expect a set of 3 articles about China situation and a prediction following

[zhangweiwu]

All those banks are essentially government owned banks. Either central government or local government.

It is true. (for these Chinese banks). I explained before that in the West the banks control the government and it is the other way round in China:)

[zhangweiwu]

You're one of the most interesting poster on these forums OP. It's always a pleasure to read your insights. Thanks you.

Thank you!

Can't wait to read your next article. Excellent reporting, Zhang.

The next article was written yesterday, is in editing pipeline now. It contained no prediction but overview of Chinese Bitcoin invetment behavior (teaser: it is not much different than Chinese agarwood investment, which has a market cap in China close to the Bitcoin global market-cap). Unfortunately my eye injury delayed me, that I start to worry not being able to deliver the 3rd article before 10th May. Guest writing is a lot of work to do than random post on the forum - need to check the fact and think over the points made, whether or not they are valid and based on fact etc etc, but it is worth it, it is a pleasure and rewarding experience to work with professional editors.

I did talking in the Bitcoin world. My editor is pushing for the "most insightful journalist" award, which, if successful would be very helpful position for me to move from talking to acting, to establish bitcoin projects - that I longed to do. If you send flower kindly send it as the blockchain.info nominations:

Hallo, editor from bitcoinblog here. I am lucky to publish Zhangs insightful articles, and I am lucky to read you like them.

Currently blockchain.info accepts nominations for the blockchain award, and one category is "most insightful journalist". If you think like me Zhangs articles are the most insightful source of information about one of the most important (price-forming) issue in the temporary bitcoin seen I would be glad if you take some seconds to nominate him.

Just click here https://blog.blockchain.com/2014/04/16/the-first-annual-blockchain-awards/

Thank you

[Mythul]

Excellent info. Thank you for posting !

[zhangweiwu]

The second is finally here:
https://bitcointalk.org/index.php?topic=606390.0

The third is in the editing workflow.

[BusyBeaverHP]

Awesome, reading now...

Thank you for your contributions.

[Biodom]

Awesome, reading now...

Thank you for your contributions.

Not to diminish the OP work, but we already know that bitcoin has no immediate future in China. We still have the rest of the world that is NOT China.
The world is much bigger. If China wants to use the old monetary system-it is totally fine by me.

[zhangweiwu]

I delivered 2 articles. The recent 2 months's event unfold faster than I thought, that I have to deliver prediction before the 3rd article:


What are the outcomes

A strong ban, a national 'illegal exchanges cleanse' action to rule the exchanges outlaw and ask them to settle and stop exchange business before a certain date. If non-PBOC ministries participated, they will consider to also take down a few non-bitcoin exchanges, e.g. underground stock broker, to weaken Bitcoin's publicity and to incriminate Bitcoin by putting it together with other guilty financial schemas.
Condition: 1. the PBOC consider a strong pose in financial sector against shadow baking benifitial or not harmful to other non-Bitcoin measurements they are about to take. After all PBOC's main task is monetary policy, need to weight the message they deliver to the market. 2. Bitcoin exchanges or Bitcoin itself is not weakened in their observation period.
Probability for this condition to be met: 50% likely


The second on the candidate list is a ban from non-PBOC entity (most likely Ministry of Industry and Information or Ministry of Commerce) for any commercial activities related to Bitcoin - this second possibility won't happen in May, because one weak ban after anther weak ban in short interval weakens Lord's image. After all you should fear the Lord, not to play hide-and-seek.
Condition: Bitcoin exchanges are about to die out or exiled completely, just need a push.
Probability for this condition to be met: 25% likely:

The third is our Lord's plan B. Use state media to question one exchange about insolvency (typically largest of all targets), force it to actually be insolvent (if it is managable), and use state media propoganda machine to paint Bitcoin evil and black, from birth, with news, documentaries, radio etc etc. This plan is really not needed: as "Art of War" said, letting your enemy quit without a fight is better than killing it in fight; also, thanks to the Internet, change attitude that radically would harm the regime.
Condition: it happens if die-hard bitcoin believers started some group-activities that calls a lot of atention due to Bitcoin price raise largely OR the state decide to take down another die-hard enemy similar in influnce of Bitcoin, and by killing Bitcoin in a confrontation, save the need to do it again for a harder enemy: for the time being, the harder enemy is either P2P lending business or Alibaba.
Probability for this condition to be met: 12% likely

PBOC will say nothing more.
Condition: if exchanges all choose to self-exile, or just do business with cash-at-door on tiny scale, or just die (FxBTC), not trying hosting P2P trading, not trying ATM or vendor machines or tried but not successful, and PBOC consider they are weak enough, and in the interim the world bitcoin price doesn't rally.
Probability for this condition to be met: 12% likely


Not weighted for now: Take down a leading exchange with the execuse of tax issue and others will quit by themselves. If this route is chosen, it should be down long ago when exchanges were not getting so much attention.
Conditoin: if the following is done successfully, the Lord will reconsider this approach.

will always happen together with other outcomes except PlanB: little media exposure (good-or-bad) for Bitcoin in state-own medias, less and less in other Chinese medias.

Will there be a raid?

Western readers are concerned with violence so I had to address it. For Chinese readers I won't mention it, because it is:

1% likely: There will unlikely be an arrest / raid, because that sort of thing should happen before the event escalate to central government, when the central government can always blame lower level for the blood. Now:
1. Since this issue is brought to central (The Lord) as early as Dec 2013, there is no space for bloody nor violence.
2. consideration of foreign capital involvement, explicit force action backfires PR trouble.
3. arrest by national government usually targets those outspoken member who holds different opinion than the government and also different than the people around him, in short, a prominent target. For example, if you say "all officials are corrupted and parasite of the country", they won't arrest you, because your opinion is just another average Joe; but, if you sing freedom and democracy, you are not only different from the government, but also different from the average Joe hence a prominent target (the people do not demand either of these, they demand opportunity-to-be-wealthy and no-corruption-ruling). None of the exchanges are prominent target by this definition. For example, Huobi CEO explicitly said "Bitcoin can't be a global currency", and emphasized its property as "collector's piece" hence he is not a prominent target.
4. The regime is rather kind and humane, you are often given a chance, a hint, before violence - usually by inviting you for a tea (and you are really served tea! I never experienced it but I heard it is free and in a nice café - I hope I can choose, because my favorite tea is usually too expensive for me).  He who do not repent gets trouble. Even Don Juan is given a chance to repent. None of the bitcoin players are stupid enough not to repent.

What is the effect on price

Sorry, I haven't do homework for this party yet. But it depends on which of the above happens. Things happened too fast for my brain to process.

What is the 3rd article about

An attempt to find out what drives the bubble in the first place.

P.S.

- A list of guest writing for Bitcoinblog.de by me can be find http://bitcoinblog.de/category/english/ where my name Weiwu is.

[Torque]

50% likely: What more likely is a strong ban, a national 'illegal exchanges cleanse' action to rule the exchanges outlaw and ask them to settle and stop exchange business before a certain date. They will consider to also take down a few non-bitcoin exchanges, e.g. underground stock broker, to weaken Bitcoin's publicity and to incriminate Bitcoin by putting it together with other guilty financial schemas.

Thanks, this is what most are expecting as well.  When this happens, it will be amusing to watch because once the uptrend gains significant momentum nothing will really slow it down.  At that point the rest of the world will have become completely immune to any more China bad news.  The market will probably go down a little on the news, but it'll be a temporary speed bump/blip as those coins quickly get bought back up and things continue on.  The people buying in the rest of the world will fear nothing.  It will be like a stampede, a tsunami that the PBOC won't be able to hold back.  They can set all the fake future dates that they want, but bitcoin demand worldwide will continue to outstrip supply, and roll right past any more bad news from China.  And then at that point the Chinese government and PBOC will lose complete face with their people, because the rest of the world will have spoken loud and clear: bitcoin belongs to the world, not just China.  It will be embarrassing for them, because they can't control it.  They'll either have to allow bitcoin to live, or risk driving it offshore or into a black market on the mainland.  Meanwhile everywhere else in the world, bitcoin will continue to thrive and grow.

[serenitys]

I seriously hope you reference your "Lord" with disdain and facetiousness...because it's the 21st century, discussing cryptocurrency designed to facilitate freedom...how any human could seriously refer to another human being as "Lord" - and worse, how any human ego is shoved so far up his own ass he thinks he's even relevant enough to be called Lord in the 21st century, is beyond me.

That's part of the problem - people need to get up off their knees and realize these people aren't leaders and they aren't lords. They are just other dudes in suits using their resources to overcome someone else. If China ever wants to see itself liberated from its communist psychopath leaders who think they're above the law and above deity (or deity incarnate, which is delusional, sorry), the people of China need to disregard their "Lord", tell him to shove it up his ass, and massively adopt bitcoin regardless.

The only way this ends is when people grow the hell up.

Apologies for the rant but I read "Lord" and just made my eye start twitching at the absurdity of such a label or title in this day and age.

Carry on.

[zhangweiwu]

Despite my aversion to the Lord and my aversion to myself for having been trained to speculate what Lord thinks as a survival exercise for the last decade, I actually find the following interesting and important: There is no sufficient proof that a free society is more productive than a society of strong political central power combined with almost-free market policies. Or: Milton Friedman suggested "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose; free market is incompatible with regime of centralism in the long term". but What Chinese calls Socialism with chinese characteristics worked well enough and long enough to disapprove Milton. Personally, no matter how I love freedom, a down-to-the-ground rational thinker like me fail to find the necessity for this love, almost like an homo find it hard to rationalize his love -- , unless I consider freedom self-evident, that is, like a religion.

[Torque]

Despite my aversion to the Lord and my aversion to myself for having been trained to speculate what Lord thinks as a survival exercise for the last decade, I actually find the following interesting and important: There is no proof that a free society is more productive than a society of strong political central power combined with almost-free market policies. Or: there is no proof that what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose". Personally, no matter how I love freedom, a down-to-the-ground rational thinker like me fail to find the necessity for this love, unless I consider freedom a necessity without the need to proof - that is, like a religion.

True freedom (of thought, of belief, of finance, of choice, etc) has no value to a culture or society that has never felt it.  When you are basically born into a culture that brainwashes its citizens into believing that they need lordship and stewardship in order to survive, they don't know what it means to have the power to survive on their own.  In fact, they'll be raised and brainwashed to violently oppose the idea.  Just look at the citizens of North Korea for a living example.

[T.Stuart]

Despite my aversion to the Lord and my aversion to myself for having been trained to speculate what Lord thinks as a survival exercise for the last decade, I actually find the following interesting: there is no proof that a free society is more productive than a society of strong political central power combined with almost-free market policies. Or: there is no proof that what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose". Personally, no matter how I love freedom, a down-to-the-ground rational thinker like me fail to find the necessity for this love, unless I consider freedom a necessity without the need to proof - that is, like a religion.

There's no doubt about it. Freedom may be the ultimate ideal but there are strong links to be drawn between freedom and myriad problems in society.

[Toxic2040]

They'll either have to allow bitcoin to live, or risk driving it offshore or into a black market on the mainland.  Meanwhile everywhere else in the world, bitcoin will continue to thrive and grow.

I seriously hope you reference your "Lord" with disdain and facetiousness...

Whilst I agree with your moral opinion on this, I also respect the deep look into the Chinese psyche offered by zhangweiwu. Most Westerner's fail to understand how deeply entrenched this mentality is, just as the East fail's to grasp the mind set of the individualistic West.

I find this article sum's it up rather well. moon-and-stars

In their cultural values the Chinese seek to be like moons – riding the gravitational pull of their local spheres and reflecting the light of their suns: that is to say, they follow the guidance of their leaders and of their ancient traditions. Americans on the other hand seek to be like stars – each desiring to shine brightly and independently, to sparkle with their own unique glow. No one can say whether moons or stars are more beautiful, for both emit their own special light and, lacking either, the night sky would not be the same.

[serenitys]

Despite my aversion to the Lord and my aversion to myself for having been trained to speculate what Lord thinks as a survival exercise for the last decade, I actually find the following interesting and important: There is no proof that a free society is more productive than a society of strong political central power combined with almost-free market policies. Or: there is no proof that what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose". Personally, no matter how I love freedom, a down-to-the-ground rational thinker like me fail to find the necessity for this love, unless I consider freedom a necessity without the need to proof - that is, like a religion.

Or: there is no proof that what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose"

---

I posted about this elsewhere but it fits here in response to the above. There is ample proof this is fact. Consider the evolution of P2P file sharing for music that got the government all up in a tizzy trying to regulate it and protect the corporate music industry. The people recognize an alternative to being told what and who they could listen to, what and who was "popular" according to how much the industry made, and when (radio air time) was to transfer, digitize, compress individual music files and pass them around between themselves outside the regulatory authority...and the record companies lost...those who didn't adapt to digital mp3 on demand went out of business.

The same evolution happened exactly with the movie industry and television networks - people figured out an alternative to being told what they could and couldn't watch, and when, and without being forced to choke down bs advertising, and being censored, and they chose P2P file sharing of video files amongst themselves...and the industries again lost to the will of the people's preference for freedom of choice.

Same exact evolution happened with the publishing industry when people opted for the freedom to create and publish independently of a publishing house who was the final authority over who was worthy of being published and who wasn't.

The entire entertainment industry has been co opted by the will of the people refusing to accept the rules and regulations of some central authority for their recreation.

The same thing is happening with marijuana...

Freedom is the only option and people do choose it and they do thrive. Once the "on demand" issue was resolved by the people refusing to buckle to the fear mongering bs of the government and corporate money, innovation exploded - indie app developers rained down new technologies. Once the scientific community protested enough to get through the rules and fear mongering, the medical technology field exploded.

So your assertion there is no proof that a free society would be productive is absurdity and oblivion to the reality of human nature.

It's 2014. Nobody "owns" anyone.

Any time I see some clown calling himself a king or a prince, or a lord or a master, or a pope, all I see are a bunch of delusional crackpots playing dress up.

Freedom is the ONLY way the world needs to be.

[zhangweiwu]

Or: there is no proof that what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose"

I posted about this elsewhere but it fits here in response to the above. There is ample proof.

Okay, My wording is not good enough, allow me to step back and rephrase it:

Milton Friedman suggested "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose; free market is incompatible with regime of centralism in the long term". What Chinese calls Socialism with chinese characteristics worked well enough and long enough to disapprove Milton.

In china people compare China to India and conclude democracy not a condition for high productivity.

[Torque]

Or: there is no proof that what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose"

I posted about this elsewhere but it fits here in response to the above. There is ample proof.

Okay, My wording is not good enough, allow me to step back and rephrase it:

It is too easy to disapprove what Milton Friedman suggested is true, that "a society allowing free market will eventually evolve into a free society thanks to its influnce on people's willingness to choose" - just look at China.

What are you talking about?  The Chinese have been ruled by emperors and masters for thousands of years.  They have never had a choice for a truly free market, ever.

[serenitys]

I can accept the cultural chasm and where it comes from. I get it. And it's much easier for those in a presumably free country to protest and revolt enough that the powers that be back down.

I realize conditioning of communism and dictatorships prevent the citizenry from truly understanding what true freedom feels like...so they're still scared to death to rise up and remove those who threaten their freedom under a bs guise of protecting them. They are not protecting anything but their own authority.

It's not just China. I feel the same when I see middle eastern women wearing head to toe coverings and accepting being treated like a punching bag for a bunch of goat screwing psychopaths. I can't help but see an easy solution: women just need to lace the Cheerios with rat poison and kill them off in bunches, take off the wraps and recognize they hold the real power and always have. If any guy ever tried to force me into compliance that way I'd beat him to death in his sleep.

Freedom is a state of mind before it is a state of reality.

PS the same dismantling of religion is also taking place, rapidly so, now that the world has full access to information - religion is now being recognized as a parasitic mind virus not to be taken seriously.

Freedom revolution is taking place because of the choice to be free over being ruled, and innovation in every industry is thriving where a free market has been established by a freedom securing people. Across the globe.

The only heroes in China are the ones who fought and died on their feet, not the ones living on their knees.

[Toxic2040]

If any guy ever tried to force me into compliance that way I'd beat him to death in his sleep.

So sexy..you sound like a possible future ex-wife..single by chance?    (joking of course)

In the famous words of Janis Joplin.

Freedom's just another name for nothing left to lose

Me and Bobby McG


Until the East feel's it has nothing left to lose..nothing will change. They find 'comfort' in this authority.

[serenitys]

If any guy ever tried to force me into compliance that way I'd beat him to death in his sleep.

So sexy..you sound like a possible future ex-wife..single by chance?    (joking of course)

That depends...can you get me the hell out of the USA? 

I agree...they have to undergo a paradigm shift toward personal liberation as a state of mind before anything changes.

[zhangweiwu]

Consider the evolution of P2P file sharing for music that got the government all up in a tizzy trying to regulate it and protect the corporate music industry. ...

The same evolution happened exactly with the movie industry and television networks ...

Same exact evolution happened with the publishing industry when people opted for the freedom ...

The entire entertainment industry has been co opted by the will of the people refusing to accept the rules ...

The same thing is happening with marijuana...

Freedom is the only option and people do choose it and they do thrive.

Before any of these happened, as long as I can remember (> 12 years), http://mp3.baidu.com has been offering amazing repertoire of music to download from Woody Guthrie to Bartok (you must come from an IP address of China to download these illegal copies, and I drunk this well like crazy), and every other rule of entertainment industry you mentioned has been broken in Chian from the start - so is software copyright, e.g. few pays Microsoft Tax here.

But I don't see this freedom bring any influnce on the free thinking to China. I also cannot ascribe the entertainment and software industry development to this freedom. Indeed observing from China, this 'freedom' is slowly reducing thanks to stronger and richer Chinese entertainment industry. So, observing from this end of the earth, it is difficult to convince a Chinese that the world trend is the one you describe, and there is still no proof freedom brining productivity if you look from here. we observed reverse trends, that merger and takeover are mainstream in china internet sector.

Personally I know the event and 'development' you described and observed, but my fellow countrymen doesn't, thus they joined Bitcoin game for a very different reason than yours. I wrote another article to address the reason Chinese joined Bitcoin since late 2013, still it is in the editing workflow.

You also said freedom bring indie developers with new technology. We have every new Internet technology the West have, with our state controled imitation, many have more users than the original. So lack of innovation does not make life harder. If you link freedom to innovation, you will find a funny fact, that we decided to outsource this freedom to the West and see what they produce, and copy it. So without adding more freedom here, we enjoy the fruit none the less. Mindboggingly: If freedome can be outsourced, there is no reason why we must produce it ourselves.