Staff from PBC suggests taking control of bitcoin network.

[SgtSpike]

What was the context of the statement? Is that their official website?

It's a paper from <<Chinese Credit Card>> magzine,
the author is working for PBC,  low-level class officer.



http://www.cnki.com.cn/Article/CJFDTotal-XYKZ201110018.htm

@harvey

Yes, context is similar to taking paper from Microsoft Research as official statement of Microsoft's interest in bitcoin. Go ahead and tweet out a distorted news item, though.
Propagating false messages is much easier when the source material is Chinese. Any trumped up story you come up with may be cited and re-reported elsewhere.

It'll eventually turn into "Chinese Government Abhorred by Virtual Currency - Plans to Take it Over Within A Week"

[P4man]

Very well researched paper for an outsider but he made 2 obvious mistakes:
1. He repeated stressed that Bitcoins offers total anonymity and is completely untraceable.

Which arguably is true if you take proper precautions (mixing your coins, tor, etc).

2. Failed to mention GPU mining and failed to realize that CPU mining, even with super computers, is not cost-effective.

Actually China already has a few supercomputers with GPUs. IIRC the current ones are all nVidia based, so I dont know how effective they will be,  but as a forward looking statement its certainly true that its feasible for a state player (particularly one like China). Also the cost of developing an asic for bitcoin mining is on the order of a few million $, thats pocket change for a country like China (and perhaps useful for other stuff too); if they do that, they could outhash the rest of us in a blink of the eye.

I dont expect anything of the sort will ever happen, but its an interesting thought experiment to imagine a scenario were nation states are competing for control of bitcoin .

[damnek]

What else is discussed in that article? It seems quite a bit longer than just those few statements.

[cunicula]

What else is discussed in that article? It seems quite a bit longer than just those few statements.

It's an intro to bitcoin. Overall, one can thank the writer for some good press. I just hope next time he? finds a more prominent outlet than Chinese Credit Card Magazine.
Here are translated headings.

一、比特币概述 Outline of Bitcoin
1. 什么是比特币比特币  What is Bitcoin
2. 如何获取比特币 How to Get Bitcoin
3. 如何消费比特币 How to Spend Bitcoin
 二、比特币基本原理 Basic Principles of Bitcoin
1. 节点查找机制 node lookup processing （someone help me here)
2. 货币供应机制  System Controlling Currency Supply
 3. 交易支付机制 Exchange and Payment System
 三、比特币的主要特点 Special Characteristics of Bitcoin
1. 无中央控制 No Central Control
2. 完全匿名 Completely Anonymous
3. 交易成本低廉 Transaction Costs are low
4. 不会通胀 No Inflation
5. 易损性 Easy to Lose
 四、比特币的货币属性 Attributes of Bitcoin
1. 价值尺度： Measure of Value
2. 流通手段：Means of Circulation
3. 贮藏手段：Means of Storing Value
4. 支付手段：Means of Payment
5. 世界货币：International Currency
 五、对金融体系的挑战 Challenge to the Financial System
[tl; dr]
 六、相关建议 Related Recommendations [these are the three points discussed by previous posters]
1.政府和中央银行应正视比特币的存在，主动出击，动用国家巨大的计算能力，抑制私人挖掘的动力，将绝大多数比特币集中在国家手中。
2.研究成立比特币银行，在比特币交易中推行中间机构，以消除其匿名性，使其可以被监管。
3.国际联合发行比特币本位的信用货币，从而促进非主权货币体系的建立。通过这种新型的国际结算货币来挑战美元霸权地位，使国际金融体系更加和谐、稳定。

[JohnOliver]

Which arguably is true if you take proper precautions (mixing your coins, tor, etc).

Tor isn't part of bitcoin though.

Using your argument I could say "The internet offers total anonymity and is completely untraceable" because I can browser the internet through tor.

Actually China already has a few supercomputers with GPUs. IIRC the current ones are all nVidia based, so I dont know how effective they will be,  but as a forward looking statement its certainly true that its feasible for a state player (particularly one like China). Also the cost of developing an asic for bitcoin mining is on the order of a few million $, thats pocket change for a country like China (and perhaps useful for other stuff too); if they do that, they could outhash the rest of us in a blink of the eye.

Yes, most of us already know about what you're saying. But the Chinese author didn't. That's why I pointed it out.

[Gabi]

Very well researched paper for an outsider but he made 2 obvious mistakes:
1. He repeated stressed that Bitcoins offers total anonymity and is completely untraceable.
2. Failed to mention GPU mining and failed to realize that CPU mining, even with super computers, is not cost-effective.

It's clear that he has a good grasp of the economics behind Bitcoins, but he has little technical background.  

And well you have even less than him

GPU supercomputers exist.

In our case, we need an ATI supercomputer and in China? There we go, it ALREADY exist http://www.dvhardware.net/article38967.html

Bright Side of NEws reports scientists at the Chinse National University of Defense Technology have unveiled a petaFLOPS supercomputer that consists out of thousands of Intel Xeon processors along with 5,120 ATI Radeon HD 4870 X2 2GB graphics cards. The system cost 600 million yuan (about $87.88 million) and delivers a theoretical performance of 1.206 PFLOPS.

Of course nothing stop them from making another one with more recent cards or FPGA

[JohnOliver]

Very well researched paper for an outsider but he made 2 obvious mistakes:
1. He repeated stressed that Bitcoins offers total anonymity and is completely untraceable.
2. Failed to mention GPU mining and failed to realize that CPU mining, even with super computers, is not cost-effective.

It's clear that he has a good grasp of the economics behind Bitcoins, but he has little technical background.  

And well you have even less than him

GPU supercomputers exist.

In our case, we need an ATI supercomputer and in China? There we go, it ALREADY exist http://www.dvhardware.net/article38967.html

Sigh... read what I wrote, please.

Yes I know China has supercomputers with GPUs. But the author doesn't know about GPU mining was my point.

[Gabi]

He just spoke about supercomputers, never said "only cpu supercomputers"

[JohnOliver]

He just spoke about supercomputers, never said "only cpu supercomputers"

He doesn't know about GPUs at all. So if you throw two supercomputers in front of him, one with GPU and one without, he'll start CPU mining on both of them and then go home.  

[DeepBit]

He just spoke about supercomputers, never said "only cpu supercomputers"

He doesn't know about GPUs at all. So if you throw two supercomputers in front of him, one with GPU and one without, he'll start CPU mining on both of them and then go home.

He won't start mining, he will hire someone who knows what to do.

[P4man]

Tor isn't part of bitcoin though.

Using your argument I could say "The internet offers total anonymity and is completely untraceable" because I can browser the internet through tor.

And that would be close to the truth. But while browsing with Tor might be untraceable , there is nothing untraceable about using your credit card over Tor. The point is you can use bitcoins with something like Tor; you cant use Tor to anonymize bank  or paypal transactions or any other payment processor Im aware off, besides crypto currencies.

Yes, most of us already know about what you're saying. But the Chinese author didn't. That's why I pointed it out.

Thats your assumption, but unless that somehow refutes the author's point, who cares?

[JohnOliver]

He just spoke about supercomputers, never said "only cpu supercomputers"

He doesn't know about GPUs at all. So if you throw two supercomputers in front of him, one with GPU and one without, he'll start CPU mining on both of them and then go home.

He won't start mining, he will hire someone who knows what to do.

Obviously, yes. But my original point was that A. the author doesn't know about GPU mining and thus B. the author isn't technically inclined.

[JohnOliver]

And that would be close to the truth. But while browsing with Tor might be untraceable , there is nothing untraceable about using your credit card over Tor. The point is you can use bitcoins with something like Tor; you cant use Tor to anonymize bank  or paypal transactions or any other payment processor Im aware off, besides crypto currencies.

Look, this whole "bitcoin is completely anonymous" thing is well covered in the FAQ. If you wanna argue about it do it on the wiki. I'm just pointing out the author's mistake that's all.

Yes, most of us already know about what you're saying. But the Chinese author didn't. That's why I pointed it out.

Thats your assumption, but unless that somehow refutes the author's point, who cares?

The author didn't mentioned a single word about GPUs. That's a fact.
Based on that fact I made the observation that the author isn't technically inclined and is simply looking at Bitcoins from the economic prospective.

[Gabi]

A fail observation. There is nothing there telling you that he doesn't know gpu and that he will cpu mine.

The article speak about bitcoin in an economic point of view, of course it doesn't go in describing all existing supercomputers

[JohnOliver]

A fail observation. There is nothing there telling you that he doesn't know gpu and that he will cpu mine.

The article speak about bitcoin in an economic point of view, of course it doesn't go in describing all existing supercomputers

Wrong again, this article is about bitcoin in general. He specifically mentioned mining, so it's not an economics paper.

[Gabi]

Trolling attempt detected indeed

Protip: speaking about cpu, gpu mining etc etc would have made the article LONGER

[JohnOliver]

Trolling attempt detected indeed

Protip: speaking about cpu, gpu mining etc etc would have made the article LONGER

I translated part of the article and offered an insight on it, in a thread that desperately in need of some translations. What have you contributed to the discussion so far?

[freequant]

Deal!
How do I make a donation to PBC?

[Phinnaeus Gage]

Let's put this in clearer English!  I hate it when google translate's crappy output makes me read more slowly.

Section 6. Recommendations
1. The government and central bank should acknowledge the existence of Bitcoin and deal with it proactively.  Using the top-notch supercomputers at its disposal and using state power to ensure a monopoly on mining power, the central bank could acquire the vast majority of bitcoins.
2. The central bank should set up a Bitcoin bank and an official Bitcoin exchange and become the middleman in Chinese Bitcoin transactions to eliminate Bitcoin's relative anonymity and ensure that Bitcoin commerce can be regulated.
3. The government should push for international acceptance of a Bitcoin-backed currency, establishing a non-sovereign monetary system, to challenge the supremacy of the US dollar and to make the international financial system more harmonious and stable.

Thanks for the clarification.

So they want to become the largest miner and control the bitcoin exchange/banking industry within China to deanonymize it.  This precedent may be followed by other countries, and we'll quickly come to a vastly more traceable system than we have today.  Sure, current bitcoiners all get rich, but the governments won't hurt one bit.  Yes, there will be winners and losers in the bitrush, but in the end we've just delivered them exactly what they've been looking for.  They just don't know it yet.

Yes, this is what I mean by great. However, remember, this is just a lowly credit card journal article by a lowly Nanjing bank staffer. It should not be used to predict real world events. The article is from october and we haven't heard anything more.

If a lowly bank staffer is thinking about it, I can only imagine the thoughts higher up.

After extensive research, I've discovered that that lowly bank staffer has a name. A name he also uses on several forums in China: 地图集

[HorseRider]

This author is only a geek working for the PBC, and it's meaningless for us to speculate what China government is thinking about bitcoin from this paper. It's more likely a personal opinion. This geek published several articles about how to transfer financial transaction information with the help of satellite or something like that