China declares cryptocurrency deals ‘illegal’

https://dailybusinessgroup.co.uk/2021/09/bitcoin-falls-as-china-declares-crypto-illegal/

by sturza • 5 years ago

305 653 5 years ago

dailybusinessgroup.co.uk

robtaylor• 5 years ago

Again

lexa1979• 5 years ago

uh... You stole my word ^^

Bombthecat• 5 years ago

And in two months :again!

tinus_hn• 5 years ago

It wouldn’t even surprise me if China runs this as a pump and dump scam.

rastafang2• 5 years ago

They wanted to buy more Bitcoins...

noneeeed• 5 years ago

I've been wondering if/when China would start tightening their rules.

However I'm not entirely clear from the article exactly what the status of crypto in china now is. It's not clear to me from the quoted statement if it is actually illegal to use crypto to pay for something or to hold or transfer it, or if it's something a bit more subtle and limited.

powerapple4• 5 years ago

bitcoin in China is mainly for speculation and money laundering. It is illegal for business to take bitcoins and operate exchanges. I don't think holding it or transferring it would be a problem, that's the base of bitcoin's decentralization.

There are A LOT scams going on with all coins, people put money into it without knowing anything about cryptocurrency. If you read recent news about Evergrande, when Chinese people invest money for speculation, no one is considering the risk of losing money. I wonder if this has something to do with this.

trident50003• 5 years ago

Exchanges were already banned a while back.

_red• 5 years ago

Its literally just a restatement of their 2017 pronouncement with no changes.

Its being hyped as "new" but its not.

Closi• 5 years ago

Banning exchanges and banning use are two different things.

ulzeraj2• 5 years ago

Apparently it never gets old.

yorwba• 5 years ago

Here's the 2017 announcement: http://www.gov.cn/xinwen/2017-09/04/content_5222657.htm

Here's the one from 2021: http://www.safe.gov.cn/safe/2021/0924/19911.html

There are changes. E.g. the 2017 announcement doesn't mention 衍生品 (derivatives) at all, while the 2021 announcement explicitly lists trading them among the prohibited activities.

yawaworht19783• 5 years ago

And what about mining?

When will this be truly enforced?

sturza• 5 years ago

Reuters: https://www.reuters.com/world/china/china-central-bank-vows-...

Blikkentrekker• 5 years ago

The use of “illegal” in this article is highly ambiguous.

I can't read the text and be certain whether it means that transactions in it are prohibited, or that it simply does not have the same status as legal tender, as in currency that companies are required to accept.

1cvmask• 5 years ago

This seems to me the same as their old pronouncements. Nothing new as in newsworthy. Maybe they are doing this as a reminder of their older announcements? Sort of like "I told you so!"

mettamage3• 5 years ago

A friend of mine that works in the industry as a business developer for Chinese blockchain firms since 2017 said the exact same thing!

My market perspective:

"Everything is priced in."

Apparently, not in the crypto markets. Old news is new news, apparently.

Policy perspective:

The more DeFi becomes a thing, the less a policy like this will matter. It will still matter a lot, but it will pack less of a punch due to decentralized services.

My overall perspective:

If crypto still feels as speculative (in terms of trading crypto) 10 years later, then I feel the experiment to find a good use-case has ran for long enough.

Loughla2• 5 years ago

If crypto still feels as speculative (in terms of trading crypto) 10 years later, then I feel the experiment to find a good use-case has ran for long enough.

Maybe I'm taking this to a place you didn't intend, or maybe this is an ignorant question but. . . .

What is the US market now, compared to 10 years ago. My experience is that 10 years ago Bitcoin was used to either buy drugs, or as a bet made by college kids that they could make easy money.

And. Well. It seems still pretty much the same in terms of existing primarily as a speculative tool.

Jensson5• 5 years ago

They banned crypto mining before, but did they really ban crypto transactions before?

holoduke• 5 years ago

I hope the rest of world follows. There is nothing more volatile than a decentralised crypto currency. The amount of people making a profit from it is less than 5% and energy consumption is beyond acceptable. Crypto as a tech to serve something different is totally fine of course.

flenserboy• 5 years ago

So you'd rather a system where TPTB get to fudge the books as they see fit, impose taxes via intentional inflation, and keep tabs on your every transaction? Interesting.

epgui3• 5 years ago

That’s not exactly how it works.

Factorium2• 5 years ago

Europe is currently facing electricity and chip shortages. Banning crypto in the EU would be an acceptable measure for addressing that.

nix23• 5 years ago

Or banning useless iot devices in cars fridges and toasters would be an even more acceptable measure.

BTW the chip shortage has nothing todo with mining, but if you believe that lie Nvidia and AMD tells you since 5 years...well then that's to bad.

noxer9• 5 years ago

Only PoW cryptos need extensive electricity and hardware. Its completely absurd to ban crypto. Thats like if you would ban all motorized vehicles to get rid of coal blasting diesel trucks without catalytic converter.

Needless to say that its also technically impossible to ban crypto. Its like banning torrents or even harder and we all know torrent was attacked heavily in the past but it did not go away.

tjansen• 5 years ago

Does anyone mine in Europe? I can't imagine that, considering the cost of electricity here.

baybal22• 5 years ago

Why not to ban steelmaking first?

Steel manufacturing requires tons of electricity, and it is already impossible in EU without enormous subsidies. It's an industry surviving entirely on life support.

barrenko7• 5 years ago

Because we live in times of unprecedented institutional failure, not building reliable power sources and there is zero non-wishful thinking ahead.

poontang13• 5 years ago

It would not. Hardly anyone mines in Europe. Ironically power shortages are due to ESG initiatives that phased out power stations using fossil fuels and left unreliable power sources of wind and solar

guilhas3• 5 years ago

So don't use it duh

deepsun2• 5 years ago

That's right, but those who are invested in crypto really want everyone to invest too.

paulgb3• 5 years ago

It’s an externalities problem. I can not use it, but I can’t opt out of the climate impact.

(Save the “it’s not really that bad” arguments, I’ve heard all the industry’s gaslighting, but their claims don’t match reality)

_ph_2• 5 years ago

There are some concerns which I share, that Bitcoin, when it finally fails, leaves huge damages to all financial markets as too much money is already bound in there. And directly, the environmental damage done by bitcoin is quite severe, so everyone should be concerned about that.

0FreedomInUSA3• 5 years ago

Please educate yourself harder before making these ignorant statements, unless you have a motive behind

mettamage3• 5 years ago

Instead of downvoting I decided to write this comment.

I don't agree with the sentiment of the parent either, but:

* Assume the best interpretation of a comment [1].

* Keep it on topic

* Don't attack the person, also not implicitly (e.g. "please educate yourself", don't say that)

Reread: https://news.ycombinator.com/newsguidelines.html

One can claim many things about the parent comment. But it's all directed to the topic at hand.

Cheers!

[1] The best interpretation I can come up with is: yes the energy issue with crypto/bitcoin are an actual problem to solve. Yes, using crypto might be a good use-case in certain situations. While I don't believe the profit claim (there's no source), I can't disprove it either. So it poses an interesting question as to whether that's true.

johanneskanybal2• 5 years ago

It's ok to not like crypto but how about sticking to the truth? * There's many things much more volatile than crypto, the biggest markets being vix if you're a hedgefund and pretty much all derivates like options if you're a gambling man. btc in particular is only 2x from many traditional markets: https://charts.woobull.com/bitcoin-volatility-vs-other-asset... * The second part of only 5% making a profit is made up and makes no sense. There's not a lot of days since it's inception where you could buy and hold some btc and it wouldn't be more worth later on. Sure if you fomo at a local top and panic sell the bottom you can get burned but it's an easy trade my guess would be more like 80% but like your number it's also just made up. * Energy consumption you need to put it into relation of comparable resources, of course if you're determined it's worthless it's hard to justify any cost even if it's minor in comparison but that's a personal opinion of yours and many disagree.

moepstar• 5 years ago

I also wonder when people voicing environmental concerns will accept that there's a whole slew of newer Proof-of-stake blockchains that aren't using that much energy.

One example being Algorand which is carbon neutral: https://www.algorand.com/resources/blog/how-algorand-offsets...

Oh and speaking of usage of crypto in China - i wonder how that affects VET / VeChain which is, largely, used by Walmart China to track their wares:

https://seevechain.com/contracts https://www.vechain.com/

sobellian• 5 years ago

One might disagree on what exactly is a comparable resource. A digital currency could just as well store everyone's balance in a giant SQL database. In exchange for utter centralization the energy consumption drops to essentially zero. IIUC a PoS coin will also have much smaller energy consumption. So we have a situation where a collection of people are using huge, huge amounts of energy to speculate not only on digital assets, but on decentralized PoW digital assets.

bmitc3• 5 years ago

energy consumption is beyond acceptable

Do you have any resources or studies to describe this more? I have really struggled to find actually nuanced discussions and unbiased sources for this. It’s all at the extremes of it’s either the worst thing ever to not a problem at all.

I’d also be interested in comparisons to energy usage of say servers that run Facebook, Instagram, YouTube, etc.

thinkmassive2• 5 years ago

Not supporting the parent’s opinion, but here’s a well researched report on the topic: https://nydig.com/bitcoin-net-zero/

whoisjohnkid• 5 years ago

A lot of the energy consumption argument against bitcoin stems from this study [1]. Some have pointed out flaws in the study that over inflate the consumption numbers. This has sparked various indexes that have tried to measure the consumption in an unbiased way [2].

Additional studies [3] have shown that 39% of bitcoin miners are using renewables.

The energy consumption argument has led some to investigate the energy consumption of other assets such as gold with some estimating the energy requirements for gold to be 50x that of mining bitcoin [4].

Whenever energy consumption of other assets are pointed out to be higher than bitcoin the debate then shifts to utility; e.g it’s ok if Y consumes X energy because Y provides Z to society.

Some bitcoin miners are finding interesting way to utilize the heat produced by their mining equipment [5]. And some say that bitcoin mining can help reduce the cost of producing new green energy infrastructure since excess power that would’ve been wasted could be used for bitcoin mining to offset costs.

I agree with you that it is tough to find unbiased info on the subject.

- [1] https://www.researchgate.net/publication/328581842_Bitcoin_e...

- [2] https://cbeci.org/

- [3] https://www.jbs.cam.ac.uk/wp-content/uploads/2021/01/2021-cc...

- [4] https://simon.medium.com/bitcoin-and-pollution-the-definitiv...

- [5] https://braiins.com/blog/green-innovation-in-bitcoin-mining-...

hacknews20• 5 years ago

“Nothing more volatile…” erm energy prices in the UK just jumped 70% and it’s not to do with crypto, co2 supply shrank to levels never seen before again nothing to do with crypto both of which affect whole populations. Try to avoid crypto hyperbole. Lastly, I don’t know anybody invested in crypto that hasn’t made money, so anecdotally that indicates the number is much higher than 5%.

ddorian433• 5 years ago

Lastly, I don’t know anybody invested in crypto that hasn’t made money, so anecdotally that indicates the number is much higher than 5%.

You make money when you exit and sell the asset for cash. Have they sold ?

trident50003• 5 years ago

Define volatile. The only currency that has stood the test of time is gold, a private currency. Every fiat currency in history has failed.

Probably because heads of state like to print it to solve their short term problems essentially robbing everyone with an inflation tax. I dont call that stable or just. I work and save and expect my currency to hold up and not be abused which is not happening currently.

Edit: HN must be the worst platform in existence to debate. I have about 700 karma and cant comment more than 3 times on this thread. Your rules are not helping discussion or clearing clutter, they're just really annoying. Retrac: no ive hit a limit and cant respond anymore on the whole thread even with only a few comments.

FabHK11• 5 years ago

Every fiat currency in history has failed.

That's funny. The extant fiat currencies haven't failed. So, the only ones that have failed... are the failed ones. And those have failed, 100%, indeed.

jhgb14• 5 years ago

Except gold is not a currency. It's a commodity. Gold coins used to be a currency in certain times and places. Insofar as they're not recognized anymore, at least where I live, they've actually failed.

rualca• 5 years ago

The only currency that has stood the test of time is gold, a private currency.

I'm curious about what leads you to claim that gold is "a private currency". Can you elaborate on the rationale behind your claim?

retrac• 5 years ago

Hacker News has a short delay before you can reply to a new comment. I think precisely to stop instant replies and give people a chance to think about it?

Anyway. There's a cute video out there I can't find now of a man trying to use gold in New York to buy something. Anything. The results indicate its use as a currency was questionable. (No one would accept it as payment.)

mypastself2• 5 years ago

There is plenty of profit being made from selling hardware and software services in the space.

Also, are you suggesting banning all assets whose volatility crosses a certain threshold?

As for energy consumption, does this also apply to Proof of Stake networks?

vnchr2• 5 years ago

Only those that challenge existing economic power structures.

floatboth4• 5 years ago

There's pretty much nothing different to serve with bitcoin-style "public blockchain" tech. Nothing needs to be trustless, and nothing would securely work as trustless without currency-style incentives (why namecoin is a coin, etc.). (And "private blockchain" is just a term based on marketing hype tied to bitcoin, there's no new tech there, that fundamentally just means incorporating the same concepts as Git.)

https://www.youtube.com/watch?v=xCHab0dNnj4

hgibbs• 5 years ago

Is what you say less true of traditional exchanges? Maybe it is, but I haven't seen someone crunch the numbers - I'd be happy to read a comparison to that effect.

noxer9• 5 years ago

Only PoW cryptos need extensive electricity and hardware. Dont make crypto just bitcoins. If you really want to help make a dent in the energy consumption then people need to move away from PoW coins not from crypto in general.

floatboth4• 5 years ago

How exactly do you incentivize anyone ever to abandon PoW coins rather than just adding non-PoW on the side?

How exactly do you think you could dethrone Bitcoin, overcoming its gigantic first-mover advantage?

I believe BTC could only come down with the rest of that "economy".

tromp2• 5 years ago

Only PoW cryptocurrencies can be fairly distributed and avoid wealth concentration (although many fail to do so by concentrating most of emission in just the first few years).

pid-13• 5 years ago

I won't downplay the environmental consequences of PoW, but the actual reason so many governments are speeding the push against crypto might be related to a future of high inflation and high gov debt. It would be the perfect storm for mainstream crypto adoption.

eli2• 5 years ago

I sincerely think the main motivation is to protect people from losing too much when the bubble pops.

mn678• 5 years ago

Nonsense. Why would any sane person move a large part of their assets into something as volatile as crypto? If you want to protect yourself against inflation, buy real estate or equities if your time horizon is long enough. Even fixed income once rates are a bit better. But for the average person please stay clear of crypto!

enkid• 5 years ago

For China specifically, the reason to hate crypto currency is because it's a system where they don't have control. It's the same reason they are cracking down on the tech sector and Hong Kong. The CCP does not like having competitors for power or even something they don't have control over.

gwbas1c3• 5 years ago

the actual reason so many governments are speeding the push against crypto might be related to a future of high inflation and high gov debt

The reason why we have inflation and debt is to keep the value of our currencies stable. IE, if people want to use dollars, the US government can print more dollars to satisfy the demand. (And thus keep the value stable.)

Cryptocurrency's volatile value is a result of its inability to "print money" when more people want to use it.

Remember: Currency is not an investment. A good currency has a stable value over time; otherwise it's very difficult to conduct commerce.

worrycue3• 5 years ago

Current inflation is due to the government “creating money” for the COVID-19 stimulus, the fact that governments can even do that is what’s so good about fiat currency.

Bailouts are another benefit. Governments can at will dull or even prevent financial contagion thus preventing another Great Depression.

All this has a cost in the form of inflation until the money is reabsorbed of course but it’s better than economic collapse.

firecall• 5 years ago

Mainstream Crypto is the new year of Linux on the Desktop ;-)

basisword• 5 years ago

Shall we just ban everything volatile and/or that uses more energy than you personally find acceptable? Or anything that isn’t profitable for an arbitrary number of its users? I don’t particularly care about cryptocurrency but seeing bandwagon arguments like this at the top of HN threads is frustrating.

Offpics• 5 years ago

You should educate yourself. Energy consumption is an old myth and cryptocurrency pushes a lot of innovations in this field. There is a great documentary on this https://www.youtube.com/watch?v=b-7dMVcVWgc.

avianlyric10• 5 years ago

Energy is a zero sum game. Every watt you use for crypto mining is a watt not used for something more productive.

Every watt of renewable power generated to power a crypto miner, is a watt not being used to reduce the use of non-renewables in the wider energy grid.

I don’t care if your crypto gear is hooked up to a dedicated hydro plant, I care that the hydroplant is not connected to the wider grid and shutting down gas fired power stations.

FabHK11• 5 years ago

It is a bit annoying that you assume that people critical of cryptocurrencies and specifically Bitcoin's environmental footprint are uneducated about the issues. It is not a myth. BTC's environmental footprint is preposterous. It's estimated that the network currently runs at 165 TWh/a, or around 19 GW, which means that one transaction uses around 5 GJ or 1500 kWh, and produces 800 kg of CO2, and 250 g of electronic waste.

For keeping track of a ledger that one dude in a basement with an Excel spreadsheet could keep track of, more or less.

jhgb14• 5 years ago

Oh, the old "EDuCaTE UrsElf" argument? I'm sorry, but Bitcoin's energy use doesn't even pass the smell test. If you're consuming ~1% of global power generation while providing only ~2% of world's narrow money, that's not very optimistic. The fact that its deflationary nature makes it unappealing for actual cash transactions should make it even worse should you go for transaction volume comparisons.

Graffur• 5 years ago

Yours is the top comment on this thread and it's a bit surprising. When you say less than 5%, what are you talk about? Can you point to any sources that back that up?

pskiba6• 5 years ago

Maybe if he meant less than 5% of miners make money. I could potentially believe this, given the competitive nature of mining.

However, as an investment, as of right now, there is only a span of a few months where if you bought Bitcoin you would not be in the green right now.

tuesdayrain3• 5 years ago

The amount of people making a profit from it is less than 5%

I find it amusing how casually you just made up a statistic and used it as justification to ban something. Here's an actual statistic: 100% of people who held Bitcoin for longer than 4 years are up on their investment.

edit: Lots of downvotes for an easily verifiable fact. Anyone can look at the BTC chart and see that there is no 4 year span where the price ends up lower than it was at the start.

ricardobeat• 5 years ago

Even more amusing to call what is supposed to be a currency, an “investment”.

rspeele2• 5 years ago

95% is clearly a number pulled out of thin air, but it is likely that most people have not realized a profit from Bitcoin. Where would the money come from? The only way for a majority of investors to realize a (small) gain is for the minority to pay for it in a (larger) loss. And that's for a zero-sum game. In Bitcoin, since running the system involves continuously consuming real world value in the form of billions of dollars worth of energy per year, it's most likely that the majority of participants end up at a loss.

Just imagine everybody in the world buys as much Bitcoin as they can afford, immediately.

How much richer are we all, in aggregate, at the end of the day?

czl6• 5 years ago

Madoff ran his scheme for decades. Till the day it fell apart 100% of his clients were up on their investments. They also learned that when you multiply decades of fantastic returns by a single zero your outcome is zero.

Millions can be wrong for decades. If history teaches anything is has to be this.

arnold_palmur• 5 years ago

I know HN's sentiment around cryptocurrency, regardless, how is this the top comment in this thread?

selfhoster116• 5 years ago

I am not fine with having every one of my transactions being 100% transparent to my government. Because that's the only alternative to Bitcoin^W cryptocurrency, given that real cash is on its deathbed for some reason. Bitcoin may very transparent, but other currencies like Monero are much better in that regard.

As to why >100% transparency is a desirable property, see recent regime changes and imagine how easy it would be to persecute the friends of the old regime by simply looking at their purchase history.

Edit:

scrose• 5 years ago

Huh? Bitcoin records every transaction you make on a public ledger that anyone in the world can view. Anyone who knows your wallet address can track your purchases

FabHK11• 5 years ago

I'd say that cash transactions are less transparent than BTC's public ledger.

netcan• 5 years ago

Bitcoin wanted to be the world's currency, with a techno goldbug understanding of what money is. That shades a lot of what we think of as crypto.

There are a lot of different versions of the idea though. A lot of variety exists in crypto now, and very little is deterministic. I don't want to rule out the positive possibilities, and outlawing is broad brush. The PCB grunted at crypto here. We can do

That said, the variety of possibilities also creates danger. Underregulated stable coins, for example, get very sketchy once you reach a certain size. If they keep growing, start embellished with dolaralized interest payments and such.... you now have a rogue banking system issuing its own US dollars. Good luck with that. The scale of fraud, and treacherously borderline fraud can be epic. I don't think we should downplay these.

OTOH, this is true of every part of the financial sector. Lets not pretend the current way the financial sector is structured isn't riddled with the kinds of problems crypto poses.

A country with some clever CB people, even a small one, should be bold and bring crypto into the pax. There's a lot you can do with a designed-4-a-purpose currency, and crypto is a very viable way to do many things. Bitcoin's origins, and much of crypto's present, is secrecy oriented. But, it's actually more natural to design a cryptocurrency for transparency. That's useful in a lot of circumstances.

Take time to understand wtf is going on and regulate, ban or encourage specific things for specific reasons. There's a lot to be gained, not just a lot to be lost. A properly regulated stable coin might be a great idea.

Keynes has made a comeback during the pandemic, and people are relearning war era ideas about controlling inflation. In that context and considering 2021's low interest rates, national savings bonds will probably soon be considered in various places. You don't need crypto to do this, but it does give you more flexibility in how you do it.

UncleMeat9• 5 years ago

with a techno goldbug understanding of what money is

I think this isn't emphasized enough. With existing fiat money I have some degree of democratic control over monetary policy. With BTC, critical monetary policy was set by one person and if that monetary policy ever changes it will be decided by a combination of engineers and mining conglomerates.

Given how critical these policies are and how ideologically focused many of the non-speculators are, I am worried about growing systems with disastrous policy consequences.

adventured2• 5 years ago

I'm not a cryptophile, cryptobug or whatever crypto nuts are called, however I do like to see HN turning so extremely negative on crypto. A few years ago such negative sentiment about crypto was rare on HN, now it's common.

Why is that interesting? Because popular sentiment (in the comments) on HN is very frequently wrong. HN is a tremendous resource for contrarian purposes.

ChrisRR• 5 years ago

Exactly. It's literally just burning the world's resources just for the modern equivalent of beanie babies

For those who genuinely want decentralised currency, there's so many more efficient options

FabHK11• 5 years ago

"imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin"

https://twitter.com/Theophite/status/1030225104234373121

macinjosh5• 5 years ago

If you care so much about climate change have you completely stopped flying? Have you been in a car lately? The energy consumption from those activities is _beyond unacceptable_.

I don't fly in airplanes but I use crypto. So why should you get to choose to do some activities that blast CO2 directly into the atmosphere but I can't? It is a disgusting, authoritarian ideology you have.

Besides that crypto can run on solar. Airplanes cannot. So I propose we ban airplanes. /s

The reality is you just don't like the politics behind the crypto movement. The climate is just a convenient bludgeon for you.

chinathrow• 5 years ago

If you care so much about climate change have you completely stopped flying? Have you been in a car lately?

Isn't this whataboutism? A is not so bad because you know, B does it too.

New_California2• 5 years ago

Do you really want to ban holding 12 words in your head? Or maybe you meant private keys to remain legal but let's ban cryptographic signatures? What exactly do you want to make illegal?

UncleMeat9• 5 years ago

The law works fine without needing to be fully general at the base level. This is the same "illegal number" problem that tech people like to worry about but which isn't actually a problem. The law can distinguish between a private key extracted from some system and an arbitrary pair of prime numbers just fine.

barneygale• 5 years ago

This is an american-centric view of the law; elsewhere in the world (including europe) judges don't reach silly decisions because a law was imperfectly drafted.

billycorben2• 5 years ago

It blows my mind that a community dedicated to technology would support this.

JJseiko• 5 years ago

agreed!!!

Pmop• 5 years ago

You probably live in the first world and had never to worry about inflation or politicians/bureaucrats just straight destroying the fiat currency and your wealth in the process. That's why crypto sounds so "wasteful" to you. BTW, if we give the government the power to judge what is a waste of energy and what's not, I can assure you life would be 100% more miserable, to everyone.

ulfw• 5 years ago

There's actual real fiat currencies for that. The USD, the EUR, the YEN, the CHF... plenty of choices that have been used for decades in the developing world. I'd much rather have my money in a stable-ish fiat currency like those than in some Bitcoin that goes up and down 10% at will or by Elon-tweet.

In fact some countries, e.g. Kosovo and Montenegro, in the Balkans, use the euro as a de facto domestic currency since 2002, even though they have no agreements with the EU.

dmytrish• 5 years ago

Crypto"currencies" are not the only way to store value when an official currency is failing: people who want their savings preserved can get USD, EUR, gold.

Crypto *is* volatile and wasteful compared to any of those.

rastafang2• 5 years ago

I don't know where you got that 5% from but either way, you sound like you fell in the 95%.

DebtDeflation• 5 years ago

Crypto as a tech to serve something different is totally fine of course.

Like what, NFTs for farts? Near as I can tell, the other main use cases for crypto - smart contracts, supply chain provenance tracking, and securities settlement processing really haven't panned out. Others have pointed out why it's not working as a currency. Literally all we have left is a vehicle for speculation.

singularity20012• 5 years ago

maybe PoS powered micro payment in the browser instead of ads... one day in utopia

barrenko7• 5 years ago

All money is highly volatile, but the goverments and the military work hard to hide that. That's why we have the occasional bubble where banks lose everything we ever made.

zeven74• 5 years ago

What do you actually want Western nations to ban? The purchase and sale of digital currencies?? What if a nation adopts Bitcoin as its national currency? You can no longer buy and sell another nation's currency? What if you want to visit that country? (The what ifs will not end at these few examples.)

I don't clearly see what you would actually propose banning. My opinion is it's technology, an idea, and that shouldn't be banned.

tommiegannert2• 5 years ago

First we should ban giftcards. I never understood the idea of using my versatile, national, currency to buy a restricted, local, currency. Esp. without getting a discount for the risk I take.

drukenemo• 5 years ago

The hate for crypto in HN is just tiring.

toomanydoubts• 5 years ago

Because PoW is the only consensus protocol, right? Because the amount of people making money from fiat printing is larger than 5%, right?

lmilcin• 5 years ago

I think your conclusions are wrong even if I agree that bitcoin is overall bad for humanity.

Just because one crypto currency is like that doesn't mean there cannot be another decentralized crypto currency that is better.

Just because your or mine imagination does not reach there doesn't mean there can't be somebody that can figure it out.

mlang23• 5 years ago

deja vu!

MichaelMoser1232• 5 years ago

They probably want to install the digital yuan, so better get rid of the competition https://en.m.wikipedia.org/wiki/Digital_renminbi

noxer9• 5 years ago

This is about the 19th time they do this since I follow the crypt news. Its irrelevant, the people there are under the control of he CCP and no crypt could help them escape.

yosito• 5 years ago

Alternate headline: China says today is a good day to invest in crypto.

tgtweak3• 5 years ago

For those of you keeping track, this is about the 20th time China has declared to have banned Bitcoin or crypto. The only thing they've done is demonstrated that crypto is a threat to their all-reaching power grab and that they are mostly powerless to control it.

dougmwne3• 5 years ago

This is a country rounding up a whole population of a religious minority and sending them to reeducation camps. A country that mobilized over a billion people to almost completely control covid. You are vastly underestimating the CCP, as most Westerns continue to do.

Loughla2• 5 years ago

I've noticed this quite a bit, and I don't understand it. People keep writing articles and saying things amounting to 'it just won't last forever'. But the reason is, because it just won't, totalitarian governments don't last.

Why wouldn't it? Strong central government. Clear economic and social goals with the ends justifying whatever unethical means. A complacent middle and upper class satiated by enough new wealth to make them fat(ter than they used to be) and happy.

Why won't they be the next world power for the foreseeable future? Is there an anti-party faction in China that's larger and more powerful than I see in US media?

Or is this just wishful thinking from the west?

npteljes2• 5 years ago

A country that mobilized over a billion people to almost completely control covid.

What do you mean by completely control covid? What intended result have they managed to arrive at?

agumonkey• 5 years ago

Its not ccp only. Many asian countries were very obedient and self controling, contrary to many western places.

MickerNews2• 5 years ago

That's a ridiculous and obvious lie. This kind of absurd nonsense can only be founded on bigotry.

powerapple4• 5 years ago

Stop spreading "opinions" please. a whole population means basically you have inflated the inflated 1 millions to 7 or 8 millions people. Use your brain.

Jensson5• 5 years ago

They banned crypto mining before, but did they really ban crypto transactions before? This seems like the last step to make crypto coins 100% illegal in China.

eli2• 5 years ago

That doesn't sound as reassuring as you think it does.

RivieraKid4• 5 years ago

Can you provide a source for some previous crypto ban? AFAIK this is the first time they've made crypto transactions illegal.

shlant2• 5 years ago

2013: https://www.bloomberg.com/news/articles/2013-12-05/china-s-p...

2015: https://archive.is/Higoz

2017: https://www.reuters.com/article/us-bitcoin-china-idUSKCN1BJ1...

2018: https://www.businessinsider.com/china-eliminates-all-cryptoc...

2021: https://archive.is/s7nbw

"China Has Banned Bitcoin 13 Times Since 2012":

https://finance.yahoo.com/news/china-great-bitcoin-mining-mi...

aeternum• 5 years ago

It happened so often even prior to 2014 that it was meme-worthy: https://imgur.com/a/KDwtE#WzkZ3W5

FabHK11• 5 years ago

they are mostly powerless to control it.

What makes you think that? You do realise that they could easily outlaw 1) miners, 2) exchanges that convert to fiat, and 3) people privately exchanging to fiat, and (domestically) enforce that reasonably well, too.

And sure, there could still be an underground market - you can get still get weed and cocaine in China or Singapore, but I wouldn't recommend participating in it.

stiltzkin3• 5 years ago

You can exchange FIAT using P2P.

tgtweak3• 5 years ago

They literally did this already (miners were kicked out/shut down, the exchanges were shut down or put in line, and now the broad legality of simply owning/transferring them), and Bitcoin is still doing it's thing, more or less unphased (let's be real, a 10% dip is hardly remarkable in the crypto world) - demonstrating in technicolor how even the most empowered state, with far-reaching and unilateral control of every domain that cryptocurrency requires to operate (law, finance and telecommunication), is relatively useless in it's ability to hinder the mechanics of cryptocurrency. Driving it more underground will not squash it.

MillenialMan5• 5 years ago

I would think the main thing they're afraid of is that it allows Chinese citizens to operate outside the state apparatus of surveillance.

lampe3• 5 years ago

Doge Coin to the moon!

milliams• 5 years ago

cryptocurrency?

theonemind• 5 years ago

ok, boomer.

just kidding. I see 'crypto', I think 'cryptography', and China banning cryptography (except for the party/government) doesn't seem that far fetched, so I think its a bad headline.

rfd4sgmk8u2• 5 years ago

I think cryptozoology. China should ban bigfoot, loch ness monster and chupacabra.

xtracto2• 5 years ago

Hah you brought a grin to my face. I fondly remember the late 90s when I was doing my BSc on computing. I was pretty into cryptography, stenography, data obfuscation and reverse engineering. Back then people doing "crypto" were called nerds by Software Engineers (the nerds of the nerds). Pretty great time.

tgtweak3• 5 years ago

Trampoline sales fall as China declares gravity "illegal".

singularity20012• 5 years ago

Trampoline "users" fall as China declares gravity illegal

vnchr2• 5 years ago

If the Chinese Communist Party bans it, that’s good enough for me. They’re definitely making the kinds of changes and exerting power in a way that reassures me of their domestic and global aspirations.

anfilt• 5 years ago

While not a fan of PoW for evironmental reasons.

For instance El Salvador made bit-coin legal tender there... So china has out lawed what an other country has declared legal tender... Might make transactions between those 2 countries interesting....

yxhuvud• 5 years ago

No, because El Salvador still accepts dollars.

_Algernon_• 5 years ago

This happens every other week.

Gareth321• 5 years ago

Isn't this the 26th time China has declared crypto illegal?

uberdru• 5 years ago

It's not inconceivable that we could wind up in a period of hyperinflation where bitcoin (or some token) could be used to in a way similar to the Plano Real in Brasil back in the '90s. It could actually have a stabilizing (mostly psychological) effect, should things go haywire with fiat.

https://en.wikipedia.org/wiki/Plano_Real

crypot• 5 years ago

Other than white listing and black listing transactions by the miners and exchanges, and governments declaring it illegal, Bitcoin is 100% censorship resistant.

FabHK11• 5 years ago

Bitcoin is 100% censorship resistant.

... as is everything else? Other than governments declaring it illegal and intermediaries black listing it, I mean.

snarf21• 5 years ago

Serious question: In a place like China with the Great Firewall, can't they simply block crypto connections at the ISP level? Can't they more aggressively disallow VPN connections to locations outside of China? They might not be able to change the ledger but it seems like they could (will?) block access to them.

photon-torpedo2• 5 years ago

I think this is technically possible.

Relatedly, can they jam Starlink?

MillenialMan5• 5 years ago

Bitcoin isn't, but Monero is.

aazaa2• 5 years ago

A statement posted on the Central Bank’s website today says that “virtual currency does not have the same legal status as legal currency.”

China has "banned Bitcoin" dozens of times over the last decade. I mean, this is an ancient and well-known meme involving a certain South Park clip after all.

Maybe this time is for real, but all of these media announcements have one thing in common. They always conflate the concept of "legal tender" and "legality."

The number of authorities around the world who have warned citizens about Bitcoin using language like "no legal tender status" and "risky" and "no government guarantee" is legion. Easily thousands of times. Every time "journalists" with no business reporting on tech, law, or foreign governments interpret this as a "ban." 99% of the time, nothing happens and there is no ban.

So, maybe this time is different. Over the last year, an initiative toward greater centralized control seems to be underway in China's tech and finance sectors. Disappearing of wealthy founders. Restrictions on video game consumption. The three red lines. The ejection of the Chinese mining industry.

Then again, maybe not.

RivieraKid4• 5 years ago

China has "banned Bitcoin" dozens of times over the last decade

This is a false narrative pushed by the Bitcoin cult. It's supposed to create an impression that nothing has changed, so the price should not change.

shlant2• 5 years ago

or it's completely factual?

2013: https://www.bloomberg.com/news/articles/2013-12-05/china-s-p...

2015: https://archive.is/Higoz

2017: https://www.reuters.com/article/us-bitcoin-china-idUSKCN1BJ1...

2018: https://www.businessinsider.com/china-eliminates-all-cryptoc...

2021: https://archive.is/s7nbw

"China Has Banned Bitcoin 13 Times Since 2012":

https://finance.yahoo.com/news/china-great-bitcoin-mining-mi...

aazaa2• 5 years ago

You are not paying attention.

https://old.reddit.com/r/Bitcoin/search?q=china+ban+bitcoin&...

todd8• 5 years ago

Here's an interesting take on this:

https://www.youtube.com/watch?v=jFp86n7QCf0

This analysis suggests that the value of tracking every financial transaction will eventually cause governments to all want to institute there own crypto currencies and eventually outlaw independent crypto currencies.

RivieraKid4• 5 years ago

It's simpler to simply require banks to provide transaction data.

mekster• 5 years ago

Question is, would people give up a currency that's not under anyone's control?

57844743385• 5 years ago

Crypto goes up, crypto goes down.

Panic/optimism/panic/whatever.

There’s nothing behind the price but pure sentiment.

lucasyvas• 5 years ago

I'm not sure why the market would react to this news. China is not an example to follow in just about anything these days.

dtwest• 5 years ago

This is interesting timing given what has been happening related to Evergrande. It is possible that the government is worried about money being moved out of the country, and cryptocurrency is one way of doing that.

EveYoung• 5 years ago

How would crypto help with moving money out of a country if mining is banned?

photon-torpedo2• 5 years ago

1. Find a place that takes RMB and gives you crypto. 2. Send crypto to your wallet or foreign exchange. 3. Abroad, sell crypto for non-RMB fiat currency.

No mining needed.

China can't ban 2 (or perhaps they could by putting the great firewall into overdrive) so they are banning 1.

stiltzkin3• 5 years ago

You do not mining to exchange Yuan to crypto.

6d6b73• 5 years ago

Some people think of Bitcoin as a "store of value", comparing it to gold.. I have a question to people who believe that - What do you think will be the value of bitcoin in 100 years? Do you think your descendants would be happier with $50k* worth of bitcoin or with $50k* worth of gold in 200 years? How about 500 years?

*$50k bitcoin/gold if bought today

xtracto2• 5 years ago

Meh... there were some bonds provided by the Mexican government between 1850 and 1951 that at the time seemed like a good investment and now they are worth nothing [1]. Different instruments for different goals.

I would hold BTC for a 100 year horizon. I wouldn't hold it for a 500 year horizon. Actually I would not hold any asset for a 500 year horizon (including gold): I don't have kids and I don't think I will have to worry at that time.

[1] https://www.banxico.org.mx/marco-normativo/d/%7B097567D4-647...

Fire-Dragon-DoL• 5 years ago

Keep falling! Gamers want their gpus back

perlgeek• 5 years ago

virtual currency does not have the same legal status as legal currency
they are not legal and should not and cannot be used as currency in the market

So, you're not allowed to use it as a currency. Can you still use it as an asset?

caiomassan• 5 years ago

they ban bitcoin every year. what is the news?

adrianN2• 5 years ago

Excellent news for the climate.

phist_mcgee• 5 years ago

And what about non energy intensive crypto currencies that rely on PoS or PoH?

randomhodler84• 5 years ago

Don’t worry they are scams, only proof of work is actually secure.

fouric3• 5 years ago

Depends on what you mean by "PoS".

If you mean "proof of stake" - I've never heard anyone describe any environmental issues with them, so I assume that they either don't exist or are far smaller in impact than PoW.

If you mean "proof of storage/space" - it seems like that tends to produce very high write volumes, which in turn burns SSDs out very quickly[1] - and you can argue that that's bad for the environment. How bad, and whether it's worse than the energy consumption of PoW, I'm not sure. From one perspective, it's worse, because you could theoretically power PoW mining using exclusively green energy, but you can't pull the raw materials for SSDs out of thin air.

[1] https://news.ycombinator.com/item?id=27001848

BLKNSLVR• 5 years ago

Most mining has already shifted out of China, and Bitcoin mining is a very small percentage of electricity usage on the scale of "all electricity usage" - there are plenty of bigger fish (the argument then turns, validly, to the usefulness of said bigger fish in comparison to bitcoin).

rsynnott• 5 years ago

there are plenty of bigger fish

Sure, but in most cases people would, at best, be seriously inconvenienced if they were immediately banned. At worst, people would die.

If bitcoin was banned worldwide tomorrow, it would be an interesting story in the news and the internet would be furious for a while; there would be no significant real-life impact. It would probably be the most slam-dunk "obviously we should do this" environmental regulation in history; even things like "we should not put mercury in lakes" had significant downsides compared to banning bitcoin.

cma• 5 years ago

to the usefulness of said bigger fish in comparison to bitcoin

So far bitcoin has negative utility even aside from environmental disaster (ransomware).

dangerface2• 5 years ago

Here come the comments of people who see no value in crypto calming it has no value.

First they ignore you, then they laugh at you, then they fight you, then you win.

A few years ago people laughed at me for buying bitcoin, it's good to see bitcoin adoption moving along nicely.

coralreef• 5 years ago

It's a thunderous dunk while your team is down 40 in the 4th. A loud, but small, short term win.

"Excellent news" would be the halting of state subsidies for coal mining, and introduction of a carbon tax.

sudosysgen9• 5 years ago

Fwiw China is ramping up a carbon tax scheme for coal and gas : https://www.forbes.com/sites/scottcarpenter/2021/03/02/tooth...

They will probably never stop subsidizing coal mining though. Otherwise they will get even more reliant on foreign coal which gives a hypothetical US blockade much more clout.

Torwald• 5 years ago

The idea that crypto mining is bad for the climate is short-sighted. It is based on the wrong assumption of a static universe.

But this world is not static. Let's say for example, all goverments would become more strict in taxing energy consumption. (Presumably to help save the climate.)

Now at some point there is a market incentive to develop mining techniques that optimize for less energy consumption above all else. This would lead to better technologies and thus environment friendly mining techniques.

So this would mean that two factors in this world have changed. Namely taxation on energy and energy consumption while mining crypto.

But this goes further. What if the usage of crypto enables reduction in carbon imprint in other sectors? This could be a possible development.

And so on. The world is always changing.

user-the-name3• 5 years ago

Nonsense.

Bitcoin mining's main cost is energy usage. It already fully optimises for less energy consumption. But because the way bitcoin is designed, any gains in energy consumption will cause mining difficulty to go up, and with it energy consumption.

Bitcoin is designed to be anti-efficient. All improvement in efficiency of mining are immediately cancelled out by difficulty adjustments. That is the economic model of bitcoin: It will always use as much energy as you can buy with the mining rewards.

Jyaif• 5 years ago

Now at some point there is a market incentive to develop mining techniques that optimize for less energy consumption above all else.

There is already a market incentive for that (electricity is not free), and there is already a solution to this (proof of stake). Please stop advocating and using proof of work shitcoins.

paulgb3• 5 years ago

Now at some point there is a market incentive to develop mining techniques that optimize for less energy consumption above all else. This would lead to better technologies and thus environment friendly mining techniques.

That's the insidious thing about PoW, though: it will absorb efficiency improvements by design. If a chip came out tomorrow that halved the amount of energy used per hash, instead of halving the CO2 use of PoW, miners would be incentivized just to double the network hash rate.

ravenstine2• 5 years ago

Now at some point there is a market incentive to develop mining techniques that optimize for less energy consumption above all else.

The question is whether that will happen before serious consequences of climate change. While I agree that market (as well as government) incentive is likely to optimize these systems for less energy, and cleaner energy in general, humans are lazy all the way through the bell-curve. Because we developed for millions of years in a hostile world with scarce nutrition, we are inclined towards conserving nutrition and calories, thus we are still inclined mentally to be reactive more than proactive.

What I'm saying is that you might very well be right, but I am pessimistic in that I think we may react too late. Our efforts to change our ways have been, for all intents and purposes, a joke for the last 40 years.

It is based on the wrong assumption of a static universe.

I am glad you bring up this point, although there's a flaw in it.

What I think you are saying is that the universe is full of change that the myopic human brain struggles to comprehend in its short lifetime. This is something I frequently have difficulty communicating to people.

For instance, one of my long time interests is in native plants and foraging. The truth about "native plants" is that little of it approaches a definition that can be considered truly "native". What's native to a person depends on their perspective. Native since when? Since humans showed up? Since before European settlers? Since the Pleistocene? What people think of as native plants are often as recent to an area as the 1400's or were carried by birds and critters from other parts of the world at some point in prehistory.

To your point, the world has always been changing long before we showed up, and attempting to keep it in suspended animation may be a losing game.

But many in the native plant community (yes, there are people simply interested in native flora) won't have that perspective, let alone consider it intellectually. I left those communities because my view that not every non-native plant is "invasive" or "noxious" was considered heresy. Because the world has always been in flux, I generally don't believe that living things introduced in our lifetime must be eradicated to maintain the image of the world we are familiar with. There are of course exceptions, but to many zealots every plant they don't like must be an exception. It doesn't even matter if an introduced plant doesn't pose a threat to surrounding plants and animals. They want it gone because reasons.

In some ways, climate change can be viewed in the same way. While I absolutely think that climate change caused by humanity is an alarming concern, I have trouble discussing the issue with people because they have the "static universe" world view. In their minds, our current Earth is the one that was always meant to exist, which is pretty anthropocentric. They believe that, at least until recently, we had just the right amount of glaciers, just the right amount of snow in the winter, and just the right amount of heat in the summer to melt the snow caps for drinking water and give us a nice tan; it's just as God intended!

The tricky thing about climate change is that a certain amount of it was destined to happen whether we were blowing CO2 into the atmosphere or not. This fact (and it is a fact) doesn't change my view that we should be concerned about the warming of the glove, but it's often ignored by people. They read facts about melting glaciers and simply conclude, based on their limited earthly experience, that glaciers shouldn't melt and that glaciers melting are necessarily a sign of doom. Ironically, some of them are still opposed to nuclear energy or seriously investing in solar technology, but that's neither here nor there.

On the other hand, some use the fluctuating-universe theory to rationalize their lack of concern. To them, all change is what God intended, figuratively speaking. It's the mirror image of the supposed counterargument.

There are solutions that should satisfy both sides of the coin. Will they ever agree to use those solutions proactively? It seems we are at a political impasse where one's position on these issues primarily depends on where their personality and temperament naturally drifts them towards rather by highly conscious choice. (arguments around free-will notwithstanding)

gfodor15• 5 years ago

Crypto eats the world now if you like it or not. The climate will be fine, because newer systems don’t burn excessive energy. But the CCP fighting the tide is great news, since communist regimes usually fall by trying to clamp down on things beyond their control.

hh3k0• 5 years ago

China is not a communist country, their economic system has been state capitalism ever since the official introduction of the 中国特色社会主义 theory in 1987.

c0nducktr• 5 years ago

The climate is unlikely to be fine, regardless of whether or not crypto mining is banned. At this point we're just affecting just how bad it's going to get.

president• 5 years ago

A narrow-minded argument. If something has a net positive for society, the increased energy consumption would be worth it.

adrianN2• 5 years ago

My argument that it's a net negative for society because of carbon emissions (among other externalized costs).

mistrial9• 5 years ago

China bans your crypto as illegal, while preparing their own national crypto chain(s). Sweden too right? US Fed in the mix with their own plans.

"big thieves hate little thieves"

echelon• 5 years ago

It's a way to move capital out of the country. Bad.

China is trying to prop up domestic stocks and investment. Crypto blunts that effort. Moreover, following or reclaiming the money is difficult, slow, and sometimes impossible. Very bad.

Crypto is probably something that the NSA can headshot and easily kill your cottage industry. Also bad, but to a much lesser degree than the capital flight.

seanmcdirmid• 5 years ago

Pollution is also a huge problem in China. While China would like to still keep its electricity cheap, especially in the hinterland where people can’t really afford higher prices (and otherwise would resort to direct coal use for heating), crypto miners taking advantage of the cheap rates in a way that government didn’t intend.

cabalamat• 5 years ago

Agreed. the CCP wants control and cryptocurrencies weaken that control.

the-dude• 5 years ago

The EU : https://news.ycombinator.com/item?id=28618297

_fat_santa• 5 years ago

I wonder how China intends to enforce this ban. I assume they will be looking at power usage and breaking down doors but that really will only work for POW coins. So that leads me to wonder what they plan to do, technically speaking, to ban all crypto mining. Seems like a fruitless effort.

willis936• 5 years ago

The Chinese government is experienced in internet traffic monitoring and filtering.

throwdecro• 5 years ago

A plan for enforcement isn't really a prerequisite for regulation. It's especially not a prerequisite when there's no limit to the regulator's capacity to investigate and escalate penalties, should existing measures fall short.

thatfrenchguy• 5 years ago

They just want their power plants to be used for useful stuff that’ll create growth, I get it.

endisneigh4• 5 years ago

China, nor the USA nor Sweden is creating a cryptocurrency. How is such nonsense on the top? No wonder misinformation is running amok.

andreilys2• 5 years ago

They’re likely referring to the digital yuan project which is very real and is already being tested in certain parts of china.

tommiegannert2• 5 years ago

Sweden was working on a digital currency. A friend in Sweden told me they over-engineered it by allowing other central banks to use it, and progress stalled.

I wouldn't be surprised if that was the case, but it was just conversation over a beer. Someone else to confirm.

bananapub• 5 years ago

hooray, finally some good news this week.

even aside from reducing the amount of financial stupidity in the world, bitcoin uses as much electricity as entire countries! to process 4 TRANSACTIONS PER SECOND:

https://www.blockchain.com/charts/transactions-per-second

what in the ever-loving fuck are we doing with ourselves.

detaro2• 5 years ago

https://news.ycombinator.com/item?id=28640964

jasonlaramburu• 5 years ago

How is this actually enforceable? Anyone with internet and power can mine. Could they firewall the entire bootstrap IP list for Bitcoin mining?

zucker42• 5 years ago

They don't have to block Bitcoin through technical means; they just have to (figuratively) hit a sufficient number of violators with a $5 wrench. [1]

[1] https://xkcd.com/538/

nness• 5 years ago

I imagine the physical footprint of large-scale mining operations will make it easy to find miners. And as Chinese companies looking to operate on the internet need to acquire a license from the Government, they're probably less likely to risk their whole business for crypto payments/trading.

WJW• 5 years ago

Could they firewall the entire bootstrap IP list for Bitcoin mining?

I mean, yes that would be one way. But apart from that, they don't need to find every last one. Nobody cares about a miner making $0.5 per day on their GPU. The target is the big mining farms drawing multiple megawatts of electricity and you can just ask the power company for the address of anyone using that much electricity. There can't be _that_ many of them, so just visit them all and see if they are running a legit power-intensive business like a metal foundry or if it is a crypto mining farm.

josefx• 5 years ago

Anyone with internet and power can mine.

How hard could it be for the Chinese government to identify suspiciously large amounts of power use? Malaysia of all places recently managed to seize and destroy around a thousand bitcoin mining rigs.

BitwiseFool• 5 years ago

It is enforceable at the citizen and institutional level. I know many decentralized cryptocurrency advocates tout the fact that no government can literally modify the blockchain. While accurate, that is not the point. Governments don't need to do that because they basically have free reign to enforce laws and regulations on its citizenry. Sure you can set up a miner in China, but if the authorities find out you're going to prison. The State might not be able to stop all mining, but they will definitely force it underground and make it a very risky thing to do. A total prevention of an activity is never the actual goal of a ban, the real goal is just to stop the vast majority of it from happening.

ds• 5 years ago

Its not about that. If its not easy or possible to exchange BTC for goods or fiat, it becomes a novelty. You can never kill crypto, but you can certainly make it so that it becomes like beanie babies or tulips, where only a minority of people feel it has any value in the current day.

Bottom of the line is always going to be if you can exchange crypto for goods. If most people feel that the crypto is worthless, the value will plunge and the buyer pool will as well.

andreilys2• 5 years ago

Given that the CCP has a monopoly on violence and has been known to disappear those who cross them, it’s not far fetched to imagine crypto miners having the same fate.

Invictus0• 5 years ago

When will the defi movement realize how much centralized and regulated equipment and systems they rely on? Crypto-anarchists/libertarians are just living in a fever dream.

nimbius• 5 years ago

translation: the microchip shortage has finally become exhausting enough to begin picking low hanging fruit.

quotemstr• 5 years ago

And the anti-cryptocurrency sentiment I've seen all over HN --- which appeared suddenly a few months ago --- is totally organic, right?

I'm sick and tired of everything being a narrative manipulation op.

detaro2• 5 years ago

If you think anti-cryptocurrency sentiment on HN "appeared suddenly a few months ago" you really haven't been paying attention. People have been whining that HN is so so negative about cryptocurrencies for years.

almost_usual• 5 years ago

HN has been mostly anti crypto as far as I can remember.

gfodor15• 5 years ago

It actually makes sense, the "YC generation" turnover is overdue. A few will pass through to the next dialectical synthesis successfully, but a lot are going to be left behind.

Crypto is one of several things which are going to carry things through to the new order. (Avatar embodiment and pseudonymous identity is another, and DAOs taking the place of traditional startups is another.) A lot of people here are going to be left confused and angry, but that's the nature of change: the innovators of the past boil slowly into being stuck in their ways and unable to adapt.

TigeriusKirk• 5 years ago

HN's anti-crypto silliness goes back to the very early days of bitcoin.

spywaregorilla3• 5 years ago

I'd love to hear what else you believe is a narrative manipulation op.

nullc• 5 years ago

Other than occasionally promoting ethereum and connected scams that have been heavily invested in by SV VC firms HN has been pretty reliably negative on cryptocurrency.

Even pure tech work that just happens to have been done by Bitcoin related folks tends to get downvoted and flagged, e.g.

https://news.ycombinator.com/item?id=27573315

https://news.ycombinator.com/item?id=18645790

dang2• 5 years ago

Of course it's organic. The community is divided on the topic same way it is on every divisive topic. Both sides overgeneralize and think the community is against them—people on sides always do that.

la6471• 5 years ago

China seems to be hell bent on exiting the global speculative markets. Can the stock markets absorb this shock?

ethbr03• 5 years ago

Afaik, there is effectively "the Chinese domestic stock market" and "the rest of the world's stock market."

Chinese citizens can invest in the former, but (via government currency exchange controls) can't participate meaningfully in the latter.

So if China exits global stock markets... there isn't that much Chinese money being pulled out of them, because there wasn't that much in them.

What money China is investing internationally appears to mostly go to bonds, construction financing, and asset leases / purchases.

PS: What this appears to really be about is severing links for extraordinarily wealthy Chinese citizens to move money outside the reach of the PRC.

Which, if you were running an expansionist monetary policy intended to facilitate domestic economic growth, while simultaneously cracking down on the wealthy in pursuit of equality, is presumably something you'd take very seriously (as a command economy). Lest all that new & old money just fly offshores.

yomly• 5 years ago

To be fair, it is well accepted that high inflation is bad as everyone stops spending. This holds true for asset inflation as well - you can be damned sure that in the current environment tonnes of people will be taking money out of the system to dump into markets

rmah• 5 years ago

High inflation encourages spending. It is deflation that discourages spending. High inflation means that the money you have today will purchase less in the future, thus it pushes people to buy now rather than later when things will be more expensive in nominal terms. High inflation combined with low interest rates, will also increase financial speculation pretty much across the board.

The problem with high inflation is that it usually (but not recently) goes hand in hand with higher interest rates (i.e. money costs more). Which tends to discourage business borrowing, which acts as a damper on non-financial investment (i.e. spending on factories, marketing, R&D, etc.). This has the effect of slowing down economic growth.

On the other hand, high inflation/high interest rate environments tend to arise when growth is high. Because high growth tends to go hand in hand with a rise in wages, increases in demand (which shifts the demand curve, and thus raises prices), increases in financial speculation, etc.

There are a ton more "on the other hands". Economic analysis is complex and difficult because it's a tangled mess of interdependent feedback loops that constantly change. A single policy action has an avalanche of cascading effects, some of which will be counter to the policy objective. I'm not suggesting humanity should just roll over in the face of this challenge. We should just be aware that it's a "hard problem" and there are never any simple solutions.

vdddv• 5 years ago

how many times has it happened already?

MichaelMoser1232• 5 years ago

Earlier discussion (was on this same front page just over an hour or so, but disappeared, somehow) https://news.ycombinator.com/item?id=28640964

danuker• 5 years ago

you are commenting on it

toofy• 5 years ago

It looks like some threads were merged, so you’re likely in the same thread already.

acd• 5 years ago

Wonder if this will free up Graphics cards for gamers or if the mines will move country?

Bsckground There is a severe shortage of gaming GPUs Geforce 30xx. Possibly semi conductor shortage / crypto mining.

dleslie• 5 years ago

One can hope, it's been a problem for a while now that's impacting the regular cycle of game development.

lousken• 5 years ago

hopefully more ocuntries will follow so that we finally get rid of POW

plebianRube11• 5 years ago

I for one, only like money that there is no proof it was worked for.

bitxbitxbitcoin• 5 years ago

If every country in the world AND the UN "banned" cryptocurrencies, there would still be POW.

rspeele2• 5 years ago

It's all about how much work the reward pays for. At current Bitcoin prices of around $43k, the block reward pays miners $14,125,500,000/year to spin ASICs all day. That kind of money buys a lot of wasted power.

If PoW is still around, but the price dumps low enough that miners are only burning, say, $1,000,000 a year worth of power, that'd be a great improvement.

thehappypm• 5 years ago

Sure, but if no American, Canadian, European, Chinese, Japanese, etc person is willing to use it, then what's the point?

nightski8• 5 years ago

Wow, imagine living in a country where the legal financial assets you own can be turned criminal where accessing them is punished with hard labor. Sounds like a dystopian nightmare.

DethNinja• 5 years ago

Coming soon to a country nearby you…

Plebs cannot be allowed to have access to sound money, otherwise financial parasites can’t exists.

lottin4• 5 years ago

Are you sure you got this right? Keep in mind that the only way to make money with bitcoin is literally by taking it away from other "investors".

imtringued12• 5 years ago

Why do plebs care about sound money? The more sound money you have the more you benefit from it. Plebs don't have most of the sound money, they'll lose out.

thirdvect0r• 5 years ago

Imagine living in a country that allows you to destroy the environment for a fake currency.

Your worldview is ridiculous.

slg2• 5 years ago

This is an overly aggressive tone that will cause knee-jerk pushback, but there is an argument that it is exactly the thing we should expect of our government, to correct for externalities.

This is effectively not that different than a company dumping chemical in the local river rather than disposing of them properly. They are encroaching on my rights to a livable planet for their own personal financial gain.

olalonde2• 5 years ago

The ban also applies to proof-of-stake cryptocurrencies.

monological5• 5 years ago

How do you think the dollar keeps its value? Do you understand that the reason it has value is because it’s backed by the US military, which provides peace and stability for industry to consume a vast amount of energy to produce goods that get shipped around using fossil fuel? Have you calculated the total energy expenditure of the entire US financial system, direct and indirect, and then compare it to proof-of-work calculations? No. No you haven’t. Don’t just parrot what the current-day zeitgeist told you to think.

notapenny• 5 years ago

Well just because one thing in a space isn't great, it doesn't mean that they all are. There are plenty of alternatives to BTC for example that are much "greener". Granted, crypto is a relatively new technology and some of that stuff needs to be figured out. And whether or not its fake, is in the eye of the beholder. It has value, because we pretend it has value, but that's true for many things. Maybe not be so judgemental of other people's worldviews.

dnautics7• 5 years ago

Imagine living in a country that drops depleted uranium on civilians as part of it's programme to hegemonize its 'real' currency!

Or living in a country that continuously devalues its currency, forcing exponential consumption, thus stealing from the poor to give to the rich and destroying the environment while at it?

andrewclunn• 5 years ago

But it's "for the environment." Idiots always buy into the propaganda that tell them that authoritarian crack downs are noble and good.

arcticbull20• 5 years ago

Imagine living in a civilized country that can't bring itself to ban a massive distributed Ponzi scheme with huge environmental consequences. Bitcoin alone uses about 1/10th as much energy as the entire world's concrete production. Even if it were to transition entirely to renewable energy it also generates as much e-waste as an entire first-world country.

These things actually have huge meaningful state security risks. Not too long ago the entire country of Albania got swept up in Ponzi schemes. It go so bad, they imprisoned their finance minister for trying to stop it. Then they had a civil war about it. The IMF had to airdrop in bags of money to bail them out. [1]

1997 Albania is what the maxis are working towards.

In this case the PRC not only has the moral high ground, but also is acting out of a real, rational fear of economic collapse.

If America had any sense, it would put the ban hammer down on this before it gets any worse.

[1] https://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.ht...

gfodor15• 5 years ago

It's going to look a lot less like a Ponzi scheme if/when the dollar collapses.

nightski8• 5 years ago

It doesn't even meet the basic definition of a ponzi scheme. This is pure FUD. You might not like it, but that doesn't make it something it is not. There are plenty of other things that I would consider a waste of electricity but I am not going to make doing them punishable by hard labor.

gremloni• 5 years ago

Imagine lumping all cryptocurrency into proof of work.

celticninja• 5 years ago

Because banning technology works so well.

lottin4• 5 years ago

But they said bitcoin was out of reach of governments, how is it possible a government is now banning it?

thinkingkong• 5 years ago

The bitcoin might be out of reach of governments, but the people definitely aren't.

rmdashrfstar• 5 years ago

Who’s they and how can anything be “out of reach”?

yawaworht19783• 5 years ago

I am a bit surprised the Chinese government didn't secretly force the miners to collaborate for a 51 percent attack or more to kill it off, it would likely also destroy altcoins and the whole ecosystem.

But maybe someone from China can chime in and explain how serious the enforcement of these bans will be. I have seen countries with all kinds of laws, none ever enforced.

A4ET8a8uTh02• 5 years ago

Eh.. I don't want to diminish the impact of Chinese action, but US not so long ago banned owning gold ( https://en.wikipedia.org/wiki/Gold_Reserve_Act ) by individuals. It is only recently that this got relaxed. Government can and do whatever the populace will bear.

reedjosh5• 5 years ago

Lets not bear this then. Central Bank Digital Currency is just around the corner if crypto is banned. CBDC is an authoritarian's wet dream.

Speak against the government--you're no longer allowed to transact in society.

Retroactive tax...boom, negative balance.

jumelles• 5 years ago

45+ years is “not so long ago”?

nemothekid• 5 years ago

We already have this in America, Civil Asset Forfeiture is already out of control.

FpUser• 5 years ago

"Sounds like a dystopian nightmare"

You mean something like old Reserve Act of 1934 in the US?

bananamerica• 5 years ago

If you're talking about China, you are correct. If you are talking about the United States, you are correct as well.

https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...

wcoenen• 5 years ago

I'm not sure why the title of the article focuses on mining. China had already banned mining. This was very visible as a drop in the hash rate over the summer[1].

What has been announced now (by the Chinese central bank and a bunch of regulators) is that all crypto related transactions will be banned.

[1] http://bitcoin.sipa.be/

earthscienceman• 5 years ago

There's a lot of vague language in these types of threads. What does "banned" mean? Does that mean illegal and punishable by death? Or does that mean, connections to identified crypto computing resources will be blocked by the great firewall?

cormacrelf• 5 years ago

Apart from the missing actual news (it's now also trading), what's not to understand? Banned by a government means illegal. Trading cryptocurrencies is now illegal there. Who cares how they enforce it? They will enforce it.

https://news.yahoo.com/chinas-central-bank-rules-crypto-0944...

nabla9• 5 years ago

What it means is that crypto is shut down from anything that involves bookkeeping. Banks, financial transactions, money transfers, buying stuff from kiosk, ... No legal commerce or finance.

Crypto is now purely black market currency in China.

creshal• 5 years ago

From my understanding of the announcements, Chinese companies will be banned from performing any cryptocurrency related services, transactions or exchanges, including smart contract platforms like Ethereum. No firm mention of private individuals, or what particular penalties companies would face.

But either way, it greatly limits the value of cryptocurrencies (and related concepts) in China.

dang2• 5 years ago

(Comment mentions title mentioning mining because it was posted to https://news.ycombinator.com/item?id=28642415 before we merged the threads.)

exo762• 5 years ago

Will we observe a significant hash-rate dive in near future?

epinephrinios• 5 years ago

No, miners already migrated. This is affecting Chinese holders more than anything.

eggy• 5 years ago

Blockchain, not specifically crypto currencies, are also a means to operate anonymously outside of an authoritarian government. Sure there are gotchas with remaining anonymous, but I am sure China wouldn't want a blockchain-based, mesh, peer-to-peer, or distrubuted network, that could operate outside of the Great Firewall's ability to regulate or censor it. High-power, long-range WiFi and mesh networks would be hard to control or stop with reasonable efforts.

endisneigh4• 5 years ago

It would be trivial to find the source of high-powered wifi/antennas. Consider how easy it is already for one to find the source of an unlicensed ham radio stream.

It's definitely not impossible to obfuscate and use crypto even in a country where it's banned, but it isn't that easy.

Causality13• 5 years ago

Indeed. There's a huge difference between one or several actions and habitual behavior. You can find a method to get away with anything once. Operating on a daily basis where the government only has to catch you once is far less practical.

user-the-name3• 5 years ago

No part of that needs a blockchain.

acdha4• 5 years ago

You need to think about the threat model for someone living in that kind of state:

1. Radio transmitters are by definition easy to detect: once you get identified, you are in a world of trouble because you demonstrated full knowledge that you were doing something illegal. Anything which can be used to circumvent the Great Firewall will be treated as a threat to state security even if you personally are only using it for a less serious crime.

2. Blockchains are a censor's dream: you have a full signed confession of every transaction made by the person you just compromised and a list of everyone they corresponded with. If you catch someone new and have ways to get them to talk (China has a well-honed system for this), now you have that for all of their past transactions, too. Have a few undercover agents tell people about this mesh networking app and you can quietly roll up an entire network over time while making it look like the police just happened to get lucky breaks a lot.

3. Blockchains are hard to conceal: they require huge amounts of data transfer and you have to be online at the time you make a transaction, both of which dramatically increase the challenges of trying to be covert.

All of those combine into a huge problem for using blockchains: you don't need to worry about any of that or the extra expense _unless_ you're doing something illegal. That means that simply participating is inherently risky — better hope that you don't ever make internet traffic which would show an interest in this or have someone audit the apps installed on your devices — and the costs are guaranteed to be high because everyone involved is taking on the extra risk of whatever you're doing (and the chance that you're not being completely honest about the level of risk or are compromised) leading to scrutiny and/or that you will fail your opsec in a way which provides proof of their noncompliance.

No matter what you think of the Chinese system or whether it's right, it seems like a system designed to expose its users to significant risk in addition to whatever it is that they're trying to hide.

spywaregorilla3• 5 years ago

How much BTC is likely to be held in accounts that can no longer legally trade?

gruez2• 5 years ago

AFAIK there aren't any exchanges in mainland china, so everyone there has their crypto in offshore accounts that aren't subject to such regulations.

spywaregorilla3• 5 years ago

Pretty sure it's still illegal for Chinese citizens to use them.

shiado2• 5 years ago

Some China FUD on the last Friday of the month that is an almost verbatim reprint of headlines printed a couple months ago... You surely realize the purpose of this right? Just look at all those 40k strike puts...

EGreg• 5 years ago

I don’t really understand these types of claims.

You think the CCP and central bank of China are just putting out statements to help a few foreign traders win on leveraged trades? The central planners of the economy that if fast becoming the largest in the world care a ton about some random traders in other countries? LMAO.

shiado2• 5 years ago

Oh China is definitely cracking down on crypto, what I'm pointing out is that Western financial rags print the story late on expiry day to manipulate the market.

amin• 5 years ago

I hope it all comes crashing down, so that cryptocurrencies will go back to their use of transacting instead of speculating.

javert• 5 years ago

Cryptocurrency was originally designed to be currency, not a transactional mechanism only.

If you think it through, it can't work as only a transactional mechanism, because the price won't be stable. It has to first become a big asset class with a lot of liquidity, which means it has to go through a growth phase, i.e. speculation.

crhutchins• 5 years ago

It's not just Chinese crypto traders at a loss. I think almost all crypto traders are at a loss in this state.

ejanus2• 5 years ago

Looks like something serious is cooking around Chinese economy.

kilroy123• 5 years ago

It seems to be part of an overall move to curb people from becoming too rich in China.

ejanus2• 5 years ago

Which kind of economic model is that?

frjalex• 5 years ago

One good thing to always keep in mind is that China structurally maintains the status quo of a Leninist state --- IMO, the entire reason they banned crypto is that crypto's goal --- relative anonymity, privacy, and freedom of where to move one's money --- goes directly _against_ China's closed, tightly regulated financial system. The bureaucrats at their Ministry of Finance must be absolutely appalled by the idea that one could transfer money via bitcoin easily outside China without any sort of authorization.

blueblisters• 5 years ago

I have always imagined China to have more sophisticated tools for monitoring financial flows than Soviet Russia. Crypto (at least Bitcoin) isn't all that anonymous, nor outside CCP control so long as there are exchanges and miners located inside China. For instance, there were (probably unfounded) fears that the CCP could control Bitcoin by proxy if more than 50% of the hash rate was owned by Chinese miners.

I suspect the recent crackdown is more related to a fear of uncontrolled capital flight due to regulatory changes and anticipated slowdown of the economy.

sudosysgen9• 5 years ago

I doubt it. It's not that hard to figure it out if every other capital flow is being tracked.

I'm guessing it has to do with preventing people from moving wealth out of the country.

cm21873• 5 years ago

I suspect what is triggering this crackdown is that the enforcement of capital controls is becoming more critical as more people are nervous of a financial crisis in China because of bad debt / bad banks. Need to make sure those depositors have no place to go.

Though to be honest I don't understand how bitcoin can be used for getting money out of the country. Who would be willing to accept onshore CNY in payment for bitcoin in volumes if everyone is trying to move out?

sudosysgen9• 5 years ago

Someone who needs CNY, that can then buy real goods and export them.

naveen99• 5 years ago

Probably around 80% of wealth is stored as real estate of which 60% is probably is stored as the relative proximity of people. So capital control is as simple as forbidding land from walking away and foreign countries not accepting migration of a billion people. basically a solved problem.

shadowgovt• 5 years ago

Wow, this I did not see coming.

I kind of assumed BTC mining was going to be owned by Chinese nationals within a couple years, at which point the government would nationalize it and BTC would no longer, in practice, have the promise of a distributed store of truth.

Egg on my face.

wnevets• 5 years ago

I'm curious to know how to will be spun into being good for bitcoin.

tehjoker• 5 years ago

Finally, someone is taking action against this insanity.

powerapple4• 5 years ago

"The directive, which sent Bitcoin dropping as much as 5.5%, comes as global markets grow increasingly concerned over a debt crisis involving Chinese property developer Evergrande."

5.5%???? for bitcoin it means nothing.

gonehome• 5 years ago

The odd thing about their repeated attempts to damage crypto is that it feels like a strategic miss to me.

If I was the CCP I'd try to leverage BTC (and others) as a weapon against the dominance of USD.

Instead it looks like they just want to implement their own variant that gives them total control and transparency of in-country transactions. At a minimum they could do both (ban BTC use internally, but still allow mining in the country). I must be missing something.

Their authoritarian currency does allow for some interesting things like expiring credits or instant distribution of benefits, refunds, stimulus to the public (with constraints baked in) - but the obvious negatives are pretty extreme especially with the CCP's track record.

azinman2• 5 years ago

It hard to leverage it as a hedge against USD when it can be used against you, so many miners are already in China, and no real international transactions are happening in it (oil still USD).

seaourfreed• 5 years ago

The real news: Massive problems in China's real estate markets, bad banking loans and more are uncovered. People in China are greatly moving to crypto and also moving money out of China. China works to trap them in the problems of the legacy financial system.

China declares cryptocurrency deals ‘illegal’

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