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China vs. Bitcoin

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China vs. Bitcoin

Postby kurt_w » Wed Dec 18, 2013 11:12 pm

The headline says it all, I guess.

This should be interesting. I wonder what the outcome will be.
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Re: China vs. Bitcoin

Postby Mad Howler » Thu Dec 19, 2013 12:26 am

I wonder what you are thinking about this,
Beyond this post.
Could ya - kurt_w - apply some of your trade to es'plain the bitcoin in a way that is digestible?
I only have this vague regret about not getting in possession of a few when they can out.
I think there is much more to this emerging financial architecture than we are being 'taught'.
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Re: China vs. Bitcoin

Postby pjbogart » Thu Dec 19, 2013 12:35 am

Bitcoins = Tulip Bulbs
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Re: China vs. Bitcoin

Postby Mad Howler » Thu Dec 19, 2013 12:57 am

pjbogart wrote:Bitcoins = Tulip Bulbs

Ha!
I get that.
But here we are...
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Re: China vs. Bitcoin

Postby snoqueen » Thu Dec 19, 2013 11:34 am

Bitcoin may be flawed, faddish, taxable, and manipulable, but the idea of an international currency (or many currencies) not issued by any one country is not about to go away. I believe this is the beginning of the end of the age of the US dollar, though I probably will not be alive to see how it all shakes out.

Here is (what appears to be) the bitcoin people's own explanation of how it works:
http://bitcoin.org/en/how-it-works

Clicking the links in that page will help some.

Here, however, is more of an opinion (one of many) on what bitcoin means:

http://blog.zorinaq.com/?e=66

The comments on that page are worth reading.
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Re: China vs. Bitcoin

Postby kurt_w » Tue Feb 25, 2014 1:40 pm

kurt_w wrote:The headline says it all, I guess.

This should be interesting. I wonder what the outcome will be.

OK, now that a few months have passed, we can see that Bitcoin's soaring rise came to an abrupt halt, and it began a long downward slide. China's anti-Bitcoin efforts have been more successful than I'd expected.

Now this Mt. Gox thing seems to be knocking it down a little further, though it's unclear how long that will last. As I understand it, it's not really a problem with Bitcoin per se, except insofar as Bitcoin's value is entirely based on people's confidence in it and rightly or wrongly this damages that to a certain degree.
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Re: China vs. Bitcoin

Postby Detritus » Tue Feb 25, 2014 2:42 pm

snoqueen wrote:Bitcoin may be flawed, faddish, taxable, and manipulable, but the idea of an international currency (or many currencies) not issued by any one country is not about to go away. I believe this is the beginning of the end of the age of the US dollar, though I probably will not be alive to see how it all shakes out.

One solution that has some popularity in East Asia, including China, is not to replace the dollar with another single currency, but to take a "market basket" approach, something like what is already done when doing international economic comparisons. Details differ depending on who's proposing the scheme, but the basic idea is to have a core of currencies that are pegged to each other (let's say, the dollar, the euro, and the yuan), so that converting from baht to any of the pegged currencies yields the same result.

I'm not sure this approach would really work. One reason that currencies become international standards (the $US is only the most recent, after all) is the perception that the economy supporting the currency is somehow immune, or at least resistant, to inflation and deflation. The $US, and before that, the Pound Sterling, achieved that reputation through the sheer size, reach, and stability of the US and UK economies, respectively. The failure of the Euro to seriously challenge the primacy of the dollar suggests that even an economy the size of the EC fails to meet those requirements. The PRC has a huge economy that is spreading rapidly around the world, but the jury is still out on the stability question. No matter how common the yuan becomes worldwide, if there is any question it might not retain its value because of, oh, a collapsing real estate bubble at home, it won't be trusted as much as the dollar. This is particularly true of the PRC because the government is so deeply involved in fundamental ways in the civilian economy--for example, all land is still officially owned by the government, and the largest companies all enjoy government agencies (typically the PLA) as the majority shareholder. If things go south, then the government is left holding the bag. And, since the government back the yuan, the yuan follows the economy south.

This is fundamentally different from the US system, in which (like it or not) the government guarantees major players in the economy, but is not directly exposed, and could cut failing companies loose (see Lehman Bros.). True, that has not been the case in the recent banking scandals here, but it is possible. It is not possible in the PRC.

In short, I don't expect the $US to be dropped as the international currency anytime soon. Certainly I don't think it will be replaced by something like bitcoins, which are more of a commodity than a currency. Really, given the ability to digitally transfer and convert currencies in a fraction of a second, I don't see the need for a currency unlinked to a given economy. It would have been a good idea prior to WWII, but what is the point now?
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Re: China vs. Bitcoin

Postby green union terrace chair » Tue Feb 25, 2014 5:17 pm

Some decent cryptocurrency may become dominant in the future, but it won't be Bitcoin. Bitcoin is fundamentally flawed and broken.

Consider that:
1. Every person with a Bitcoin wallet has a transaction file with a record of every transaction and the amount of every other wallet everywhere. This strength, making Bitcoin secure and uncounterfeitable, is also its downfall.
2. The size of that transaction file grows every time a Bitcoin transfer takes place anywhere in the world. The size is currently a couple of gigabytes.
3. The rate of transactions is currently limited to about six per second and falling. How many credit card transactions do you think occur per minute?
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Re: China vs. Bitcoin

Postby kurt_w » Mon Mar 17, 2014 10:34 am

Newsweek thought they found the guy who created Bitcoin. But do they have the right guy?

Dorian Nakamoto Hires Lawyer, Denies Any Bitcoin Connection

This particular Mr Nakamoto seems pretty adamant that it ain't him.
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Re: China vs. Bitcoin

Postby Ninja » Wed Mar 19, 2014 6:05 pm

kurt_w wrote:This particular Mr Nakamoto seems pretty adamant that it ain't him.


It ain't him. His lawyer is one of my best friends from law school, and he actually signed with Mr. Nakamoto Friday morning, then hopped on a plane to Madison Friday afternoon so we could carpool to another law school classmate's wedding on Saturday. We spent the whole weekend talking about the case and the statement he issued on Sunday night, and at least in my opinion, the only question here is how large Newsweek's settlement offer will end up being.
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Re: China vs. Bitcoin

Postby kurt_w » Wed Mar 19, 2014 6:55 pm

Hey, cool, thanks for sharing that. I'm impressed!
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Re: China vs. Bitcoin

Postby Ninja » Wed Mar 19, 2014 7:38 pm

kurt_w wrote:Hey, cool, thanks for sharing that. I'm impressed!


I was following the story even before I knew my buddy was involved, and the whole situation is suspect, from details like the cop on scene who immediately recognized Nakamoto's name as being associated with bitcoin to the entire methodology of the investigation. Bad journalism, but that's the new journalism I guess.
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