China’s ban on Bitcoin exchange trading and any future ICO’s caused Bitcoin’s price to drop on Friday, but it bounced back over the weekend – setting record highs on Cryptocurrency Market Caps. Proving, once again, No, Bitcoin is not Chinese.
Last week The Wall Street Journal reported the Chinese government planned to close bitcoin exchanges (after banning ICOs the previous week). According to TechCrunch Government officials then met with exchanges to enforce trading suspensions.
The news created another bitcoin bounce —dropping from around $US4,300 last week, returning to $US3,746 today. Amidst all the flurry Cryptocurrency trading reached a new record for a 24-hour period over the weekend; smashing $11 billion for the first time in history.
Why is China trying to restrict Bitcoin?
To restate the obvious, Bitcoin is a distributed digital currency: not owned or controlled by a central bank, government or corporation. In fact, it’s not “owned” by anyone. The Blockchain is a transparent, global public ledger that everyone can view in real time. No hidden fractional banking, no debt based economy, no dictatorship.
Even better, Bitcoin evolves by consensus, through Bitcoin Improvement Protocols (BIPS). Updates to the way Bitcoin works are suggested by miners, put to vote across the network and require a 90% consensus for implementation.
Basically, Bitcoin is a democratic, if not, almost a… Socialist kind of currency.
- China is not a democracy; representatives are not elected by the public.
- China doesn’t allow the free movement of information; Google, Facebook, Youtube, Twitter, Instagram, Pinterest, Dropbox, Slack, The New York Times, Bloomberg, The Independent, BBC, The Wall Street Journal, Reuters and TIME, amongst many others, are all banned & inaccessible from inside China because of the existence of a massive firewall that prevents anyone inside China from accessing information deemed undesirable by the government.
- China’s economy is directed by the government; market forces don’t determine how resources are allocated.
Spot the difference?
According to Investopedia;
“The primary reason the government eyes bitcoin with such suspicion, is its role in avoiding capital controls. Anxiety about the state of China’s economy prompted massive capital flight in mid-2014, which continued through 2016. The government burned through $1 trillion in foreign exchange reserves to defend the yuan’s value over that period.”
In comparison, Russian Finance Minister, Anton Siluanov told reporters in Moscow:
“The state certainly understands that cryptocurrencies are a reality, there is no point in prohibiting them. It is possible to regulate them, so the Finance Ministry will draw up a bill by the end of the year.”
Ultimately, “Trade volumes in China today are an important, but much smaller part of the global bitcoin markets. Trade in Chinese yuan accounted for 12% of all trading on global exchanges, compared to 36% for the US dollar and 40% in Japanese yen over the last 30 days, according to data platform Crypto Compare.”
What do we suggest?
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