Why China Undermines Bitcoin - as It Tests Its Own Digital Currency (theguardian.com) 86
The Guardian's UK/US site editor in the Asia Pacific timezone argues that China wants to undermine bitcoin because, behind the scenes, its reserve bank wants to set up its own digital currency — and then reboot the international financial system:
The People's Bank of China aims to become the first major central bank to issue a central bank digital currency. While the PBOC's counterparts in the west have taken a more cautious approach, it has held trials in several major cities including Shenzhen, Chengdu, Shanghai and Hangzhou. The benefits of an e-currency are immense. As more and more transactions are made using a digital currency controlled centrally, the government gains more and more ability to monitor the economy and its people.
The rollout is also seen as part of Beijing's push to weaken the power of the U.S. dollar, and in turn that of the government in Washington... Alarm in western governments is such that the threat posed by the digital yuan, which could put China out of reach from international financial sanctions, for example, was discussed at last month's G7 meeting.
There's additional reasons for China's desire to replace bitcoin with its own currency, various experts tell the site. No central bank relishes the thought of a "parallel currency" — and there's also concerns about consumers being hurt by a lack of regulations, as well as the strain crypto-mining puts on the nation's electricity system. But the Guardian also adds that "The threat of an unregulated alternative monetary system emerging from blockchain technology is a clear and present danger to the Communist party, according to observers."
"Jim Cramer, a former hedge fund manager and CNN business expert, said the government in Beijing "believe it's a direct threat to the regime because... it is outside their control".
The rollout is also seen as part of Beijing's push to weaken the power of the U.S. dollar, and in turn that of the government in Washington... Alarm in western governments is such that the threat posed by the digital yuan, which could put China out of reach from international financial sanctions, for example, was discussed at last month's G7 meeting.
There's additional reasons for China's desire to replace bitcoin with its own currency, various experts tell the site. No central bank relishes the thought of a "parallel currency" — and there's also concerns about consumers being hurt by a lack of regulations, as well as the strain crypto-mining puts on the nation's electricity system. But the Guardian also adds that "The threat of an unregulated alternative monetary system emerging from blockchain technology is a clear and present danger to the Communist party, according to observers."
"Jim Cramer, a former hedge fund manager and CNN business expert, said the government in Beijing "believe it's a direct threat to the regime because... it is outside their control".
The "narrative" has a reason behind it. (Score:4, Interesting)
You try to paint a picture that this is a mere "narrative" and thus is irrational, while overlooking that there's an established pattern.
Communist governments, China's and elsewhere, try to put an end to anything that (A) can become big in their country and (B) out of their control, for the reasons that they have learnt about fallen Communist regimes - they can fuel unrest and can potentially be the power behind a revolution.
Unfiltered Internet access, The Ant Group, Didi, Alibaba, any company without a Communist Party member as board member. Examples are easy to find.
Plus TFA also mentioned about consumer protection and the electricity system, which you conveniently ignored.
True. And because that's the definition (Score:5, Insightful)
> Communist governments, China's and elsewhere, try to put an end to anything that (A) can become big in their country and (B) out of their control, for the reasons that they have learnt about fallen Communist regimes -
That's true. There's also a simpler reason that Communist governments take down anything that is outside of their control. Communism IS the government control of all economic activity. That's the definition of communism.* If they allowed economic freedom, they wouldn't be communist.
* Unless there are fewer than about 8 people in the country. If there are only six citizens, the government can be the six people acting directly themselves.
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WTF are you even talking about. It's NEAR IMPOSSIBLE right now to buy bitcoin, etc. with RMB. How are you going to do it? It's FUCKING AGAINST THE LAW. Are you going to wire tons of money in RMB to get bitcoin? You're fucking stupid. You either pay in RMB cash, which is risky as fuck, as you don't know if the deal will be fraudulent. Or you fucking convert your money into dollars or some other currency outside of China, and then buy bitcoin, which means you ALREADY have your fucking money outside of
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THIS. This is why I think communism is fundamentally immoral as oppo
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I also like credit unions. Also insurance companies that are owned by the members (any company with "mutual" in the name) are sometimes good.
Credit unions and mutual insurance companies are controlled by the relatively small group of people who own them, not by the entire country. Control comes from buying in, just like every big company that has stock. The only difference is that in order to buy stock you have to also be customer.
Control by the owners, such as credit unions, is the definition of capitalism
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You can substitute "USA" for "China" everywhere in the article. Every day some apparatchick (Yellen, et.al.) or banker gets up on their hind legs to bleat about crypto. All it does is reveal their deep insecurity in their own product, with good reason.
The Establishment is running scared of blockchain technology and DeFi and will use any excuse and misdirection to keep their perquisites.
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Please. There's nothing to be scared of at this point.
BTC back when it was new could have developed into something concerning. Today, it mostly developed into a way for extracting money from the stupid, tax evasion, and a global lottery. BTC refused to scale, and as a result it's pretty much useless for the average little guy. It's also deeply linked with USD, which wasn't the goal originally. Early adopters dreamed of the days when BTC would be valuable for its own sake, not just as a token to be hoarded a
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I never mentioned BTC.
Re: True. And because that's the definition (Score:2)
Didn't have to, if the horse out front couldn't make it, I doubt the ones behind will.
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Re:The narrative is always going to be... (Score:4, Interesting)
The Chinese people are like people everywhere else. They are enterprising. Which is why economic systems that embrace that (capitalism) are fundamentally better and more just than ones that attempt to thwart it. Anyone who lived under or near (I have a lot family that were foreign service people) the old Soviet union knows at least in its later stages, theft, graft, fraud were endemic. Lots of stuff "fell off the back of trucks".
China might have had control of Bitcoin, if indirectly by being able to identify and exert pressure on the minors but they did not have control over the design. Clearly it lacks some of the features you'd design into a currency where you want to be able to track everything everyone does. While the FBI has proven its possible to track stuff backward effectively, with the mixers and exchanges that isn't the efficient process the CCP would like to have to make real-time adjustments to peoples "social score". Bitcoin leaves open enough room for low level criminals to still use it for black market exchange - Since the CCP isnt about to just embrace free enterprise they are seeking better ways to extinguish it.
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China already had "control" of bitcoin, etc. They made up the majority of miners and could already do 51% attacks.
I know that China is this authoritarian state, but I think you overestimate the amount of control the central government has over provinces and the individuals living there. It's not like they could ring up every miner and command them to conspire together for a 51% Bitcoin attack.
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China already had "control" of bitcoin, etc. They made up the majority of miners and could already do 51% attacks.
Indeed. They have absolutely no interest in doing that, obviously, or it would have happened. The completely idiotic thing here is people claiming that the minuscule fake "value" BTC has would be of any interest to China. (No, you cannot just multiply the number of "coins" with the current price to get that number.)
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I'd say there are three 'problems' for Bitcoin in China.
For one, control is an issue. While the nation may have been doing the heavy lifting, the mechanism for control is far too indirect for their tastes.
For another, the energy usage was a real issue for them, like you say.
Finally, the mining was sucking up too much computer equipment. The supply chain strain was already enough to induce more investment in 'out of china' capacity, which threatens their economic dominance. The supply constraints coming at t
Central bank digital currencies (Score:3, Insightful)
Re:Central bank digital currencies (Score:4, Informative)
I think the main distinction is who keeps the ledger: Is it largely decentralized like in the US banking system, where large banks work out direct settlement protocols to balance their books, or is it centralized like Bitcoin's primary ledger (except PBOC as the authority)?
Bitcoin balances the risks inherent to a central ledger by combining strong incentives for lots of people to copy it with a proof-of-work mechanism for extending the ledger. Centralizing changes to the ledger, which is presumably a major feature of the Chinese system, removes those compensating controls and leaves the risks.
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If you are a centralised authoritarian government who wants absolute control of a digital currency, why on earth would you need a blockchain based currency? It makes no sense. better to just have all transactions validated (and logged) on servers you control without all the mucking around with proof of work, etc.
Re: Central bank digital currencies (Score:4, Informative)
It's not a blockchain currency which is why they say digital currency and the generally misconstrued hatred of blockchain as purely a means for crypto currency is something most Chinese tech sees beyond. they are developing the technology and software but not for currency.
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Only decentralized blockchain is Bitcoin?
That is not really correct. There are tons of other blockchain based cryptocurrencies. Hell, even something as basic as Git has GPG signed code commits, which pretty much turn coding changes into something blockchain based.
Blockchains have been around for a long while. It was only the pump and dump-ers who decided to make a new buzzword to get people throwing cash their way.
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Decentralization = Removing all counterparty risks
The "all" is very important here
If you look closely, these systems actively promoted as "decentralized" are just inserting a con artist at the heart of their system. In other words, these products are not designed to be decentralized. Here is a quote about Charles Hoskinson an associate of Vitalik: https://twitter.com/cryptonato... [twitter.com]
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Ding bat. The Chinese digital coin will be backed by the total capital worth of the country. Bitcoin is backed by nothing but bullshit. Why the hate for the bullshit coin because it will damage the value of the Chinese government digital currency which is backed by the value of the entire country. Not to forget the giant ponzi scheme that is bullshit coin 'er' bitcoin.
How the fuck can you not see that difference. Unbacked make believe money versus currency BACKED by the worth of an entire country. Ohh you
Re:Central bank digital currencies (Score:5, Insightful)
I came here to post the same question. I found this article [cnbc.com] which makes it sound like a normal debit card system like most of the world has already. People deposit money into the bank and they get "digital yuan." It sounds like China doesn't like AliPay and WePay dominating the payment market and is making their own. But the article's author sounds like they have never used a credit card or debit card in their life and can't seem to explain how this is any different. Yet they keep treating it like it is a new currency instead of just a payment system. Maybe there is something more I'm not understanding?
Re: Central bank digital currencies (Score:2)
Credit cards have huge fees only hidden by government corruption.
At first letting them get away with collusion and forcing merchants into contracts which don't allow them to discriminate with fees. Later actually stepping in and "protecting consumers" by making it illegal to discriminate with fees. They have now even bought enough EU politicians to run the same racket here.
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No, I understood that part. It was covered in the article. Plus, China already does such things to the extent that they can. What the OP and I are not understanding is why they are calling this a new currency instead of calling it a new payment system.
Re: Central bank digital currencies (Score:4, Insightful)
It means peons can have a zero counterparty risk account with the central bank and use it to make electronic payments. Potentially with zero fees.
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If a pig was an eagle, it would fly (Score:2)
> If it wasn't a huge fucking waste of energy, and actually somewhat stable
The design of Bitcoin *guarantees* that it's astable. Math mathematically, it can't be stable as long as it has any significantly popularity. (Though the value could be stable at zero, like Raycoin).
It'll also always be a huge waste of resources.
If Bitcoin was stable, it might have some use as a currency and if you were Joe Manganiello you'd be sleeping with Sofia Vergara. You're not; it's not. Never will be.
Buy your graphics cards now (Score:1)
Now is the time between them not being allowed to mine bitcoins and them hoovering up every new graphics card to mine their Chinacoins.
Re:Buy your graphics cards now (Score:4, Insightful)
You can bet your ass Chinacoins would not be a cryptocurrency, but a traditional digital currency - that is, centrally controlled and highly efficient.
I'd like to imagine that the reason Western governments didn't instantly squash cryptocurrency like a particularly creepy bug, as per tradition with any online payment system of any kind that wasn't locked down tight as a Paypal account, is that they saw it as the lesser of two evils compared to Chinacoins and thought it could buy them some time, but it was probably just Trump administration incompetence/criminality (plus a slight lack of vigilance on the part of the Obama administration for failing to catch it early on) creating a rat race to the bottom in which other governments also failed to act, afraid to miss out on potential profits the US could reap.
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I'd like to imagine the reason Western governments -- particularly the United States -- didn't instantly squash cryptocurrency is because they lack the authority to do so. Unlike some authoritarian regimes, in the US (at least
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LOLWUT? Every other payment system, such as Paypal, is mummified in red tape, laws that the US government put in place because they damn well have the authority to do so. They can keep you from buying a foreign van that doesn't have X number of seats in it, so you bet your ass they can control where and how and to who you send money to overseas. That's why international sanctions are more than just strongly worded letters.
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I didn't say the process is perfect, and I did point out it's frequently abused. In PayPal's case, it's a US-based company and thus subject to US finance laws. This is a poor analogy to cryptocurrency.
A van, being a physical asset that must be imported, i
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This is sovereign-citizen level pseudolaw. The US could ban you from using your US credit cards, bank transfers etc. to do transactions with anything that touches BTC and could theoretically make it a crime to do any transactions in BTC just as it's a crime perform transactions with certain terrorist groups. Somalian pirates probably claim to be nationless too, but good luck doing any transactions with them either.
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Really? Under what statute? You've made a declaration. Now back it up.
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Found some great info here:
https://www.globallegalinsight... [globallegalinsights.com]
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The computation/energy intense facet of crypto currencies are to facilitate the goal of decentralized operation. China has no interest in a decentralized currency nor do they want to waste resources they don't have to.
Advantage of early mover ... (Score:2)
If China can get its solution out quickly then it will be well placed to become the de-facto digital currency provider/solution. Once there then it will be in a position to control or at least see how funds flow around the world. That will give it knowledge and power.
but an controlled currency will be under banking l (Score:2)
but an controlled currency will be under local banking laws.
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WeChat pay and AliPay, which work a bit like PayPal, are their defacto solutions.
I’m not really sure how a government run alternative would be any better, apart from not having the risk of those private companies going out of business.
Digital currency if for idiots (Score:3)
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Have you seen how incredibly slow BTC transactions are (unless you pay a lot)? I would say Western Union is quite a bit superior.
While there are many reasons... (Score:5, Interesting)
My guess would be the primary cause of heartburn for the CCP is the fact that bitcoin is an efficient way to exfil capital from China. It has been tolerated because corrupt officials and their ctonies are the enabling its existence in China and are the primary beneficiaries, but after squirreling tens of billions of dollars (or more) out of the country, they're trying to stuff that genie back into the bottle.
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Re:While there are many reasons... (Score:4, Insightful)
The CCP digital currency is going to be basically TRANSACTION free. It's the equivalent of basically using cash in your wallet. That's why banks and credit card companies, etc. are scared as fuck about digital currency because it has the potential ability to cut them out. Why deposit money in a bank if you can just deposit it in a digital wallet that is just as safe. Banks deposits before served a purpose because no one wanted to hoard their money between their mattresses, and no one wanted to carry a wad of cash to do a transaction. There was also the idea that they would provide interest, but with interest close to 0%, much below inflation, does that continue to serve a purpose?
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Not only do bank deposits pay very close to zero for interest, but on the credit card side of the house, they continue to charge usurious interest rates for anyone who allows themselves to go into debt with their card. Charging 15-25% APR for interest on credit card balances when the cost of funds is practically zero is pretty hard to defend. Some premium to make a lender whole in the event of fraud is one thing, but 15-25% is scandalous.
Personally, I just pay my full balance every month, but it is an eas
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> Why deposit money in a bank if you can just deposit
> it in a digital wallet that is just as safe.
Well, for starters we don't know for sure that it IS safe. In fact, it's not. Remember the gas pipeline ransom paid in bitcoin that was almost immediately recovered by the FBI? Bitcoin wasn't exactly safe a month ago when that happened, was it? Nor is it cash-equivalent when the feds can track your every bitcoin transaction and simply take your bitcoin away remotely if they feel like it. Plus, there
Cashless society is authoritarian to the core (Score:1)
They will tell us that the Chinese central bank is pure authoritarianism in issuing electronic money and enforcing and controlling everything their cities buy and sell with it. And when people get their digital account zeroed because they made fun of their president, we will be told how draconian and terribly dictatorial that regime is.
And then we get the exact same thing in the West, with the exact same controlling and monitoring all buying and selling of all citizens, but it will be the paragon of freedom
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I would say that we already have that here in the West. Effectively its the same thing, since the Dollar basically exists only as a spreadsheet in the Fed.
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Yes and no.
Concerning inflation, yes. They can simply produce trillions of dollars out of thin air just because they want to. And it will be unamerican to disagree with that if the red troupe is in power, or white supremacist if it's the blue period.
But they cannot yet control or interdict all transactions between everyone, nor can they render a dissident poor through cliciking a simple button. People can still trade untraced goods in untraced cash notes with known dissidents or save cash in their piggy ban
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Re:Cashless society is authoritarian to the core (Score:4, Insightful)
Very rich response coming from the nation with the most incarcerated people per capita. Really. The land of the free. Marijuana an essential business to open during the pandemic, yet millions in jail for selling it a few years earlier. Really. Lecture me about freedom.
We don't "tut-tut actual white supremacists on Twitter", we "tut-tut" about 80+ million people (some of them supremacists) that disagree with one point or another of the Democrat party. And "we" don't do that, the operators of a lot of platforms do. And they don't "tut-tut actual white supremacists on Twitter", they purposefully and exhaustively deny people basic freedom of expression and political representation, up to and including basic Internet access and basic bank accounts for the misdeed of "not censoring enough disagreement with the Democrat party".
That, and bashing their head in with skateboards and hardened steel bike locks for the crime of wearing a red basecap in public.
Thank you for proving beyond a doubt that you and your group *will* definitely try to remove the digital money from "actual white supremacists" and whoever you label as such, when your group gets the opportunity to do so. You will do that and you will be proud of it. And you will lump "critics of censorship" and "first amendment defenders" with "actual white supremacists" and defend any action neccessary to silence them all, however extreme that may be. You will never criticise the treatment of "actual white supremacists" or disagree with the ever widening definition of it.
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Ah yes, the "violent" lego insurrection. Where the only person to die was killed unarmed by a Lt in the capitol police, the same Lt who years earlier decided it would be a good idea to leave his sidearm in the bathroom. Yeah. That incompetent asshole. While the House leaders lied about the events of the day in their 2nd impeachment attempt since it was PUBLIC KNOWLEDGE(Per an interview with a family member by Propublica) by Jan 8th that Officer Sicknick had not been injured in the "insurrection" and the FBI
Natural, as cryptocurrency is a pyramid scheme (Score:1)
Like all monetary systems, a cryptocurrency is simply made up
- and in the case of cryptocurrency, the medium of exchange has no underlying value/usefulness (as opposed to e.g. gold).
Therefore it is natural that any government with an already functional monetary system will not adopt an existing cryptocurrency - because as such, they would just be paying to buy into someone else's made up value. Instead, that government can just create their own cryptocurrency - and mandate that it is the only legal
Re: Natural, as cryptocurrency is a pyramid scheme (Score:2)
Plus monetary policy depends on inflation: Money stashed under your mattress needs to lose value, not gain, or else spending and investment stop, production grinds to a halt.
Stopping corruption (Score:4)
What a load of crap (Score:2, Troll)
In actual reality, the Chinese just see that BC is killing their electrical infrastructure and, besides, is a very bad idea anyways. They also see what anybody halfway competent sees: It is slow, it is insecure, it is purely used in a Ponzi-like fashion, and all potential advantages will go away once it is fully regulated (and it will be).
Seriously. Stop the pumping. Have you not defrauded enough people?
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China will not have a crapcoin of their own. At least not anything beyond a meaningless stunt. You are stupid and fell for the propaganda.
Two observations: (Score:2)
It's about who can print new money. CCP is either able to print new money from nothing, or has already minted a reserve.
This is all I have to say about Jim Cramer: https://www.youtube.com/watch?... [youtube.com]
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False, only delusional cryptocoin shills are thinking that. Energy load and crime are the only concerns, since bitcoin isn't money just a gaming/gambling token. It is no threat to money, isn't a substitute for money.
Neofascists wanna neofascist (Score:2)
News at 11.
Danger Lee Wong! (Score:3)
If this has the desired effect I wouldn't be surprised if U.S. warships show up on China's doorstep.
Lessons from WeChat (Score:3)
The lesson here is not to trust any digital currency that the Chinese government can control. Your access to your funds could be blocked for no reason and there will be no way to recover them.
The article doesn't make sense (Score:2)
Re (Score:1)