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Bitcoin China

Bitcoin Exchange Value Halves After Chinese Ban 475

Posted by Unknown Lamer
from the newton's-law-of-should-have-gotten-out-last-week dept.
An anonymous reader writes with news of the latest major fluctuation in the price people are willing to pay for Bitcoins. From the article: "China's ban on its financial institutions handling bitcoin causes world's largest exchange to cease trading, halving the value of the currency from $1,000 to less than $500 in a matter of days. The country's central bank took a hard line on Bitcoin in early December when it banned financial institutions from handling the decentralized crypto-currency, and as a result BTC China, the world's largest bitcoin exchange, has stopped accepting deposits from its users." Just watch that line trend downward.
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Bitcoin Exchange Value Halves After Chinese Ban

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  • by Captain_Chaos (103843) on Wednesday December 18, 2013 @12:02PM (#45726489)

    "No one governing" the Euro is what almost caused the collapse of the EU over one small state having credit difficulties.

    Wow. It's been a long time since I've seen such a high concentration of ill informed bullshit in one sentence...

    1. The Euro is not "not governed". It is governed by a very strong and independent central bank, namely the European Central Bank
    2. The EU did not "almost collapse". A few countries have received some large loans, all of which still look like they will be paid back in full. At no point was the "EU" in danger, nor even the Eurozone (despite wild speculation in the media), which is what you probably meant
    3. The Euro was not "dramatically volatile" at any point. It's been trading for about $1.20 to $1.40 consistently for the last ten years
  • by IamTheRealMike (537420) <mike@plan99.net> on Wednesday December 18, 2013 @12:12PM (#45726589) Homepage

    "No one governing" the Euro is what almost caused the collapse of the EU over one small state having credit difficulties.

    Er, no. What people were worried about was that heavily indebted countries would voluntarily choose to exit the Euro so they could inflate away their debts by printing money as fast as possible, and bulk exits of countries from the Euro would cause problems. The "solution", if you want to call it that, was that after resisting for a long time the ECB (actually Mario Draghi) gave into immense political and personal pressure to start open-ended Euro printing in order to essentially reallocate money from savers in Germany and other northern states to heavily indebted, often highly corrupt governments in the south. In order to preserve the fiction that Europe is one big happy family all sharing the same wonderful currency, the ECB agreed to a global tax on all Euro savings everywhere and made lots of people who managed their finances appropriately very very unhappy!

    This is not actually solving any problems - it just sends a powerful message from governments that only suckers try to save money because governments will inevitably confiscate it from you in order to pay for (e.g.) absurdly generous pensions in Greece or elsewhere.

    Bitcoin does not allow governments to do this. If Europe had been running on Bitcoin at the time, then those governments would have had to go through an actual default and inflict the pain on the people who lent them the money - but on the other hand, if Europe was run on Bitcoin, it's very unlikely the southern countries could have got into so much debt in the first place. Who was lending such vast sums to countries that had such basic, fundamental fiscal problems? Banks, of course, banks who knew they would be bailed out (with yet more money printing) if something went truly tits up. They gambled that politicians cared more about keeping the Euro than protecting savers, and they were right. If Europe used Bitcoin for everything, the "moral hazard" of banking would not exist as they would know that nobody could bail them out, and they'd have far fewer deposits to play with anyway (or maybe none). As a result, far less money would have been invested into places like Greece and the economic distortions such huge borrowing allowed would have never happened.

  • Re:And this (Score:2, Informative)

    by Anonymous Coward on Wednesday December 18, 2013 @12:19PM (#45726711)

    While that has happened, it's extremely rare, to the point of not even being a statistic.

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