Gold collapsing. Bitcoin UP.

[oakpacific]

Perhaps China is protecting Bitcoin from an overrun and/or keeping the price low so that gov people can buy in.

When we finally break gold parity it will be all the more shocking because right now the gold believers can entrench their views by saying, "See? It can never beat gold. Everyone knows that. Bitcoin was slayed by the golden dragon. Hahahahaaa."

Oh, you just inspire me of a new conspiracy theory: perhaps China(or some other mighty organizations) is busy liquidating gold and accumulating bitcoins, so they are putting a temporary check on the price parity.

This actually makes sense if you analyze the sequence of events during these two months: bitcoins used to be available in large quantities only on foreign exchanges, thus CCP can't get hold of them without moving large amount of fiats into foreign exchanges, which will likely attract attentions. So they may decide to first prop up the bitcoin price in China, gradually siphoning bitcoins into Chinese exchanges, then issue the PBOC statement to creak a market panic, frighten the Chinese speculators to undersell the bitcoins they just bought, and thereby accumulating many bitcoins using yuans being moved entirely within Chinese financial system, which they can freely manipulate to hide their true identities.

[Zangelbert Bingledack]

Holy shit that's the missing puzzle piece (in the conspiracy theory)!

It's well known that China has been encouraging its citizens to stockpile gold, probably so they could confiscate it if needed and as a way of making their citizens richer (a sort of leveraged play on gold).

I was thinking they might be doing the same thing with Bitcoin now. But the problem with the theory was always that they can't really confiscate bitcoins. However, they can sort of do it by manipulating the market and media, laws, etc. It's exactly what you'd expect a powerful and strategically cunning government to do.

It's actually a pretty great strategy. Get your citizens to buy, and if the price goes down it's the same as if they gambled it away in Macau. The government loses nothing much. If the price goes up you get more tax money and economic growth, and then with your strong control of media and everything you can "shake the tree" and still be able to buy in yourself at decent prices once Bitcoin is more solidly a thing.

Lower risk and higher reward than just buying in with your own money right away.

[oakpacific]

Holy shit that's the missing puzzle piece (in the conspiracy theory)!

It's well known that China has been encouraging its citizens to stockpile gold, probably so they could confiscate it if needed and as a way of making their citizens richer (a sort of leveraged play on gold).

I was thinking they might be doing the same thing with Bitcoin now. But the problem with the theory was always that they can't really confiscate bitcoins. However, they can sort of do it by manipulating the market and media, laws, etc. It's exactly what you'd expect a powerful and strategically cunning government to do.

It's actually a pretty great strategy. Get your citizens to buy, and if the price goes down it's the same as if they gambled it away in Macau. The government loses nothing much. If the price goes up you get more tax money and economic growth, and then with your strong control of media and everything you can "shake the tree" and still be able to buy in yourself at decent prices once Bitcoin is more solidly a thing.

Lower risk and higher reward than just buying in with your own money right away.

If this is true it would confirm what I have been saying for a while: hoarding bitcoins is good, it's an essential safeguard for our liberty lest all coins go into the hands of governments.

[Zangelbert Bingledack]

Yeah but the interesting thing is it's probably individual officials buying mostly, rather than having some kind of government treasury hold wallet data for the government as a whole or any department. Bitcoin is so good at what it does that it could rip these bureaucracies apart, since for the first time each individual's wealth isn't contingent on the web of trust in the political world. It's a way for even government officials to opt out. And of course not just in China.

[cypherdoc]

Yeah but the interesting thing is it's probably individual officials buying mostly, rather than having some kind of government treasury hold wallet data for the government as a whole or any department. Bitcoin is so good at what it does that it could rip these bureaucracies apart, since for the first time each individual's wealth isn't contingent on the web of trust in the political world. It's a way for even government officials to opt out. And of course not just in China.

Yep,  what I'd give to be a zit on Bobby Lee's forehead.

He can probably see further than almost anyone in the bitcoin community right now.

[oakpacific]

Yeah but the interesting thing is it's probably individual officials buying mostly, rather than having some kind of government treasury hold wallet data for the government as a whole or any department. Bitcoin is so good at what it does that it could rip these bureaucracies apart, since for the first time each individual's wealth isn't contingent on the web of trust in the political world. It's a way for even government officials to opt out. And of course not just in China.

I agree with what you said here, but I would also not rule out the possibility of purchases by the government itself, it can even be done with private hands.

[cypherdoc]

Yeah but the interesting thing is it's probably individual officials buying mostly, rather than having some kind of government treasury hold wallet data for the government as a whole or any department. Bitcoin is so good at what it does that it could rip these bureaucracies apart, since for the first time each individual's wealth isn't contingent on the web of trust in the political world. It's a way for even government officials to opt out. And of course not just in China.

I agree with what you said here, but I would also not rule out the possibility of purchases by the government itself, it can even be done with private hands.

And let us not forget the individual bankers themselves.

Who seriously thinks they'll let themselves get behind the wave?

[oakpacific]

Yeah but the interesting thing is it's probably individual officials buying mostly, rather than having some kind of government treasury hold wallet data for the government as a whole or any department. Bitcoin is so good at what it does that it could rip these bureaucracies apart, since for the first time each individual's wealth isn't contingent on the web of trust in the political world. It's a way for even government officials to opt out. And of course not just in China.

I agree with what you said here, but I would also not rule out the possibility of purchases by the government itself, it can even be done with private hands.

And let us not forget the individual bankers themselves.

Who seriously thinks they'll let themselves get behind the wave?

That was my interpretation of PBOC's statement, they are trying to ban something they know banks are trying to get involved, otherwise they need not be so explicit.

[Adrian-x]

P.S.: get back to work, Private.

Thanks for the great reply, I turned in as I hit post. (I didn't intended to get anyone out of bed, anyway we're still taking heavy fire here in the trenches)  

 Lot of insight in the comments above, looks like interesting times ahead (and I though growing up through the dismantling of apartate in SA was history)

[cypherdoc]

i even caught evoorhees making a case that mining was irrelevant to the price over on Reddit.

Do you have the link? I remember the statement, but the closest I could find was this.

It's been amusing going through old posts although it seems some of them have become corrupted, maybe due to all the forum breaches.

finally got around to finding it:



[–]evoorhees 20 points 1 month ago

Your first point (regarding mining) is completely irrelevant to the price of bitcoin. The mining industry is a derivative of and subordinate to the Bitcoin industry, not the other way around. Mining follows price, not the opposite.

Your other points are good ones.

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[–]cypherdoc2 5 points 1 month ago

no, i don't agree Erik.

mining goes hand in hand with the merchant economy and investment (speculation). it is a critical part of Bitcoin as it provides the clearing of tx's and security to the system as a whole.

vbenes below is correct in that an investor, who might initially look into getting into Bitcoin via mining currently, will look at the exponentially rising hashrate/difficulty and will conclude that it's too competitive and as a result divert his fiat into buying of BTC instead. he will also conclude that the exponentially rising HR/diff is very good for the security of his investment.

right now, we're seeing HR/diff leading the price; essentially dragging the BTC price higher. at other times, we might see the opposite; price leading HR/diff and dragging it higher.

all that matters is that fiat is entering the Bitcoin economy in one form or another. all of which is a very good thing.

[User705]

Yeah but the interesting thing is it's probably individual officials buying mostly, rather than having some kind of government treasury hold wallet data for the government as a whole or any department. Bitcoin is so good at what it does that it could rip these bureaucracies apart, since for the first time each individual's wealth isn't contingent on the web of trust in the political world. It's a way for even government officials to opt out. And of course not just in China.

What's interesting is that bitcoin is probably a very good way to bribe government officials.  So it shouldn't surprise anyone if a lot of them end up having lots of BTC.

[justusranvier]

[Spaceman_Spiff]

Well that sure puts things in perspective  

[marcus_of_augustus]

Banks are chomping at that bit to get involved in bitcoin and cryptocurrencies but keeping getting sternly warned off by the facists in govt ... who see their dreams of totalitarian financial information awareness and control disappearing overnight ... at some point the leash will break and money, real big money, will be set free ... and the facists will be washed away in the flood of capital racing through every nook and cranny they have blocked up with their byzantine attempts to control liquidity to their own selfish, misguided ends.

An old fashioned Jubilee of Jubilees (500 year cycle) is approaching ... pity the idiots who willfully stand in its way full of hubris and ignorance in equal measure.

[oakpacific]

Banks are chomping at that bit to get involved in bitcoin and cryptocurrencies but keeping getting sternly warned off by the facists in govt ... who see their dreams of totalitarian financial information awareness and control disappearing overnight ... at some point the leash will break and money, real big money, will be set free ... and the facists will be washed away in the flood of capital racing through every nook and cranny they have blocked up with their byzantine attempts to control liquidity to their own selfish, misguided ends.

An old fashioned Jubilee of Jubilees (500 year cycle) is approaching ... pity the idiots who willfully stand in its way full of hubris and ignorance in equal measure.

We may need another jubilee of jubilees to see the full value of Bitcoin.

[KFR]

Just thought this would be of interest:

http://www.bbc.co.uk/news/magazine-25255957

[btcprice]

Just thought this would be of interest:

http://www.bbc.co.uk/news/magazine-25255957

Very interesting. Thanks!

[KFR]

NP.  While we're about it, this isn't entirely unrelated:
http://www.bbc.co.uk/news/magazine-25119865

[Zangelbert Bingledack]

On China's Bitcoin strategy:

http://www.reddit.com/r/BitcoinSerious/comments/1sbtke/chinas_recent_guidance_great_for_bitcoin_in_china/

[oakpacific]

On China's Bitcoin strategy:

http://www.reddit.com/r/BitcoinSerious/comments/1sbtke/chinas_recent_guidance_great_for_bitcoin_in_china/

Yup, something I forgot to add: Chinese government hardly ever release a statement without adding all kinds of rhetorics and political indoctrination into it, now this statement is surprisingly free of that-had the government wanted to put a stop on Bitcoin trading, they would have painted it in much more negative ways, instead they merely warn of risks, but to the Chinese mindset, "government says it's risky=I can make big money", and "I can make big money"+"government says I am free to do so"="BUY BUY BUY!"