
HAHAHHAHHAHAHA. Yep, you can trace the coins to the current keys with authority. Now match that to a person without the power of a major government to help you. And if the coins are tumbled, or even just cashed out in a different legal jurisdiction, what are you going to do? Bitcoin transactions are irreversible, it's in the design.
>It's a technologically better form of money, far more efficient for moving large sums across borders.
If you find someone willing to accept it on the far side.
>imagine what it will be like in a few years when millions more people grok the tech.
If millions more ADOPTED bitcoin, it'd crash instantly, since it's totally unscalable.
>Most Slashdotters will miss the boat. Not my problem.
Well, your ignorance and stupidity aren't mine, but here we are. Maybe you'll get lucky and BLASH. Maybe you'll hold on to your 'store of value' as it all crashes. But you've got your blissful ignorance and faith to make you feel superior, so you've got that going for you.
Maybe move out of mom's basement and get a real job. Sunlight's good for you.
Most Slashdotters don't sell Amway, either.
I beg to differ. While I am of the opinion that Bitcoin is a volatile speculative commodity, I don't think that its being 30% down as a result of closing down exchanges serves well to make the point.
The reason I'm making this point is simple. A commonly accepted fact is that the surge Bitcoin has experienced over the past year is a result of the increased activity in China, including Chinese miners and Chinese exchanges. All of these Chinese persons, for whatever reason, invested in Bitcoin relying on the conditions of the market then, a huge part of which is the fungibility of Bitcoin. Now, as the current situation is, take some of that fungibility away by closing down exchanges and spreading rumours of cracking down on Bitcoin and increasing regulation. Obviously, the actors involved in Bitcoin would hurry to liquidate the assets that they hold, and would furthermore desist from acquiring more Bitcoin. Those that still hold Bitcoin will find fewer buyers. And add the panic caused by these news. If one accepts the fact that a significant part of the activity in Bitcoin was a result of the activity in China, a -30% swift would not seem all that unreasonable.
What would happen with a 'hard' currency in a similar situation? If the United States were to implement currency controls tomorrow, prohibiting anyone in the United States from acquiring foreign currency in exchange for US dollars, I wouldn't be all too surprised if the markets reacted by making the US dollar 30% less valuable. Yes, I would expect that it would fall less than that, but only because of the privileged position US dollars hold in the world economy. And, I wouldn't be surprised at all if such currency controls caused a 30% drop (or more) in less widely spread currencies, like, say, the Swedish krona or the Swiss francs. The situation with Bitcoin is no different. It is also akin to what would happen to any currency if the country printing it (except perhaps for the US dollar, again) faced some sort of hurdle, like we see happening to the pound sterling now.
As for why I think that the Bitcoin market is mostly speculative, my personal experience is that it is mostly used for trading cryptocurrencies themselves, or for hoarding it in the hopes that it will go up, but not so much as a medium of exchange. I have not seen many major retailers beginning to accept Bitcoins, nor do I know anyone (nor of anyone) that uses Bitcoin for their day-to-day transactions. While this transactional use of Bitcoin may exist in some markets (like the dark web, cryptolockers, some VPN providers, camgirls, etc.), I do not think this alone would account for the recent price surges, as I do not believe these markets to be as big as the Bitcoin market cap. For as long as this is the case, I am of the opinion that Bitcoin will remain speculative and volatile.
And yet, despite what I just wrote, there are indications that Bitcoin is not as unstable as of yet. Save for precise events that can explain certain market behaviours, like the current one, I see that its price has been fairly stable (or rising) in the medium term. For example, if you bought in at its highest in September 2016 and sold at the lowest any time after September 2016, you would have sold in October 2016. The same can be said, in general, for the rest of this last year. In other words, mostly those that are playing the very short term game (buy at time t, sell at time t+1s or time t+1w, or such) have faced losses (and if they were playing the game repeatedly, they still mostly came ahead.) Bitcoin was at its absolute maximum a few days ago, and is now still at a higher price point than it's ever been since July this year, meaning that those playing a longer term game, or using Bitcoin as a store of value, have overwhelmingly not lost. It is therefore not so accurate to call Bitcoin mostly volatile when there is an easily found upward trend.
There is an old saying from the 90's. "On The Internet Nobody Knows You Are A Dog.".
That can be revised now: "On The Internet, Nobody Needs To Know Your Dog Has $1,000,000 Worth Of Bitcoins."
Well, it can be both. People do, after all, speculate in ordinary currency. An hour a day spent in currency speculation made John Maynard Keynes a rich man.
The whole point of Bitcoin is that governments don't control it (although this event demonstrates that this doesn't mean governments can't take actions that alter its value). This sounds like utopia to some people, but it's got its drawbacks. One of them is that there's no central bank taking actions to stabilize the value of the currency. If you can live with that, a decentralized cryptocurrency like bitcoin has its uses.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
You forgot about 100% traceable transactions for your entire wallet (identify you with one transaction, and the public record shows ALL your transactions you ever made), to essentially eliminate privacy...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
It's a technologically better form of money, far more efficient for moving large sums across borders.
Really? What, a 3% surcharge (1.5% on each end) is good? I pay $15 flat rate for a wire transfer, no limit. Did one yesterday to a vendor, $380,000 for $15. I guess Bitcoin charging $12,000 would be better than $15?
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
We knew it was coming for years. I had guestimated it would get close to $6,000 / Bitcoin before it crashed to $3,000-4,000 as it did during the last major crash (that is it lost about half its value or so). There is a reason I accept Bitcoin in my business and spend Bitcoin, but don't invest in Bitcoin. Most who were holding Bitcoin should still be doing VERY well in spite of this crash though despite that I'm not investing in it.
I've done very well in terms of profiting off of having and using Bitcoin because it does tend to go in an upward direction, but to invest in it at the wrong time is just asking for trouble. It's a risky investment and I prefer to invest in things where I know my money is going to double in X amount of time. The good thing though is if you did invest in it when it was at $5000 and didn't stupidly sell off as its hit bottom today you'll probably only have to wait two years and three to make your money back and double your profits. For most people this is still better than investing elsewhere and less risky.
I've spent 10s of thousand of dollars worth of Bitcoin in the past month or two and have saved over $3000. I've also saved 3% or so on every product my company has sold where a customer has paid in Bitcoin because I didn't have to pay credit card transaction fees on the sale. The profit margins on the biggest items ($600+) my company sells are less than 3% so we have doubled the profitability on these transactions. The less expensive accessories we sell have super high margins though and make up for the low margin high ticket items.
I'm now betting it's going to be another 2 years before Bitcoin hits the $5000-$6000 range again and stays there. It will then proceed to rise up to and exceed $10,000 over the next couple years.
Rather telling that once someone in China gets rich, the first thing they do is look for a way to move their money out of reach of Communism. It's like they don't have any faith in their government or something...
HA! I just wasted some of your bandwidth with a frivolous sig!
"the blockchain will show exactly who did that to you."
The same blockchain that makes it so easy to nail a ransomware developer?
All this sounds like stock pumping and bashing. Best place to discuss it is on stockhouse.com.
Tie that name to a number ONE TIME, and it's tied for all past and all future transactions too. Cash? You're tied for ONE transaction only.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Why would you pay 1.5% on each end? That's not part of Bitcoin. Are you talking about transaction fees? You could easily move any arbitrary amount of money for a dollar or less in transaction fees, that's a lot less than 1.5%.
> >The transaction costs are a tiny fraction of what a bank or credit card processor charges to send Monopoly bank money.
> Sure, as long as you're buying a car. Of course, you also have to find someone selling a car for bitcoin... Now tell me what it costs to buy your groceries, go to the movies, or get a cup of coffee?
Bitcoin is still generally cheaper for purchases over $30 to pay in Bitcoin even with rising transaction costs. Transactions are getting more expensive for more limited purchases, that's true, due to the limits. But there is a lot of interesting engineering going on to fix this problem, such as the lightning network, which should be able to reduce the cost of transaction fees and allow micropayments for fractions of a cent of transaction fees. Other tech on the horizon includes sidechains, where you could use Bitcoins on a network with a different security model; the more expensive high security chain is not required for day-to-day small purchases, and could ultimately be rolled up into the main chain through a sidechain-to-main transaction, or even a lightning network bridge.
>And you keep your coins in cold storage.
>> Uh-huh. And your average person keeps their keys where? On a computer, because nobody's going to write their access keys down on paper and lock them in a fire safe. In fact, they'll keep their keys in a wallet on their smartphone, where they'll be stolen by hackers. Or they'll use a web wallet, where - in the event they're not defrauded by the wallet provider - a keylogger steals their access codes. Hence the very popular Bitcoin phrase "Sorry for your loss".
There are dedicated hardware devices now that make cold storage very easy and highly protected such as the Ledger and the Trezor. If Bitcoin or other cryptocurrencies get more popular, there's not reason why this type of technology couldn't be implemented safely directly into phones as an independent chip isolated from the rest of the operating system. That would give the benefits of very high security with simple user interfaces for users. There could even be schemes for recovery with multi-factor authentication, key sharding schemes, etc. These are still fairly technical, but it's easy to imagine a world where this is a lot simpler for end users. The current hardware wallets are already light years an improvement over your "write on paper" suggestion.
>>It's a technologically better form of money, far more efficient for moving large sums across borders.
>If you find someone willing to accept it on the far side.
Adoption is continuing to increase. It's small now, but growing relatively quickly.
>>imagine what it will be like in a few years when millions more people grok the tech.
>If millions more ADOPTED bitcoin, it'd crash instantly, since it's totally unscalable.
There are a ton of improvements that have been made and are continuing to be made to increase the scale as the demand is growing. For example, the latest release of Bitcoin Core that came out just yesterday includes a 40%-50% speed-up for sync, significantly reduces memory requirements, and disk space. Another recent improvement, Segwit, increased transaction capacity by at least double while also providing the ability for more future upgrades. Many improvements are on the way as already mentioned for the volume of transactions as well, such as the lightning network, sidechains, etc. There is also a lot of experimental engineering being done that could help scale such as proposals like Mimblewimble.
There are interesting things going on with using bloom filters, and the recently released FIBRE network that is some extremely cool computer science engineering to pass Bitcoin blocks at nearly the speed of light to reduce orphans. There is so much interesting computer science and cryptographic research going on that it's astounding. A lot of this revolves around improving scale. So on a tech site like Slashdot, you probably should keep an open mind about it, read about some of the really neat developments in the pipeline, and not just dismiss it.
What is the fee to transfer Bitcoin into a currency that can be used for 99.99% of life?
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A common exchange rate is somewhere between 0% to 0.25% depending on how the exchange is done (market maker vs taker), and volume. See for example: https://www.gdax.com/fees/BTC-...
With the rise of technologies like lightning network and decentralized exchanges, we might see even better exchange rates if you can swap across different currencies easily.
Bitcoin. When you want your money to have all the safety and stability of a third world country.
~X~
People always complain that a new item isn't usable everywhere. I remember when Youtube hardly had any videos. Would these same people scream about no content?
If you're so positive bitcoin is going down, then I'm sure you are cleaning up by shorting them, right?
file:
Bitcoin's had long enough to develop some share of economic activity and failed, because it is in no way superior to cash, a debit card, or a credit card, no matter how much you feel justified in prosthelytizing. It's coming up on a decade soon, and the best you can do is say, "I can use it to buy gift cards that I then use to buy stuff". In other words, it's good for low-level money laundering and illicit purchases. Yay.
Youtube, on the other hand, was a superior option and gained market share as a result.
And of course there's always the fact that adoption would kill Bitcoin faster than waiting for this particular 'get rich quick' fad to fade out, since it doesn't scale very well at all.
So for my wire transfer, I could pay $1900 for the transfer, versus $15. And how fast is that money available? Wired funds typically are good within 1 day or faster... With the extreme volatility of Bitcoin, a 1 day delay could slash - or raise - costs by 10% or more.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!