Chinese government IS backing Bitcoin?!?!

[nobbynobbynoob]

Thought experiment: Suppose the Chinese government approaches the Winkelvoss brothers and say:
"Hey, we'll buy half of your Bitcoins for $1 billion (which is a crappy price), but in return we'll officially safe guard Bitcoin as a currency."
If you were the Winklevoss, would you take the deal?

I don't know, but thanks for reminding me that 20k USD/BTC is a "crappy price".

[theonewhowaskazu]

If China built Bitcoin they would _never_ put a Japanese name on it. They are not like super good ol friends those two.

If they didn't want people to know its them, they might, just so people would think what you just said.

[DoomDumas]

Could this be Bitcoin and the thinking behind China's embrace of Bitcoin?

Doubt it. Bitcoin IMO has the Potential, but it isn't nearly big enough to even be on the Table.

They are probaly thinking more in the direction of a currency like the Euro only bigger. The Worldo 

Not big enough ??

Look at the hash power..  also there already billions maybe trillions of satoshi in circulation.

How this can not be big enough ?

Bitcoin is digital gold, remove the need of fiat currency and paper gold..

I dont know if it will be used by chinese govt, but imo, it's the best option availlable so far

[Vycid]

Thought experiment: Suppose the Chinese government approaches the Winkelvoss brothers and say:
"Hey, we'll buy half of your Bitcoins for $1 billion (which is a crappy price), but in return we'll officially safe guard Bitcoin as a currency."
If you were the Winklevoss, would you take the deal?

The Chinese government is pretty crafty, they tend not to pay over 100x the market price for things.

[waxwing]

Thought experiment: Suppose the Chinese government approaches the Winkelvoss brothers and say:
"Hey, we'll buy half of your Bitcoins for $1 billion (which is a crappy price), but in return we'll officially safe guard Bitcoin as a currency."
If you were the Winklevoss, would you take the deal?

The Chinese government is pretty crafty, they tend not to pay over 100x the market price for things.

It's not that simple. The market price for 1BTC may be $145 or whatever, but the market price for 500,000 BTC is far higher - because there just aren't that many offers on the world's order books. If you vacuum up the entire book, and then vacuum up all the offers that appear while you're doing that ... then the theoretical price is infinity since right now nobody is offering that much.

If they did indeed want to buy the entire Winklevoss stash, then the Winklevii could certainly reasonably demand a number far higher than the current market price.

This issue is called liquidity, and it's the reason why there aren't more very rich people piling into bitcoin yet (surely some of them see its potential).

[phillipsjk]

2009 is also when Bitcoin launched.  

Coincidence?

Thats the greatest Bitcoin Conspiracy theory yet.

EDIT: and maybe Satoshi is the Central Bank of China.

I like this theory better than the CIA theory (my previous favorite theory)

[hulk]

Sell while its high, China are famous for buy and dump strategy...

[Johnny Bitcoinseed]

Bitcoin shows the world that governments are no longer needed when it comes to currency.

And that, my friends, is the beauty of Bitcoin.

[Vycid]

Thought experiment: Suppose the Chinese government approaches the Winkelvoss brothers and say:
"Hey, we'll buy half of your Bitcoins for $1 billion (which is a crappy price), but in return we'll officially safe guard Bitcoin as a currency."
If you were the Winklevoss, would you take the deal?

The Chinese government is pretty crafty, they tend not to pay over 100x the market price for things.

It's not that simple. The market price for 1BTC may be $145 or whatever, but the market price for 500,000 BTC is far higher - because there just aren't that many offers on the world's order books. If you vacuum up the entire book, and then vacuum up all the offers that appear while you're doing that ... then the theoretical price is infinity since right now nobody is offering that much.

If they did indeed want to buy the entire Winklevoss stash, then the Winklevii could certainly reasonably demand a number far higher than the current market price.

This issue is called liquidity, and it's the reason why there aren't more very rich people piling into bitcoin yet (surely some of them see its potential).

The differential is not going to be more than 10% of spot. The Winklevii are not the only guys holding large amounts of Bitcoin.

Remember too that liquidity is a double-edged sword; if an early adopter wants to get out, or an ASIC mining company wants cash, they can't dump all their coins at once for the current market price.

So an eager buyer just needs an eager seller and they can end up pretty damn near spot.

Alternatively, you can just manipulate the market. Accumulate slowly over large periods of time, then aggressively dump some of the accumulated coins at the scariest moments possible before continuing to accumulate.

Kinda like how China is increasing their gold reserves, actually.

http://www.zerohedge.com/news/2013-10-13/chart-day-china-imports-over-2000-tons-gold-last-two-years

[cowandtea]

Bitcoin shows the world that governments are no longer needed when it comes to currency.

And that, my friends, is the beauty of Bitcoin.

Well, if governments are no longer needed then we need someone to pay policeman's salary, street cleanup and etc. Who will be doing those job if there is no government?

[TheButterZone]

People.

[bg002h]

Bitcoin shows the world that governments are no longer needed when it comes to currency.

And that, my friends, is the beauty of Bitcoin.

Well, if governments are no longer needed then we need someone to pay policeman's salary, street cleanup and etc. Who will be doing those job if there is no government?

There was a time, in the us at least, when there was private services for things like fire fighting...the fact that governments supply this service at high cost under monopoly conditions and accept payment only in paper does not intrinsically make the government useful or irreplaceable.

[crazy_rabbit]

Bitcoin shows the world that governments are no longer needed when it comes to currency.

And that, my friends, is the beauty of Bitcoin.

Well, if governments are no longer needed then we need someone to pay policeman's salary, street cleanup and etc. Who will be doing those job if there is no government?

There was a time, in the us at least, when there was private services for things like fire fighting...the fact that governments supply this service at high cost under monopoly conditions and accept payment only in paper does not intrinsically make the government useful or irreplaceable.

There will be a government. There was a government before income tax for example, and if that ever stops (it won't) there will be a government after too. They can tax you for breathing air you know. They don't HAVE to have their hands on your money.

[darkmule]

There was a time, in the us at least, when there was private services for things like fire fighting...the fact that governments supply this service at high cost under monopoly conditions and accept payment only in paper does not intrinsically make the government useful or irreplaceable.

You picked a particularly terrible example.  Under this idiotic regime, hose connections were incompatible, because they were proprietary, and when a particularly large fire would have required the assistance of other departments, they were unable to do so because they couldn't even connect their hoses to the hydrant at the scene of the fire.

Sometimes, these fires were started by "uninsured" houses.  Because they hadn't paid for the service, of course, the private service wouldn't come to their assistance.  So when one of these went wild, you could very well end up with your house burned down even though you had paid for the service, because your neighbor had not.  And when the fire was particularly large, other local fire services with incompatible equipment could not assist.  (Actually, to some extent, incompatible hose couplings still exist, mostly an artifact of the past situation, but FDs generally cooperate to have adapters available when this arises.)

So in such a regime, I could have fire service, but my neighbors could not, and my property value would still be substantially damaged if neighboring homes burned down, blighting the neighborhood.  This is assuming my house doesn't end up burned down itself because of the fire spreading from unprotected houses.  To get the full benefit of such a regime, I would have to pay for protection for all my neighbors, clearly unfair to me and probably beyond my means.

This is why things like fire protection, police protection and national defense are considered "public goods."  There is no way to exclude someone who refuses to pay from, for instance, being protected from foreign invasion, so someone able simply to refuse to pay would be a free rider on the generosity of others.  Conversely, the refuseniks in a fire protection regime cause damage even to those willing to pay, who then do not receive the benefit of what they purchase.  

Despite the fact that the cost is modest for a reasonable level of fire protection on the individual level, it would be priced exorbitantly if a single or a few individuals had to foot the bill for the protection of all, which is necessary for any effective protection.

I have never seen a rational response from a libertarian extremist as to how to address the public goods problem, or how it would be a good thing to let entire cities burn to the ground because of the refuseniks, who presumably would have these very extremist libertarians among their number.

[David Rabahy]

If I live in a densely populated area then of course shared services make a ton of sense.

If I live in a sparsely populated area then of course shared services make way less sense.

A community (not an entire nation per se) could be responsible for many shared services.  Only a nation can reasonably be responsible for certain shared services, e.g. defense.

It seems very reasonable that adjacent communities might cooperate on some shared services.

Individuals would choose which community they want to reside in, in part based on the quality of shared services.

Perhaps these seem like simple truisms, but too often I observe folks assuming the only answer is one central government providing all shared services.  Perhaps the unspoken assumption is economy of scale?  What gets forgotten is the larger the government the greater the risk of mismanagement and corruption.

[tom.hashemi]

There was a time, in the us at least, when there was private services for things like fire fighting...the fact that governments supply this service at high cost under monopoly conditions and accept payment only in paper does not intrinsically make the government useful or irreplaceable.

You picked a particularly terrible example.  Under this idiotic regime, hose connections were incompatible, because they were proprietary, and when a particularly large fire would have required the assistance of other departments, they were unable to do so because they couldn't even connect their hoses to the hydrant at the scene of the fire.

Sometimes, these fires were started by "uninsured" houses.  Because they hadn't paid for the service, of course, the private service wouldn't come to their assistance.  So when one of these went wild, you could very well end up with your house burned down even though you had paid for the service, because your neighbor had not.  And when the fire was particularly large, other local fire services with incompatible equipment could not assist.  (Actually, to some extent, incompatible hose couplings still exist, mostly an artifact of the past situation, but FDs generally cooperate to have adapters available when this arises.)

So in such a regime, I could have fire service, but my neighbors could not, and my property value would still be substantially damaged if neighboring homes burned down, blighting the neighborhood.  This is assuming my house doesn't end up burned down itself because of the fire spreading from unprotected houses.  To get the full benefit of such a regime, I would have to pay for protection for all my neighbors, clearly unfair to me and probably beyond my means.

This is why things like fire protection, police protection and national defense are considered "public goods."  There is no way to exclude someone who refuses to pay from, for instance, being protected from foreign invasion, so someone able simply to refuse to pay would be a free rider on the generosity of others.  Conversely, the refuseniks in a fire protection regime cause damage even to those willing to pay, who then do not receive the benefit of what they purchase.  

Despite the fact that the cost is modest for a reasonable level of fire protection on the individual level, it would be priced exorbitantly if a single or a few individuals had to foot the bill for the protection of all, which is necessary for any effective protection.

I have never seen a rational response from a libertarian extremist as to how to address the public goods problem, or how it would be a good thing to let entire cities burn to the ground because of the refuseniks, who presumably would have these very extremist libertarians among their number.

+1 Nice to see a solid response to some of the libertarian silliness flying around

[jbreher]

I am sorry to say that I find darkmule's rhetoric somewhat silly. We currently have standards for firefighting equipment. Where is the economic incentive to produce or purchase equipment that is incompatible with this existing infrastructure? Answer - there is a clear DISincentive to do so.

I suppose the response to this point would be that it took governments to give us these standards. Which, while being a rebuttal, is a very weak one.

Where there is an economic incentive to standardize, standards will emerge.

As a counterexample, I would like to point out that no government owns the internet. Even something as simple as the SATA protocol, upon which most current computers are dependent, has been developed by the free market, not the government.

[arklan]

Phone chargers. Far as i know, only apple uses something besides the mini usb one. Took forever to standardize, but did so without government.

[darkmule]

I am sorry to say that I find darkmule's rhetoric somewhat silly. We currently have standards for firefighting equipment.

What rhetoric?  I just listed some facts.  Sorry you find them unpalatable.

Do you think these standards magically just originated from the ether?  Government regulations enforced them.

Where is the economic incentive to produce or purchase equipment that is incompatible with this existing infrastructure? Answer - there is a clear DISincentive to do so.

So why is that EXACTLY what happened when these standards were left to private enterprise?  

ETA:

I suppose the response to this point would be that it took governments to give us these standards. Which, while being a rebuttal, is a very weak one.

Yes, other than being true, it's terribly weak.

[jbreher]

Where is the economic incentive to produce or purchase equipment that is incompatible with this existing infrastructure? Answer - there is a clear DISincentive to do so.

So why is that EXACTLY what happened when these standards were left to private enterprise?  

Time moved forward, experience was gained, pockets of compatibility became regions of compatibility became universal compatibility. Government regulation or no, this would have occurred. That's not the work of government, that's the experience that comes from time.

Are you seriously arguing that, absent the edicts of government, all fire crews would abandon the standards that currently are in existence?

So lets talk about how governmental edict was responsible for universal 802.11 compatibility, shall we? (hint: all government did here is restrict the frequencies that could be used).

ETA: how 'bout the guiding hand of government being responsible for bitcoin?