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Op-ed: Impossible to de-Chinalize Bitcoin

Note: the blog is written by Huang Siliang, an opinion leader in Chinese bitcoin community, on 13th Feb. It’s an interesting read along with the tide of de-globalization. 

de-Chinalize Bitcoin

Chapter 0 Introduction
PBOC has been strengthening the supervision to domestic Bitcoin enterprises. Companies related to bitcoin trading are paranoid and introduce a variety of restrictions on transactions. Harsher one prohibit Bitcoin withdrawal while easier company impose other policies to increase trade friction. On the other hand, PBOC still reserve abundant cards to play in terms of regulating Bitcoin.
It’s under such a background that topic of “de-Chinalize Bitcoin” is getting popular in the industry. My suggestion is to abandon the idea completely. It’s impossible to de-Chinalize Bitcoin.
Chasing profit is the nature of capital. Bitcoin is a product bred by capital. Therefore we describe Bitcoin as a speculative asset, form of investment or currency. It’s impossible to control such nature as it is the basic instinct of capital. The law can restrict, induce or divert (the flow of capital), but it cannot be prohibited. As Karl Marx says, if capital has a hundred percent profit, it dares to trample all the laws of the world.
It is a natural law, just like gravity. The government cannot prohibit capital from gaining interests, just as the government has no power to forbid gravity.
But what if the government decides to go against the law of nature? Say the almighty central bank decides to ban Bitcoin from being chased by capital.
Similar cases happened before if you look back in the history.
Before China implemented reform and opening up policy, the government legislation was written to prevent the peoples of the country to pursue capital profits. Any civil business behavior was treated as treason. However, the villagers in Xiaogang decided to act against the government policy. They even signed a life and death contract before implementing the household contract responsibility system, which eventually led to the opening up of China and ultimately became a symbol of revolutionary events. “Fool melon seeds” (snack food) was blasted by the whole society for its business model (first company to promote prize-giving sales, banned by authority later). But finally the factory fried all the sunflower seeds in the country and the country started importing sunflower seeds. The case eventually led to bestowing of legal status to the country’s self-employers.
The container was invented more than 50 years ago. As a revolutionary means of cargo transportation, container has greatly lowered the cost of transport, making the Chinese products far more cheaper than if they were manufactured in the suburbs of New York. The global economic pattern was reshaped. Standardized, automated container casts a direct impact on the livelihood of the dock workers. These established parties were trying to prevent capital from chasing higher profits. Workers resisted container in various forms such as rallies, strikes, and 21,000 New York dock workers gathered at Madison Square Garden to indict the evil of container. However, all this action was futile against the wheel of history. The trend of the new technology is unstoppable. The container soon prevailed in the shipping industry.
Last year the taxi driver resisted the Uber-like car service by violence. They went on strikes, petition in front of government, beating Uber car driver … … Does it stop capitalists from creating higher profit by integrating more advanced resources and technologies?
More brutal story could be tracked back to over one hundred years ago, the Qing dynasty believed the country had everything they would ever need and those foreign businessmen could make money through the mercy of the emperor. When the emperor wanted to stop them from doing business with the Chinese people, then the foreigners declared wars just to force the opening of business. This is the nature of capital.
Chapter 2 Tug-of-war between government and Bitcoin will continue

Now bitcoin has passed the most brutal confrontation period with government. Led by the US government, through the lobbying of American entrepreneurs, a number of states have clarified the currency and the commodity attributes from a legal perspective.
But like Uber, Bitcoin naturally disrupts the interest of large numbers of establishments related to fiats. The relationship between Bitcoin and government will not be clear. In the process of colliding with the old order, Bitcoin will have a rough time. But the adventurous instincts of human capital will play an important role in this process.
This year Chinese government chose to confront Bitcoin in a very aggressive way. Chinese bitcoin entrepreneurs have to tackle the situation arduously, hoping to reach agreement with the government and stumble a way out for survival.
The social benefits brought by Bitcoin is positive as a whole. It’s impossible for any liable government to take chances to protect the establishment’s interest by comprising the social good. The most logical action for a government to take is adoption of wait-and-see attitude.
We should realize that Bitcoin is no longer in its infancy, it is growing fast every day and has been welcomed by people. I want to say that it is still in a clumsy adolescent stage, trying to win the respect of others, struggling to face the challenges of society, always showing the world its strength. There is no sign of slowing down for its growth.
The relationship between Bitcoin and government is inextricably interwoven. Bitcoin industry needs government support while government can also use Bitcoin for the benefit of society. The currency properties of the Bitcoin have naturally hurt the interest of government. Therefore the gaming between government and Bitcoin will be sure to last in the coming days.
Chapter 3: Bitcoin will continue to survive in China, one of the most important economic nodes in the world
With the strong-hand of central bank, China’s Bitcoin entrepreneurs are giving away market shares step by step. Chinese exchange volume took a nose dive and had given away the first place to Japan market.
However, the price collapse did not happen as much people expected. Currently the normal price stands at 7,000 CNY. OTC trade flourish as obtaining BTC through exchange is getting more and more difficult. Demand for acquiring bitcoin will not vanish with the central bank’s attitude. Such demands used to be met by centralized exchanges and now shifted to OTC market, which is even harder to monitor.

in February 2014, Russia issued a direct order to ban bitcoin, which resulted in the booming of trading via localbitcoins. By the end of 2014, OTC trade in Russia had increased over 300 times. This ban is basically meaningless, but will push bitcoin trading activity into the OTC and underground market, where money laundering and capital flight are not being regulated.

Today I deposit 100 yuan to OKCoin to see if the exchange is still in normal operation. My bid and ask order are taken away smoothly. There is a 200 price gap between OKCoin and other exchanges that allow bitcoin withdrawal. As long as the price gap is there, people will take the risk of withdrawal suspension to realize profits.
Human law cannot defy the laws of nature. With enough profits, capital dare to fight against any legal sanctions. In other words, “if there is a hundred percent gain of the capital, it dares to trample all human law.”

China is now the center of the world, or is increasingly becoming one. China is somehow a rising country, which is not a pale patriotic remark. Why the Bitcoin mining chips and mining farms are mostly located in China? Because the manufacturing base of electronic products is located in Shenzhen and Dongguan. The deployment of hashing power in China is the option with lowest cost and the highest profit. There is not other way around.
It’s profitable to operate bitcoin-related business in China, which is the inevitable result of China’s economic development. Similar business in Afghanistan does not yield profits because it is a poor places. In China there is a profit, you can not prohibit the bit coins climbing capital in China to take root.

Therefore there is no way to de-Chinalize bitcoin, even if it is banned by the central bank unless China is no longer part of global economy, or Bitcoin is no longer a good investment and a good currency.
Chapter 4 the End
If there is a hundred percent profit, capitalist dare to trample all the laws of the world. If there is 500 yuan gap between OKCoin price and transferrable bitcoin, I am going to deposit in OKCoin.

COMMENTS(32)

  • hl5460
    8 months ago hl5460

    PBOC has been strengthening the supervision to domestic Bitcoin enterprises. Companies related to bitcoin trading are paranoid and introduce a variety of restrictions on transactions. Harsher one prohibit Bitcoin withdrawal while easier company impose other policies to increase trade friction. On the other hand, PBOC still reserve abundant cards to play in terms of regulating Bitcoin.It’s under such a background that topic of “de-Chinalize Bitcoin” is getting popular in the industry. My suggestion is to abandon the idea completely. It’s impossible to de-Chinalize Bitcoin.http://news.8btc.com/op-ed-impossible-to-de-chinalize-bitcoin

  • supergenics
    8 months ago supergenics

    Bitcoin is borderless currency so anyone can join. The so-called “de-Chinalize” is actually trying to draw a border, and the idea is not aligned with the principles of bitcoin…

  • Senor.Bla
    8 months ago Senor.Bla

    I agree with supergenics. People try to fit Bitcoin is terms they can deal with. I fact i think people in general will find problems. If you look hard enough you will always find some kind of X-lization, just so you can demand it sw-x-lization. Whether it is a country or a region with to much hashpower or one entity (like a mining pool) spread over the whole world with to much hashpower. Only if you are the one with the hashpower you seem to have no problem. To a certain extent these awareness is good and healthy, but do not overdue it. 

  • 7788bitcoin
    8 months ago 7788bitcoin

    I think it should be the other way round- PBOC is trying to get people in China to “de-Bitcoinize”. It is possible but difficult due to the decentralized and P2P nature of bitcoin.

  • talkbitcoin
    8 months ago talkbitcoin

    there is no Chinalize to de-Chinalize unless by de-Chinalize you mean we should kill the mentality of people thinking China is controlling bitcoin. there is even multiple topics about it. and when you look deeper into the issue you see that it comes from the numerous FUD that is being spread everywhere each time China makes a move.the mining power is getting distributed with passing of time, Georgia is now becoming big, so that reason is already dead.the volume they were reporting is also dead since now we all know it was all fake volume anyways.so the question is how much longer the FUDsters are going to milk the China-controls-bitcoin-cow!

  • thepo1m
    8 months ago thepo1m

    Yes, it is possible to De-Chinalize them from the strong influence they have in Bitcoin market, thanks to Japanese exchanges the trade volume seems to be coming back, Japan exchage gave Bitcoin chance when no one was willing to try and I can see them taking their strong positions back.

  • hl5460
    8 months ago hl5460

    Quote from: thepo1m on February 16, 2017, 09:03:38 AM
    Yes, it is possible to De-Chinalize them from the strong influence they have in Bitcoin market, thanks to Japanese exchanges the trade volume seems to be coming back, Japan exchage gave Bitcoin chance when no one was willing to try and I can see them taking their strong positions back.

    Japanese exchanges are taking 0 fees.

  • hl5460
    8 months ago hl5460

    Quote from: supergenics on February 16, 2017, 08:32:01 AM
    Bitcoin is borderless currency so anyone can join. The so-called “de-Chinalize” is actually trying to draw a border, and the idea is not aligned with the principles of bitcoin…

    Chinese market is shrinking, that doesn’t concern you?

  • Xester
    8 months ago Xester

    Quote from: hl5460 on February 16, 2017, 08:27:11 AM
    PBOC has been strengthening the supervision to domestic Bitcoin enterprises. Companies related to bitcoin trading are paranoid and introduce a variety of restrictions on transactions. Harsher one prohibit Bitcoin withdrawal while easier company impose other policies to increase trade friction. On the other hand, PBOC still reserve abundant cards to play in terms of regulating Bitcoin.It’s under such a background that topic of “de-Chinalize Bitcoin” is getting popular in the industry. My suggestion is to abandon the idea completely. It’s impossible to de-Chinalize Bitcoin.http://news.8btc.com/op-ed-impossible-to-de-chinalize-bitcoin

    The main issue on China was not on getting all bitcoins out of China but the creation of fake volumes and market manipulation of Chinese exchangers. But sooner or later China will also sell their bitcoins to get profit and in time the number of volume of bitcoins in their hands will diminish  and will be distributed worldwide.

  • CyberKuro
    8 months ago CyberKuro

    Quote from: hl5460 on February 16, 2017, 08:27:11 AM
    PBOC has been strengthening the supervision to domestic Bitcoin enterprises. Companies related to bitcoin trading are paranoid and introduce a variety of restrictions on transactions. Harsher one prohibit Bitcoin withdrawal while easier company impose other policies to increase trade friction. On the other hand, PBOC still reserve abundant cards to play in terms of regulating Bitcoin.It’s under such a background that topic of “de-Chinalize Bitcoin” is getting popular in the industry. My suggestion is to abandon the idea completely. It’s impossible to de-Chinalize Bitcoin.http://news.8btc.com/op-ed-impossible-to-de-chinalize-bitcoin
    Prohibit bitcoin withdrawal? Until the regulations about exchanges be done?Or prohibit bitcoin withdrawal as fiat money (convert) ??”war between government and Bitcoin will continue”, I like this one as you have mentioned how capital against government since decades ago. Bitcoiners in China will find their ways even though gov ban bitcoin.

  • franky1
    8 months ago franky1

    Quote from: hl5460 on February 16, 2017, 10:21:08 AM

    Quote from: supergenics on February 16, 2017, 08:32:01 AM
    Bitcoin is borderless currency so anyone can join. The so-called “de-Chinalize” is actually trying to draw a border, and the idea is not aligned with the principles of bitcoin…

    Chinese market is shrinking, that doesn’t concern you?

    the chinese market was never big in the first place.just Fudsters and spammers embellished and racially exaggerated ‘china control’ purely to cause speculation

  • BitcoinAllBot
    8 months ago BitcoinAllBot

    Here is the link to the original comment thread. Or you can comment here to start a discussion. Author: 8btccom

  • ErdoganTalk
    8 months ago ErdoganTalk

    Excellent article, describing the market versus the government.

  • laughncow
    8 months ago laughncow

    Unless it forks and we have 2 1 Asian 1 non

  • SatoshisHammer
    8 months ago SatoshisHammer

    Guy needs a better translator badly and China is doing a good job of de-bitcoining itself

  • LovelyDay
    8 months ago LovelyDay

    Unfortunately within China it seems to be the government (in the form of PBOC) against the market. Or what are you allowed to legally buy with Bitcoin inside China?

  • ethacct
    8 months ago ethacct

    Obviously written by a non-native English speaker, so I’ll let the grammatical errors slide. I think some of his claims are valid, some are not.

    In my opinion, his bigger concern should be whether or not Bitcoin remains relevant. If I wanted to buy a fax machine today, presumably it would be manufactured in China. But just because China has monopoly on certain tech doesn’t mean there’s always going to be a demand or usage for it. History is full of people who think “things are going to continue the way they are because that’s the way they’ve always been.”

  • 8btccom
    8 months ago 8btccom

    Exchanges were pinned down at the moment. But OTC are getting active.

  • 8btccom
    8 months ago 8btccom

    Thanks for pointing out. We are looking for native English speaker as contributor. We will pay btc.

  • 8btccom
    8 months ago 8btccom

    We have ETC already.

  • 8btccom
    8 months ago 8btccom

    We are seeking native English-speakers to contribute. Please contact us if interested.

  • LovelyDay
    8 months ago LovelyDay

    Thanks, this is good.

    Out of interest, is BitSquare allowed in China?

  • 8btccom
    8 months ago 8btccom

    Need vpn to use bitsquare to access tor.

  • Mometaskers
    8 months ago Mometaskers

    Quote from: hl5460 on February 16, 2017, 10:18:52 AM

    Quote from: thepo1m on February 16, 2017, 09:03:38 AM
    Yes, it is possible to De-Chinalize them from the strong influence they have in Bitcoin market, thanks to Japanese exchanges the trade volume seems to be coming back, Japan exchage gave Bitcoin chance when no one was willing to try and I can see them taking their strong positions back.

    Japanese exchanges are taking 0 fees.

    Isn’t that also the reason that China seemed to have a large volume?

  • Arcteryx
    8 months ago Arcteryx

    I would say yeah lets get this train turned right around and send it straight Japan’s way! I had a theory and I think it will pay out dividends if it does come to fruition:http://bitcointalk.org/index.php?topic=1791094bitFlyer exchange all the way baby!

  • RoommateAgreement
    8 months ago RoommateAgreement

    actually it seems like it was perfectly possible to do that. China did de-Chinalize themselves. we no longer can see the same volume coming from China and then with the latest restrictions the volume on exchanges went to practically zero and everyone is not OTC trading.i hope at least one good thing comes out of this when we stop seeing so many China FUD.

  • poloniexwhale
    8 months ago poloniexwhale

    Bitcoin is a global payment system, I can’t get the idea of chinalize bitcoin, it is impossible, how can they localize bitcoin? Just more regulations doesn’t mean chinalize bitcoin.

  • hl5460
    8 months ago hl5460

    Quote from: odolvlobo on Today at 06:30:55 AM
    The Chinese government cannot regulate Bitcoin. The most it can do is regulate or restrict the use of Bitcoin by its people. Its actions do not affect anyone else in the world.
    Yes, Chinese merchants are not allowed to accept bitcoin. But sometimes regulation is contagious.

  • hl5460
    8 months ago hl5460

    Quote from: Xester on February 16, 2017, 10:27:01 AM

    Quote from: hl5460 on February 16, 2017, 08:27:11 AM
    PBOC has been strengthening the supervision to domestic Bitcoin enterprises. Companies related to bitcoin trading are paranoid and introduce a variety of restrictions on transactions. Harsher one prohibit Bitcoin withdrawal while easier company impose other policies to increase trade friction. On the other hand, PBOC still reserve abundant cards to play in terms of regulating Bitcoin.It’s under such a background that topic of “de-Chinalize Bitcoin” is getting popular in the industry. My suggestion is to abandon the idea completely. It’s impossible to de-Chinalize Bitcoin.http://news.8btc.com/op-ed-impossible-to-de-chinalize-bitcoin

    The main issue on China was not on getting all bitcoins out of China but the creation of fake volumes and market manipulation of Chinese exchangers. But sooner or later China will also sell their bitcoins to get profit and in time the number of volume of bitcoins in their hands will diminish  and will be distributed worldwide.

    Not really, OTC trade price is still higher and coins are coming in.

  • hl5460
    8 months ago hl5460

    Quote from: RoommateAgreement on Today at 04:11:33 AM
    actually it seems like it was perfectly possible to do that. China did de-Chinalize themselves. we no longer can see the same volume coming from China and then with the latest restrictions the volume on exchanges went to practically zero and everyone is not OTC trading.i hope at least one good thing comes out of this when we stop seeing so many China FUD.

    I see OTC trading volume is nearly 2000btc a day.

  • odolvlobo
    8 months ago odolvlobo

    The Chinese government cannot regulate Bitcoin. The most it can do is regulate or restrict the use of Bitcoin by its people. Its actions do not affect anyone else in the world.

  • Amph
    8 months ago Amph

    Quote from: hl5460 on February 16, 2017, 10:18:52 AM

    Quote from: thepo1m on February 16, 2017, 09:03:38 AM
    Yes, it is possible to De-Chinalize them from the strong influence they have in Bitcoin market, thanks to Japanese exchanges the trade volume seems to be coming back, Japan exchage gave Bitcoin chance when no one was willing to try and I can see them taking their strong positions back.

    Japanese exchanges are taking 0 fees.

    is this chinese exchange all over again? what i think is that it’s not the fee that determinate the volume, chinese exxchange had fake volume and not real volume because they were running their exchange with zero feetraders don’t even care about fee too much, they are all very minimum, volume is higher in japan for another reason, hype/better adoption etc…

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