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Comment by Pyxl101 | Hacker News Reader

How is it irrelevant? You can buy Bitcoin with yuan, transfer the bitcoin to a foreign exchange, and then buy another currency like the US dollar with the bitcoin, thereby circumventing capital controls.

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> thereby circumventing capital controls

You can also invoice hundreds of millions in fake orders. This is how the bulk of exfiltration occurs.

Addressing the rounding error before the bulk means other concerns are at work. I am ignoring, in this argument, that recent policy—preceding these orders—calls for more capital export, to keep down the yuan.

The difference I think is that bitcoin allows someone with no connections to bypass capital controls. I'm not saying bitcoin isn't a rounding error, I'm sure other priorities (like ICO scams) are at work, but that might be another point.

But someone with no connections would presumably not have that much capital to move either, right? They'd not move much volume even if they bypassed capital controls.

It can be dangerous though. If suddenly several million citizens start transferring small amounts you can easily get outflows of several billion USD a month. Done by a few that would be an amount easily noticed.

How do you buy the bitcoins without the state tracking you? FYI the US is doing that also, you cannot buy on coinbase without providing ID... they want to be able to track big buyers.

You could mine, even if it was unprofitable. Spending 10 million in mining costs to produce $5million in bitcoin is still a win for a lot of people trying to move money out of China.

Does that work - I think the mining reward is 25 BTC, about 75,000 USD. So for 7.5million thats being the winning miner 100 times.

I honestly don't know what setup it takes to be reasonably certain to be the winning miner these days - does anyone have stats on how many miners and how often one might be expected to "win"?

The stats don't really matter, because the market is designed to equilibrate the price: it costs 7.5 million to mine 7.5 million's worth (in expectation, net present value and all that), and always will. If you're worried about reducing your variance you can join a pool rather than mining directly.

But over what time period?

There was an article posted a few weeks ago about a large Chinese mine that was doing $200K/day.

Sure, and that's a lot, I'm just wondering if there's anything approaching a investment->return timescale.

Not that it really matters! It's not like I have a few mil hanging around looking for something to do...

At a guess we'd be talking 6 months - 2 years - my vague memory/impression is that's roughly the timescale on which mining hardware goes from new to worthless. If you're more vertically integrated in terms of buying datacenters/chip fabs/what-have-you then I'd imagine longer.

You can mine in a pool that distributes the pool's winnings proportionally to hashpower to its members. You don't need to actually mine any blocks on your own.

The largest mining pools were based on China.

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