Chinese can now buy real estate with Bitcoin
finextra.com
finextra.com
[1] http://finance.yahoo.com/news/uncomfortable-truth-chinas-pro...
[2] http://www.forbes.com/sites/realspin/2013/10/28/in-china-the...
http://www.zerohedge.com/news/2013-09-10/money-laundering-ex...
A lot of chinese Bitcoin users have reported this stance, eg: https://bitcointalk.org/index.php?topic=320260.0
AFAICT bitcoin presents the only real existential risk to the US dollar. It's a long long road to get there and it might fail spectacularly or simply become just another currency, but even if there is only 0.1% chance of it upsetting the US dollar, that is 0.1% chance more than any other currency out there.
Personally, if this does play out, I see the US to be one of the last countries to get on the Bitcoin wagon and lose out. Our currency is the most fit and we have the least amount to gain in the short term from adopting it. But this does not change the fact that many countries with far less stable currencies and governments that have proven themselves untrustworthy with their monetary policies, where the citizens would flock to a currency like bitcoin once security and usability issues are addressed. I'd say that every country where inflation is over 4% per annum is a candidate for wanting to acquire bitcoins.
- track all financial transactions by all people to find dissidents and find NGO funding sources
- throw 10% of a datacenter at it whenever they feel like it and pull off a 51% attack
- lock up a huge number of bitcoins via the above point
The only thing analogous to this with real currencies are printing presses that people somehow get a hold of and are able to print themselves. The nice thing about real currency though is we have some ways of knowing whether they're real or not (like looking under a light), but you can't really determine whether someone's bitcoins came from abuse because technically it's legit. Only solution I could think of would be if there's a way for the networks to have throttling so miners could only make so many per day or per hour or some other metric.
The rise of ASIC miners have made the BTC network essentially invulnerable to attacks from general-purpose devices. SHA is very amenable to being directly implemented in hardware, making general purpose computers useless for bitcoin.
Because of all the new hashing power coming from all the new asic miners, difficulty has risen to the point that you'd need more than four hundred million modern cpu cores to take over the network. Using top of the line GPUs, you'd need more than 5 million of them.
China could take over the BTC network, however, to do so they would have to attack it with ASIC miners. This would imply ~6 months of preparation, tens of millions in funding, and they'd have to make the decision to pull the trigger some 3-4 months in advance or the money would go to waste.
Let's assume an attacker is very good and needs only 6 months to design his own ASICs and build data centers to host the farm. The network is at 4 Phash/s today, so 6 months from now we should be around 4 * 2^6 = ~250 Phash/s (the network has been doubling in size every month for the past 10 months). The best ASICs, 28nm KncMiner, are approximately 100 ~Ghash/s and 100 Watt each. So an attacker would have to build 250 Phash/s of these to clearly outperform the network: that is 2.5 million chips at 250 megawatt total. And to plan for a potential delay of 30 days in his plan, an attacker would have to build not 250 Phash/s but 500 Phash/s of ASICs to attack the network. 5 million chips. 500 megawatt data center. For comparison, Facebook spent $210 million on their 28 megawatt Prineville data center. So a 500 megawatt data center would probably cost $3-4 billion. Even the well-funded NSA couldn't get their comparatively punny Utah data center to run correctly and it has been delayed by more than 1 year: http://www.pcworld.com/article/2052960/nsa-data-center-suffe...
Is China seeing Bitcoin as a threat? No. And even if it was, is it big enough for them to be willing to spend $3-4 billions to destroy it? I don't think so.
There is no cost-effective way to destroy a well-designed decentralized technology/protocol, plus it would require co-operation of most countries to destroy it.
Besides, I bet they can cook up more efficient devices than commercially available asics.
Also: China "locking up" coins would do nothing to stop or destroy it. It would just drive the value of the remaining coins higher and as we are seeing right now, an appreciation drive the interest in Bitcoin up, not down.
Ah, the mystery of HN ratings...
That's coming up on prices in SF, and a little bit more expensive than Boston. I had no idea.
And large is an understatement -- everybody is betting everything on it.
Pretty much all of it. People in Shanghai, for example, use properties as a cash-storage mechanism, thinking it more secure than a CD.
This is all going to end badly.
People may not realise it but the big issue for many Chinese or foreigner earning money in China is to get it out of the country. The contemporary art market is in fact fueled by this escaping money, because it is easy to under evaluate a piece of paper with two strikes on it, but recently there is a crackdown against that and experts are checking luggages. Bitcoin might be a much better alternative.
[1] http://thegenesisblock.com/bitcoin-climbs-highest-price-sinc...
Anyway, I think the mystery around bitcoin I'd very captivating a story but probably the answer is more simple than these conspiracy theories, and I was surprised the day I read pg himself give credit to them.