Poll: Fate of bitcoins in China

[Lloydie]

Where is the answer "Bitcoin causes a civil revolt in China and the country is thrown into anarchy whilst fighting for a full democracy" 

Good point. Duly added.

[aminorex]

The true situation is not reflected in the poll.  That makes the poll rather ludicrous.  Bitcoin is being traded in China, and will continue to be traded in China.  The PBOC has determined that it is to be treated pari paribus with other commodities such as copper, oil, or rice.   Exchanges are a high growth business.  Whenever there is a high growth business in China, well-connected family members of powerful government figures muscle in.  That's why okcoin and btcchina has their deposits cut off.  Those businesses will either fail, or be converted to the follow the norms for commodity exchanges in China.

[Azeh]

The true situation is not reflected in the poll.  That makes the poll rather ludicrous.  Bitcoin is being traded in China, and will continue to be traded in China.  The PBOC has determined that it is to be treated pari paribus with other commodities such as copper, oil, or rice.   Exchanges are a high growth business.  Whenever there is a high growth business in China, well-connected family members of powerful government figures muscle in.  That's why okcoin and btcchina has their deposits cut off.  Those businesses will either fail, or be converted to the follow the norms for commodity exchanges in China.

I think it's wishful thinking to think China will recover.  I think it is game over in China.  I've been here 4 years now and have a decent idea the way the government operates. 

First, they seemed open and friendly to Bitcoin.  A tactic only, while behind the scenes they viewed it as a threat and tried to determine how to move against it.

Second, they released a vague and general statement through the PBOC banning financial institutions from involvement in Bitcoin, while still stating individuals are free to own it.  Again, on the surface appearing accepting of Bitcoin, but those that understand how government works here, reading between the lines as a warning shot to get the hell out.  My Chinese girlfriend actually read the press release and warned me in advance that Bitcoin was now being taken seriously by government.

Not long after, a secret meeting was held with payment processors to stop all funding of exchanges.  Again, moving in the direction of a complete Ban, but still leaving the door open for individuals to trade bitcoin and withdraw back to CNY.

Next step???  I believe they will set a time banning financial institutions from allowing CNY withdrawal.  The government is just corralling the herd.  Once this happens, a stampede to get money off chinese exchanges happens.  Price falls dramatically.

Result:  Bitcoin still legal to hold and trade just as the government initially had said.  However, essentially worthless for the average Chinese without a foreign bank account.

[Lloydie]

The true situation is not reflected in the poll.  That makes the poll rather ludicrous.  Bitcoin is being traded in China, and will continue to be traded in China.  The PBOC has determined that it is to be treated pari paribus with other commodities such as copper, oil, or rice.   Exchanges are a high growth business.  Whenever there is a high growth business in China, well-connected family members of powerful government figures muscle in.  That's why okcoin and btcchina has their deposits cut off.  Those businesses will either fail, or be converted to the follow the norms for commodity exchanges in China.

You could be right but for now I can't imagine china allowing a freely convertible currency. That could be devastating for the housing bubble there.

[R2Pleasent]

China's out for the foreseeable future.  It's fairly obvious why they would not allow Bitcoin.  They have tons of currency controls, Bitcoin bypasses them.  If they wanted these controls to be bypassed, they could create their own system, and earn money/have complete control over it.  No need to use Bitcoin. 

We also cannot say 100% who created Bitcoin.  Although the NSA theory is at the moment simply a conspiracy theory, do not rule such a thing out.  There is no other organization with more research into cryptography / wealth transfer worldwide.  If the NSA believed such a payment system would catch on, they would have no problem launching it.  As we can see with alt-coins, there is a huge first-mover advantage in crypto-currency.  BTC has nearly 20x the market cap of next currency (LTC), and is the only crypto with true utility beyond speculation.

Despite the persistence of underground markets to use BTC for transactions (Silk Road et al), the government seems content with Bitcoin.  We must ask ourselves why?  They shut down e-Gold and LR simply for the fact that people were using it to conduct illicit activity.  With these shutdowns, it was quite obvious that centralized payment systems were prone to government intervention.  One could safely assume that these shutdowns would have led new thinkers towards a decentralized method of exchange. 

If the NSA believed that a decentralized currency was eventually going to hit the landscape, what other choice would they have but to make their own?  A true decentralized currency would be very difficult to shut down, even with an outright ban in the USA.  The ban works well against people like you and me speculating on prices, or buying a baseball cap through Bitpay, but really does nothing to prevent illegal activity.  For those willing to take all the measures required to transact on dark markets, what's the stretch in buying your bitcoins through a localbitcoin-type of exchange (AKA decentralized).

Long story short, if the NSA came up with the idea for crypto-currency, they would have every incentive to create a crypto-currency.  Am I saying this hypothetical situation is correct?  Of course not.  But this is a conspiracy theory which is always worth thinking about.

[Lloydie]

The poll indicates most people believe Btcs will survive via "well connected" exchanges or cash only exchanges. Based on the above, for me, btcs will most likely survive in china. This could imply economic volatility in china down the track as people observe continued Btc trading in china. IMHO, investors in china will eventually pile into btcs as a store of value once again.