We should have a loans history, to be able to check how much time each of them did last, how much interest each of them generated, etc.

In the UK you can get a chinese currency bank account with Bank of China (there are 4 branches here, 1 an hour from where I live).  But I'm uncertain if you could withdraw from BTC China (directly or via tenpay) to it.  Is this possible in the USA?  

Failing that, if you could just uproot, quit your job and live anywhere for a year to arb bitcoin would Beijing be THE optimal place to do it?  The biggest arbs seem to be between BTC-e and BtcChina, is it easy to fund BTC-e from China?  

All these Chinese exchanges with 0% fee. The result... A game to shake people down.

Running a BTC exchange is a risky business. So are BTCChina et al a charity? Heck no, they're likely all making lots of money -- the future of BTC be damned.  

I hope investors can see the huge information asymmetry with big players they have in this giant game of chicken. The only winners can be the biggest holders already.

With 0% fee, exchanges can only operate fairly if they publish more data --- e.g. Volume per user. Without this, you may as well be playing Russian Roulette.

This should be abundantly clear today. The question is, where do we go from here? Because this is not sustainable at all. Smaller players will lose all.

Smarter transaction fees

Today, transaction fees are hard-coded into the Bitcoin-Qt/bitcoind wallet software, and the rules surrounding those fees are a collection of heuristics that evolved over the last four years. In short, the current fee-handling code is a complicated mess that will stop working as soon as transaction volume doubles a couple of more times.

In theory, it should be simple: transaction fees should to be set by a give-and-take between the people creating transactions (who want to pay as little as possible) and the people validating and storing the transactions (miners, who would like to be rewarded with higher fees).

And the code that miners are using today to select transactions is simple: they fill their blocks with the highest fee-per-kilobyte transaction (and highest priority transactions, if they choose to set aside some space in their blocks for free transactions).

I’ve been working on teaching the wallet code to estimate how low a fee (or priority) a transaction needs, at the moment it is sent, to be accepted by miners and included in the next block or three. The estimates are based on watching transactions as they are broadcast on the network and keeping track of which of those transactions are accepted into blocks.

The danger with estimating transaction fees is miners have an incentive to try to game the estimate to make transaction fees higher. For example, if the estimate was based on the average transaction fee for all transactions in the last N blocks, miners could add very-high-fee pay-to-self transactions to the blocks that they mine to drive up the average. However, by only considering fees for transactions that have been broadcast on the network that threat is eliminated– miners could broadcast very-high-fee pay-to-self transactions, but would end up paying those high transaction fees to other miners. The transaction estimation code also uses median transaction fees, not averages, to make it much harder for a minority of transactions to influence transaction fees.

If most of the miners got together and agreed to all broadcast lots of high transaction fee transactions they could succeed in driving up the average transaction fee… but that isn’t going to happen because it would be easy for miners to “free ride” by breaking the agreement and just collecting the higher transaction fees for themselves.

All of the above will work well for fully-validating software like Bitcoin-Qt/bitcoind. More thinking is needed to figure out how lightweight simplified payment verification software (like Multibit) can better estimate transaction fees, because today they can’t calculate how much transaction fee each transaction is paying.

they have an ICP

BTCchina is licensed by the Government of China.  People who know about doing business in China will know what I am talking about.