14 votes

This "crash" was actually a WIN for Bitcoin

First of all, bitcoin didn't crash so everyone calm down.

Yes, it dropped but why? Because due to Chinese government regulations the Chinese bitcoin trading company, BTC China, can no longer accept the Yuan for bitcoin. Why is this good? Because it means the Chinese gov't can't control it. They can restrict businesses from accepting it, but they CAN'T control the supply of bitcoin and either can't or don't have the resources to monitor it and therefore, the only means of controlling it is to prohibit its use. This is good. We don't want governments or big banks to validate bitcoin in ANY way. This keeps it free and anonymous. World governments are getting scared and fearing this currency they can't control. That's a good thing.

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If China prints the Yuan... then they can decide if it

can be transacted for Bitcoin I suppose. Like others have said, this is just prohibition. In the US you can't use Dollars to buy illicit drugs, even though the Dollar has "This note is legal tender for all debts, public and private" printed on it.

Rising valuations will continue as long as buyers outstrip suppliers, and falling valuations will occur when sellers outstrip buyers. Simple market mechanics in play I think.

As the political world tries to wrestle with Bitcoin, and if it becomes "illegal" to transact fiat for Bitcoin in all government backed (and money changer backed currencies, by legislation) who will want to own Bitcoin? In the end Bitcoin itself relies on the the interchangeability with goods and services. When Bitcoin is starved of this ability, no one will want them.

IMO, the crash is good in the

IMO, the crash is good in the sense that it makes the speculators and the people who are into bitcoins for hoarding and see it as a stock to cash-out during every Govt vs bitcoin face-off. This keeps the bitcoin user-base closely tied to liberty and anonymity and long-term focus :)

interesting take

i'm not sure that china has banned btc china from taking yaun. the news from there changes all the time so that may be something new.
do you have a link?
from what i understand china banned 3rd party provides from transferring money to btc china but banks still can so that way the gov can track it. right now btc china had it's bank break a contract and are scrambling for a new bank so they can start taking wires again. if this is not accurate please post a link to updated info. thanks

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

financial institutions included

If you can believe this: China’s central bank regulated the virtual currency for the first time on Dec. 5 by banning financial institutions and payment providers from conducting transactions in the virtual currency. Zhou was cited as saying by China Business News that the rules would be “strictly enforced.”

“The PBOC statement on Dec. 5 was somewhat vague and there is more clarity now,” Zennon Kapron, managing director of financial consultancy Kapronasia, said in an interview in Shanghai. “The way it’s reading now is that after the Chinese New Year, you won’t be able to get your money off the platforms.”

[....]

The number of banks and payment providers that can transact Bitcoin has shrunk since the ban was announced, he said.

http://www.bloomberg.com/news/2013-12-17/china-bans-payment-...

It would appear that they (financial institutions and payment providers) have until the Chinese New Year (January 31, 2014) to comply with the ban. It sounds like it is going to make it hard to cash out of bitcoin and into fiat, once the ban goes into effect. Second thought, is that the other way around or both? What can happen with bitcoin in China between time and how will that effect the market going forward? We will have to wait and see.

I don't think they've exactly banned BTC China from taking it...

But in the article, the spokesperson from BTC China has attributed their not being able to receive yuan to Chinese government regulations. Here's the article I read:

http://www.theguardian.com/technology/2013/dec/18/bitcoin-pl...

thanks

with so many rumors and contradicting reports it's hard to know what is going on over there, communism sucks.

at first i felt sorry for the oppressed Chinese people but on further reflection and advice from the founders i believe they are a bunch of cowards who get the government they deserve...

`A society that will trade a little liberty for a little order will lose both, and deserve neither' -
Thomas Jefferson

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." Benjamin Franklin

they're not all cowards though, i bet these people still have their bitcoins...

http://cdn.theatlantic.com/static/infocus/china060412/t01_90605094.jpg

http://resources3.news.com.au/images/2012/12/03/1226528/654383-china-freeway-house.jpg

http://www.theblaze.com/wp-content/uploads/2012/12/2008-nail-house.jpg

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Enlightening snippet from Smaulgld posting

For more than a decade the money-transmission industry, which includes firms such as Western Union and PayPal, has been required to enact anti-money laundering controls, report suspicious activity, register with FinCEN and obtain state licenses.

These steps are required to comply with the Bank Secrecy Act, the main anti-money laundering statute, and avoid running afoul of a federal law that bans unlicensed money transmitters.

While some Bitcoin businesses reject FinCEN's assertion that they are money transmitters, a number have still registered with the agency, a search of the Treasury bureau's website shows.

"Timid men prefer the calm of despotism to the tempestuous sea of liberty" TJ

This is not a win, nor a loss... it's just bitcoin.

Bitcoin has had 4 major price swings since its inception. This wont be the last big move down or up.

Anything the governments of the world do to stop bitcoin can only strengthen the case for bitcoin type systems, since they can only restrict capital movements.

Tools of war are not always obvious. The worst weapon is an idea planted in the mind of man. Prejudices can kill, suspicion can destroy, and a thoughtless, frightened search for a scapegoat has an everlasting fallout all of its own.

I will...

I will actually agree to an extent with the OP. I am not a Bitcoin supporter, and not necessarily an opponent either.

This did demonstrate a positive side of bitcoin; but at the very same you can't ignore the huge flaw that was emphasized in this very same instant - the same flaw that has, from my own judgement, kept me out of Bitcoin since it has popped up on more than 3 large-scale occasions. Price volatility is important to watch - but more-so watch the separate triggers for disparity. In any investment, monitor these triggers and keep them in mind when making any decisions: market share and market control. Just my two cents.

100% correct

The entire goal was to take our ball and go play on a different field. Why would we want the bullies to follow us?

I "know" that no currently fiat government will ever support it so any early speculation based on the hope that they will is just driving the price higher than currently realistic. And as a result, people are seeing the rise to $1000+ as the real rise to $1M. In fact, the rise to $250-$400 is the real rise (see the approaching bottom) based on the current fundamentals. Those fundamentals include businesses that accept them, exchanges that are unencumbered, money transfers that can benefit, etc.

That 'value' is based on real world events, not internet virality. As such, we should watch the rise through different glasses - with expected usability proportional to the real world use, not the hype.

Bitcoin prohibition can only create a black market for bitcoin.

What else could it possibly do?

9-11 was a panda job.

Yes, with one caveat

That black market wouldn't just be for criminals. It would include more and more everyday people all the time.

Good point. +1

Agree but that would eliminate the fiat dollar gains

If people want an alt currency- it might be too much to ask to try and get fiat appreciation too
The massive dollar appreciation is a target on bitcoins back

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Don't you have that backwards?

If the alt is appreciating (because or wider use) and people are choosing it "as opposed" to fiat, wouldn't that support more alt appreciation and more fiat devaluation? On paper and in terms of dollar denominated, people would see their wealth grow proportional to both but we both know that at least the fiat side is just magic smoke clearing on its way to a crash.

Yes people are choosing it but govts

Are discouraging it
This will limit its widespread use.
Also as more people chose alt currencies and they become more avail there will be less reason to hold them and the per unit cost of bitcoin would drop in that scenario.
If one wants to use alt currencies for transactions there doesn't seem to be a compelling reason to hold them and endure the risk. Alt currencies can be acquired when there is need to use. Seems the main reason to hold is for speculative gains.
The average person won't bother with bitcoin for everyday use if their local fiat does the trick .
They may wish to use alt currencies for transferring money but they won't need to hold alt currencies for that they can just convert at the time of the transaction

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Bad News - Chinese shut dowm bitcoin

Good News - The Chinese can't control it?

Norman, coordinate..Norman coordinate.....

Leges sine moribus vanae

They didn't shut it down

They stifled its use through regulation. Remember - bitcoin can be held on people's computers and other personal electronic devices. Just because a Chinese trading platform can't accept it doesn't mean it's obsolete it China.

You are correct

But it severely restricts it.
Like allowing fire but limiting the oxygen

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Governments control institutions

They have institutions by the short hairs. These institutions can be harassed by regulatory agencies, subjected to endless audits by taxing authorities, have their assets frozen/confiscated etc., etc...
Governments would probably accept and even approve bitcoins. What they will NEVER accept is PRIVACY. If institutions are prevented from accepting bitcoins, bitcoins will be as useful as money as beanie babies.

Leges sine moribus vanae

That hits the nail on the head

Bitcoin will be left alone if it can be taxed and regulated like anything else.
If it is used and touted to avoid scrutiny they will track down its users

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Certainly many late-coming Chinese buyers panicked and sold

out of pure fear of their government. But I'm also sure some bought on the news and discounted prices.

9-11 was a panda job.

US citizens will do the same when

Further moves are made against bitcoin
http://mobile.reuters.com/article/idUSBRE9BG1DC20131218?irpc...

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ugh

.