Did China just legalize Bitcoin, clarify regulation, for its free market use?

[Gabi]

You can't use bitcoin to buy or sell anything in china. That is the important part.

[1714994195]

1714994195

[1714994195]

1714994195

[Chris001]

So how are other businesses responding in China? Does anyone have any info on that? Can a business accept bitcoin if they choose?

[TippingPoint]

Romania was not built in a day.

[AnonyMint]

All of the analysis thus far and including my prior post, is myopic and ignores the ecosystem networking effects.

The Chinese will own 10s or 100s of $billions perhaps even $trillions of value stored in BTC. Do you really think the market is not going to respond and try to market something to that huge capital base?

For example, the Chinese could go on vacation abroad and spend their BTC.

Or they could buy and sell abroad over the internet, e.g. such as for their homes abroad or running business virtually abroad. Especially they become wealthy investing in BTC.

Also the anonymous altcoin comes along, they leverage their BTC into that.

China is desperate to grow the consumer share of their economy because as http://pettis.com has pointed out, their economy will collapse if they don't. Do you really think they will allow all that consumer business to go abroad? No. The wall is coming down. China is transforming.

Etc.....

China can't put the free market use of Bitcoin back in the bag.

[QuestionAuthority]

Help me understand this China situation.

The Chinese government ruled that Bitcoin can not act as a currency?
Bitcoin cannot be used to purchase goods and services?
The exchanges can still operate but they cannot exchange for fiat because that is now illegal?
Haven't they just turned Bitcoin into Yu-Gi-Oh trading cards?

[AnonyMint]

Help me understand this China situation.

The Chinese government ruled that Bitcoin can not act as a currency?

Correct. But they have also ruled that Chinese can sell BTC for RMB. And RMB can be used to pay as a currency.
 

Bitcoin cannot be used to purchase goods and services?

Where? BTC can be spent by Chinese internationally without needing to be there. See my prior post immediately before yours.

Inside China, Chinese can sell BTC for RMB and hand over the RMB. I postulate this can even be done in real-time with the click of a button.

The exchanges can still operate but they cannot exchange for fiat because that is now illegal?

Incorrect. The exchanges can have bank accounts, the banks just can't directly deal in BTC.

The banks never see any BTC, they only see RMB. The exchanges see RMB and BTC.

Haven't they just turned Bitcoin into Yu-Gi-Oh trading cards?

Not even remotely close to that conclusion. Entirely opposite. Bitcoin is blasting off in China.

[QuestionAuthority]

Help me understand this China situation.

The Chinese government ruled that Bitcoin can not act as a currency?

Correct. But they have also ruled that Chinese can sell BTC for RMB. And RMB can be used to pay as a currency.
 

Bitcoin cannot be used to purchase goods and services?

Where? BTC can be spent by Chinese internationally without needing to be there. See my prior post immediately before yours.

Inside China, Chinese can sell BTC for RMB and hand over the RMB. I postulate this can even be done in real-time with the click of a button.

The exchanges can still operate but they cannot exchange for fiat because that is now illegal?

Incorrect. The exchanges can have bank accounts, the banks just can't directly deal in BTC.

The banks never see any BTC, they only see RMB. The exchanges see RMB and BTC.

Haven't they just turned Bitcoin into Yu-Gi-Oh trading cards?

Not even remotely close to that conclusion. Entirely opposite. Bitcoin is blasting off in China.

Well, if that's all true then I don't understand what everyone is worried about.

[AnonyMint]

Well, if that's all true then I don't understand what everyone is worried about.

Yeah that is why I started this thread.

[Mjbmonetarymetals]

This article says Bitcoin can be used by businesses 

http://www.nationmultimedia.com/opinion/Bitcoin-in-China-30222160.html

[AnonyMint]

This article says Bitcoin can be used by businesses  

http://www.nationmultimedia.com/opinion/Bitcoin-in-China-30222160.html

Notice he said "comply with usual regulations" and "can't be used in settlement".

So BTC probably can't be accepted as business payment except when converted to RMB, as I explained upthread. The recipient could turn around and re-purchase BTC. Appears the government wants to know the identities and track everything, but there is nothing stopping someone from enabling effectively payments in BTC via a "real-time" roundtrip through RMB and the two bank accounts, although there probably isn't much demand just as there isn't much demand to use BTC as currency any where in the world right now.

BTC as a currency is mostly a novelty at this point all over the world and useful for doing semi-anonymous activities.

This can change as clever people find uses of it as a currency.

[AnonyMint]

What is happening here is that Bitcoiners think Bitcoin is a currency but we've already proved this is impossible unless the government makes it legal tender.

Only an altcoin with strong anonymity could be a currency without being legal tender, because it wouldn't be taxed by those who skirted the law with the anonymity. (note I am not advocating anything, just speaking factually).

And note Bitcoin even when used with mixers, altcoins, Tor, and a VPN is not assured anonymity. I have explained why, but rather than explain it piecemeal, I will soon publish a whitepaper on this.

Thus the Bitcoiners erroneously think that "free market use" requires it to be a currency. That is why 27 of them voted "No" which is the factually incorrect answer.

Bitcoin is now legal in China to be used for everything except as a currency, because only legal tender is allowed to be currency and this applies in every country on planet earth today.

So the Bitcoin market has some psychological adjustments to make. And there likely will be competition coming in Bitcoin ecosystem, e.g. Litecoin and others even more like a Bitcoin 2.0.

Overall the cryptocurrency ecosystem is advancing, and Bitcoin is not the only component of the ecosystem. Bitcoiners will have to go through a mental adjustment process on this fact.

Thus referring to my prior post, China has just legalized this ecosystem and we go to work now on anonymity and others things to advance it.

While the govenments and powers-that-be are likely working on the plans of how to morph Bitcoin into a the Technocracy electronic currency tracking system they want.

All of the analysis thus far and including my prior post, is myopic and ignores the ecosystem networking effects.

The Chinese will own 10s or 100s of $billions perhaps even $trillions of value stored in BTC. Do you really think the market is not going to respond and try to market something to that huge capital base?

For example, the Chinese could go on vacation abroad and spend their BTC.

Or they could buy and sell abroad over the internet, e.g. such as for their homes abroad or running business virtually abroad. Especially they become wealthy investing in BTC.

Also the anonymous altcoin comes along, they leverage their BTC into that.

China is desperate to grow the consumer share of their economy because as http://pettis.com has pointed out, their economy will collapse if they don't. Do you really think they will allow all that consumer business to go abroad? No. The wall is coming down. China is transforming.

Etc.....

China can't put the free market use of Bitcoin back in the bag.

[AnonyMint]

Hey "No" voters 

You lose.

http://www.coindesk.com/bitcoin-china-statement-interpretation/

Indeed, the notice has not prevented companies like yesbtc, founded by an ex-VP from Tencent ($111bn market cap), from operating a platform that allows users to post merchandise for sale to denominate and guarantee those transactions.

After the release of the notice, yesbtc’s CEO Xin Tang was quoted saying that all bartering services are legal. In addition, numerous independent merchants are adding or or continuing to accept bitcoin as a form of payment.

At the time of writing, there are 320 products listed on Taobao (China’s largest e-commerce platform with transaction volume exceeding $140bn USD annually) that can be purchased with bitcoin.

Typing in ‘bitcoin payment’ will trigger common search terms as suggested by the Taobao search engine of ‘bitcoin payment sale’, ‘supports bitcoin payment’ or ‘Can [use] bitcoin to pay’. A search for ‘goods’ yields results ranging from wine to cell phone accessories, cosmetics, luxury bags and sex toys:

[AnonyMint]

If anonymity is not assured for most users, then the anonymity is useless for ANY user.

It isn't FUD.  

It's real, alipay and the other payment providers and financial institutions are not allowed to deal with the bitcoin exchanges anymore.

I told you guys the legal document was open for interpretation.

https://bitcointalk.org/index.php?topic=358368.0;all

Financial institutions deal with currency, and the Chinese government wants to keep it that way.

Bitcoin Exchanges and related companies deal with Bitcoin, and the Chinese government wants to proceed this way.


It's only clarification of separation between THESE businesses, not Bitcoin in general.

Agreed. A big part of the motivation is probably to stem potential capital flight out of China via bitcoin. Not there was likely much of that going on, but the gov probably wants to get out ahead of matters. Which means eliminating layers of financial intermediaries that could obscure identity (hence why "payment processors" might not be allowed to interact with bitcoin exchanges, but banks are ok).

All in all, it will probably indeed dampen the mania to some degree, but it's by no means as hostile as many are making it out to be.

Bingo!

Good to see you all are starting to understand finally.

For the record, we can fully expect governments everywhere to demand the equivalent of AML/KYC, which is more or less what this China action likely amounts to (though more rigidly). That AML/KYC status-quo permeates the global financial system; not just the US.

Yes and they will collect capital gains and/or VAT taxes on Bitcoin appreciation as an investment even if you are trying to use it as a currency (medium-of-exchange), thus it can not be a currency.

But developers of altcoins will rise to the opportunity and create truly anonymous coins. Anoncoin isn't it. Bitcoin isn't it. I will soon publish a whitepaper to explain why.

In short, you need to understand that Chaum mix-nets (e.g. Tor) are vulnerable to timing attacks, and even honeypotting given only 3 hops. They NSA and spy agencies in each country are likely still able to track your identity much of the time. And VPNs are likely all controlled/backdoored/hacked/rooted by the NSA. And exchanging through mixers and altcoins does not obscure your IP address no matter how many times you do it. Also even across these proxies, your identity is tracked in other ways such as browser plugins trojans, cookies, patterns of internet uses such as favored search terms, facbook et al tracking the way you type, etc..

Even if you are one of the lucky few who manages to keep your anonymity assured by careful mix of the above methods, the point is the majority will not. And thus it is very simple for the government to make your anonymous coins practically unspendable and useless. The government simply sends a tax bill and put criminal liability for all activity on a coin since mining until present, until those non-anonymous coins holders (or former holders) can provide the identity of whom they bought from and sold to.

Thus all users will become afraid and only accept coins and sell coins from those who provide their complete identity. Thus only a coin with widespread assured anonymity would be able to become a currency and remain immune to government control.

So clearly you can see that you never will have anonymity with Bitcoin nor any current altcoins. Thus Bitcoin and the current altcoins can never be currencies (unless the governments take them over somehow and make them legal tender), and the government will essentially control them.

Note one means anonymity I proposed thus far are a new way to do physical crypto-coins.

[AnonyMint]

click the link on this quote to see how this relates to this thread.

And for those who kept quoting my post and writing other phony things, that's not even part of the discussion in the other thread. The legal document was open for interpretation and it seems it is skewed towards supporting PBOC policies.

This is not aimed at the post I'm quoting.

When are you all going to get a fscking clue!

The powers-that-be in all countries are pulling us towards a Technocracy where they will tax and track everything.

The lack of assured anonymity in current crypto-currencies is how they are able to accomplish this 666 tracking result.

Bitcoin is part of the plan to bring us to this tracking result. It is not our savior rather it was planted to suck us in.

It is up to us if we want to grab the moment, and make an anonymous crypto-currency that will defeat the global plan.

[AnonyMint]

http://blog.mpettis.com/2013/12/the-politics-of-adjustment/#comment-6151

There is a very remote, alternative wildcard possibility. That a completely anonymous form of currency similar to but significantly improved from Bitcoin runs roughshod over China's capital controls and deposes the existing political system into chaos.

If these words end up prophetic it won't be coincidence but rather from sitting in the driver's seat and changing the world from thy keyboard.

[AnonyMint]

Hey "No" voters, China still hasn't made it illegal to trade Bitcoin as a commodity. They haven't ruled that exchanges can't have bank accounts and thus users can still continue to send RMB in and out of exchanges.

Third party payment providers are not banks and they are not allowed to interact with exchanges, because the Central Bank can't track identities as efficiently through them as they can through the state-owned banks.

So how can you vote "No" given to "Did China just legalize Bitcoin, clarify regulation, for its free market use?" when I made it clear that "for its free market use" should be taken to mean as commodity and not as a legal tender.

Also I have documented that everything that is not legal tender is never currency in any country on earth, because capital gains and/or VAT taxes are due on changes in the value of non-legal tender when using them as a medium-of-exchange.

So what is in your tiny brains "No" voters? Are you just too lazy or stoopid or lacking the ability to do logic?

P.S. I suspect the "No"  vote is composed of those who don't like what I have to say in other threads. Because I point out how stupid they are. This is an emotional vote, and they are entirely ignoring the logic of the question. These people deserve to perish.

[semaforo]

      The real question now is why this move is in China's best interest.

   

[AnonyMint]

     The real question now is why this move is in China's best interest.

Because they can't stop it. The best they can hope for is to control the identities of whom is trading in Bitcoin, so they maintain some semblance of control. By legalizing it, they pull many into using exchanges and providing identity. At least they get more information about what is going on.

Otherwise they push it into the underground economy that they can't control and they can't get complete information about.

As I made clear upthread, the biggest weakness of Bitcoin is that if most of the users are not anonymous, then anonymity is effectively lost for everyone. Thus getting most users to transact through an exchange and bank account is the most effective strategy for China's elite.

Why is China ground zero for mining when the ROI is not greater than holding BTC itself?

Because it is the way to get BTC without giving your identity and to side-step capital controls. You can sell these coins privately at a premium to those who need to circumvent capital controls. An underground economy develops. Yet who has access to those with ASICs farms which suck immense electricity? The elite! So they get to skirt the new law while the masses get sucked into AML and KYC.

Now imagine a CPU-only altcoin comes along with very strong anonymity. Checkmate to China's elite. Very good for China's masses.

It is coming soon.

[semaforo]

P.S. I suspect the "No"  vote is composed of those who don't like what I have to say in other threads. Because I point out how stupid they are. This is an emotional vote, and they are entirely ignoring the logic of the question. These people deserve to perish.

  I voted no because the wording says both legalize bitcoin and clarify regulation. To legalize in extreme would be complete deregulation of all parties right to engage in business with bitcoin, just like legalizing cannabis for medical purposes means legalizing it, but also reaffirming that it is illegal for non-medical users. So since the question is so general, no is really the safer answer, although with a little more specificity yes is.

    Just saying, while insulting all of the no voters may make you feel good, it is probably unnecessary and unhelpful. However, thankfully this thread does contain some useful information if you can overlook the ridiculous ego battles.

[AnonyMint]

P.S. I suspect the "No"  vote is composed of those who don't like what I have to say in other threads. Because I point out how stupid they are. This is an emotional vote, and they are entirely ignoring the logic of the question. These people deserve to perish.

  I voted no because the wording says both legalize bitcoin and clarify regulation. To legalize in extreme would be complete deregulation of all parties right to engage in business with bitcoin, just like legalizing cannabis for medical purposes means legalizing it, but also reaffirming that it is illegal for non-medical users. So since the question is so general, no is really the safer answer, although with a little more specificity yes is.

    Just saying, while insulting all of the no voters may make you feel good, it is probably unnecessary and unhelpful. However, thankfully this thread does contain some useful information if you can overlook the ridiculous ego battles.

No the question is not general. I made that very clear in the OP and the first few posts of the thread.

I am insulting those who don't read, because they are insulting my effort.

The free market use of Bitcoin in every country on earth is not legal tender. Ditto now in China.

You fools are under some delusion that Bitcoin is a currency in other countries. I explained upthread that due to anonymity problem and the tax problem, Bitcoin is not a currency any where and can't be.