Bitcoin Forum

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As Chinese-based bitcoin exchanges plan to shut down, bitcoin investors are taking their trading elsewhere. They will now focus on broker-facilitated, over-the-counter exchanges.

Also read: Nebraska Ethics Board Allows Attorneys to Accept Bitcoin

Prior to exchange shutdown notices, most traders conducted OTC exchanges on Weechat messenger. As a result of government crackdowns on Weechat users, bitcoiners have made an exodus over to privacy-centric messaging app Telegram. A Quartz article detailed the situation:

        The favored app for arranging OTC trades was WeChat, the ubiquitous platform run by Chinese tech giant Tencent. Now brokers are moving to chat platforms operated by non-Chinese companies to keep the trades going, in response to new rules tightening controls on chat groups

A surge of traders have now moved to Telegram for its encryption protocols. They should now be able to disregard government as they continue to trade and speculate on various cryptocurrencies.
Exchange Crackdown Will not Harm Bitcoin

It appears this investor pivot to secret OTC trading, foreshadows how underground bitcoinChinese Investors to Trade Bitcoin Over-The-Counter Via Telegram trading may manifest in China. Investors and brokers will conduct trades silently, under the cover of Telegram’s encrypted darkness. In this sense, it is unlikely bitcoin or cryptocurrency will be harmed in the long term. The resiliency of the technology will emerge while under duress from the Chinese government.

Eric Zhao, the computer engineer who runs the CNLedger Twitter account echoed this sentiment, saying: “Exchanges are not what give value to blockchain assets like bitcoin. It is the intrinsic technology and numerous applications who play decisive roles.”
OTC Trading Necessary Because Chinese Authority May Block Access to Exchanges

Even though Bitcoin will survive regardless of what happens — there are a myriad of unverified reports coming out of China that authorities may block certain bitcoin sites. One document states the Network Bureau would stifle trading.

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Loosely translated, the document states the Bureau would block access to Main BTC exchanges from abroad, including limiting API access. It would also block seed node addressing.

The Chinese government would also take action. It will analyze all DNS and IP addresses, and hand in lists to the IT Bureau. The document further stated:

        Meanwhile, to prevent the domestic block nodes to sync with nodes abroad, government will monitor the communication between the domestic block node with the pool(appendix 4). In case of emergency, cut down the network of the pool. Monitor highly on the BTC network’s communication via bridge connection, TOR and VPN etc. Inform the most frequent request.

It is good to keep in mind that these reports are unverified, and they could, in part, be “fake news.” Nonetheless, it is clear the Chinese government is clamping down on cryptocurrencies, but traders appear to be unfazed as they maneuver to access underground and OTC trading networks.

https://news.bitcoin.com/chinese-investors-to-trade-bitcoin-over-the-counter-via-telegram/

At least this one has a little bit of good old investigative journalism evidence! If the final name on that listing is correct, then it means that the very original statement quoted by Caixin was erroneous too. I remember OTC and P2P being excluded from the clampdown, which should have placed Localbitcoins out of harm's way. Telegram sounds like the most logical next step, but without the escrow functionalities of LBC, I'm not sure people are going to flock to app-based exchanges just yet. 

I'm a tad sceptical about the whole thing because of this too. I don't see how they can get past this. Without escrow of some sort it's going to be pretty hopeless.

What's going to be the deal with Bitsquare? Could a Chinese person download and run it without any problems or are there certain elements which will be blocked?

I am sure that soon these Chinese can find ways and meas to continue holding and trading Bitcoin as the cryptocurrency fever is now ingrained with these people. Well, when the government is known to be good blockers there can still be ways to do the thing you do without the government under your nose. Long live, Bitcoin. This is one way we can show the whole world how unstoppable Bitcoin can be.

According to Bitsquare it will be insanely difficult to block it since Bitsquare states to be resistant to any type of interference coming from whatever central authority.

If this in the real world means that it regardless of what type of government ban/block can keep running without any problems, then it obviously will be a great tool to use in countries with such severe restrictions.

In terms of fiat, things are a bit different since you depend on the payment services to hold the fiat, and to settle the transactions. If we take that into consideration, then only crypto versus crypto trades are truly decentralized.

I am not surprised that the telegram is supported by many bots, at least 1000 bots are used if I do not remember it. China will lose again Cyrptocurrencies