China orders Bitcoin exchanges in capital city to close

I've spoken with my US equities/funds brokerage firm, and they have an FX desk, but they're still more expensive than the dedicated FX broker I found and currently work with. Before that, I was regularly raked by my US bank for 4-6% off the mid-market. I haven't seen mid-market spread + 0.01% anywhere, and only seen + 0.1% thrown around for 6-figure and up USD transaction sizes, wire transfer (ACH or SWIFT), at least several of those per month volume. TransferWise works at mid-market + 1%; but they don't work with paper checks. What you're getting is even better than cryptocurrency exchange-facilitated conversions, so I'm very interested in finding out more if you can post a pointer in the right direction. Thanks.

Murder is kind of hard to use as an example because there's typically really strong moral and cultural understandings that you shouldn't be doing that. But lets think of a more nuanced example. Lets say there's a lake that's being overfished. The government doesn't want to outlaw all fishing, but they want to rein in the more massive fishing operations. So they outlaw using trawler nets in the lake, but people using conventional poles or spears can keep fishing as much as they want.

Now say someone comes along and figures out another method to massively overfish the lake without using nets. In civil law countries if the law is written to specifically outlaw the use of nets I think the people would look at the law as faulty instead of the person who exploits the loophole. After all, whatever method they figured out isn't actually illegal. And the way to solve the issue is to update the law, not to punish the clever loophole seeker.

But in common law countries the law would more likely be written in a way that can't be as strictly interpreted. There might be wiggle room that would allow a judge/jury to basically say "Look we didn't explicitly forbid what you are doing, but it's clearly something this law was meant to prevent. Therefore you're guilty, and case law will be updated to include this verdict."

At least that's how I interpret it.

> Clients will ignore invalid blocks when determining which chain is difficultywise-longest. Mining clients will not build on top of invalid blocks. Clients will not propagate invalid blocks (or invalid transactions).

Proof of work does not mean full nodes trust miners blindly. It only means they prefer the longest chain that follows the rules.

Like I said, yes, with 50% mining power you can double-spend all you want. But other nodes know what you are doing, expel you from the network, and discard your work, just as if you had 25% of hash power or 0.1%. The Bitcoin blockchain is not a democratic system where the majority always wins.

If someone with 1% hash power ignores certain blocks, they make a chain that's totally irrelevant in their own corner. If someone with 60% hash power does it, they win.

https://cash.coin.dance/blocks/profitability

Having 51% of hash power doesn't mean you mine 100% of blocks. That's not how Bitcoin works. With 51% you will probably mine around 51%.

The system creates trust.

Whether we can achieve this goal through cryptography and game theory remains to be seen.

Anyways, Bitcoin doesn't seem like much of a threat to the kind of power developed countries have over their currencies. The USD isn't going anywhere and nobody is using cryptos for day to day purchases or servicing debt so the fed will remain firmly in control of the money supply and interest rates.

It is much more of a threat as a method of capital flight to undeveloped countries (eg. China) who like robbing their citizens through inflation, currency manipulation, and capital controls.

I think that's a great thing.

Also, saying some people "are wrong" is not an argument.

> You think it's for good reason. Many people think it's for bad reason.

In reality, you are both right. There are both 'good' reasons and 'bad' reasons why the state wants control over monetary supply and flow. I feel that as electronic currency transactions has gained ground over cash, the 'bad' reasons have become stronger and more important.

The question really is to if degree that bitcoin undermines the good reasons for state monetary control balances with the degree that it undermines the bad reasons. I suspect that as electronic transfers become increasingly ubiquitous, we will see the importance of bitcoin in maintaining personal freedom increase.

It's really a perfect analogy. Apparently some people think that cryptocurrencies and ecommerce were both founded or significantly based on criminality, but I think there are some great advantages and opportunities with both that have nothing to do with crime. With cryptocurrencies, that's still largely a prediction, but with ecommerce I think it's ludicrous to claim that its success is owed to crime to any meaningful extent.

“The price of BitCoin has a 91% correlation with Google searches for BitCoin” http://uk.businessinsider.com/bitcoin-price-correlation-goog...

Obviously BTC can be in a bubble & whilst still having real value - the two things are not necessarily connected. (Although having a good future value story is helpful for a bubble to form in the first place I would argue.)

How does one define supply with a divisible unit like bitcoin? Arguably, supply does not diminish, rather people use smaller units of bitcoins.

China is able to track their populous really well, or at least have their population believing so, and thus anything that adds pseudo-anonymity kinda ruins their mission. In the future it is probable that all countries will have their own cryptocurrency, backed by some sort of tangible asset like Au (gold) or Ag (silver). What strikes me as very important for the US is establishment of a national cryptocurrency. It can be anonymous (everyday cash is essentially anonymous), but the consensus on how to regulate one is very much a process of education (elder generation finance people don't really get bitcoin yet). So once regulatory measures can be taken to ensure there's no theft etc, then it'll be easy. China's thinking on the matter is that if it cannot be regulated, shut it down and make a version that can be.

Imagine a system where the money is issued by a central authority. The users would register their identities with the authority, and receive a certificate. When the bank issues money, it assigns a random serial number R, and it signs it with the bank's key and specifies whose money it is by the user's public key U: S[U, R]. Now suppose Alice has S_Bank[Alice, R] and wants to pay Bob. She can sign the money over to Bob: S_Alice[Bob, S_Bank[Alice, R]]. Bob could do the same to give Charles some money.

Eventually, someone will deposit the money they received with the bank. The bank will check if money with the same serial was ever deposited previously. It can then catch the cheater who double-spent the money by looking for the "fork" in the signature chain. So if the bank tied identities to some offline ID, the police can go arrest the fraudster (or you can imagine other punishments, like blacklisting them from the entire system, etc.).

Notice that even though money creation, identification, and double-spending defense are all centralized, payments remain decentralized: unlike credit cards etc., in this system, one need not contact the bank in order to spend money. True, there may be more of a delay in catching double spending; on the other hand, we have gotten rid of the very expensive mining process. We have also avoided one of the more subtle and annoying issues with Bitcoin: bootstrapping the P2P connection (you only need to connect to whomever you are trying to pay when you are trying to pay them).

[This is just a simplified version of "ecash," which cryptographers have been studying since the 1980s. What I left out is the mechanism for ensuring payment privacy, which is pretty interesting in the offline payments case.]

It's a dystopian government's dream.