Chinese {economic|financial} {growth|development} is {a worry|a concern|a fear} for {many|numerous|lots of|several}, {having|having actually} {fallen|dropped} {below|listed below} 7 {per cent|percent} in the {first|very first|initial} quarter of 2016, which {means|implies|indicates|suggests} that Chinese {slowdown|downturn|stagnation} is {the worst|the most awful} in the {past|previous} {six|6} years

1. Steven L. Rhyner
Once Libertarian Dream, Bitcoin Is Now Chinese Currency
teamsteverhyner.com/once-libertarian-dream-bitcoin-is-now-chinese-currency/
Chinese economic growth is a worry for many, having fallen below 7 per cent in the first quarter of 2016, which
means that Chinese slowdown is the worst in the past six years. While the country’s all dominant central
government is scrambling to shore up the economy by providing stimulus in whatever way it can, there is something
going on in the cryptocurrency world that brings to fore Chinese domination of that field. Bitcoin for all intents and
purposes now may be a Chinese currency.
From libertarian dream to a Chinese currency
When it was conceived, Bitcoin was thought to be a libertarian dream.
As a unit of value it was not controlled by a central authority, it had to be mined like gold and it was pretty much
thought to be inflation proof.
However fast forward to today and we live in a world where according to Bloomberg, China is ‘home’ to 90 per cent
of bitcoin trades and 70 per cent of Bitcoin mining.
As the article reported, “Chinese miners have leveraged their access to cheap labor, inexpensive electricity and
local chipmaking factories to outmaneuver their global peers in performing the complex calculations needed to verify
Bitcoin transactions – a service for which they’re compensated in newly-minted bitcoin. When the cryptocurrency’s
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2. price tumbled from about $1,000 in late 2013 to below $200 in early 2015, lower costs in China allowed them to stay
afloat even as many Western operators folded.”
Where Power Flows Through The Barrel of a Gun
Perhaps it as an apt time to quote the late Chairman Mao. After all if China is now the king of Bitcoin, they will have
their say. Then there is the spectre of government intervention, which is never too far away in China.
Their media, political activity and of course the internet are all in one way or another under the control of
government. Should the Chinese government decide that Bitcoin is a rival or a threat, you might see a massive
clampdown in a matter of days.
As New York Times recently reported in an article titled How China Took Center Stage in Bitcoin’s Civil War, “China’s
clout is raising worries about Bitcoin’s independence and decentralization, which was supposed to give the
technology freedom from the sort of government crackdowns and interventions that are commonplace in the
Chinese financial world.”
The future of Bitcoin will be shaped by the Chinese
Enough has been written and said about the ‘network congestion’ that clogs the pipeways of Bitcoin world. There is
currently many competing ideologies on how this congestion issue should be solved.
While the western approach, particularly the American one, has been one that calls for expansion of the network, the
Chinese have mostly stuck to the idea that things should stay as they are for the moment.
The role of the Chinese companies in negotiations over the future of the Bitcoin is immensely important as Wang
Chun, co-owner and Chief Administrator of F2Pool told Bloomberg, “The miners control the real voting power”.
It is important to realise though that while Bitcoin transactions at the moment are capped at 7 per second, if
something is not done about the prevailing congestion, the time taken to process these transactions can reach
hours or even days, rendering Bitcoin basically inoperational. Therefore some Chinese miners have also realised
that something needs to be done.
The New York Times quoted Jihan Wu, the founder of Bitmain as saying that the network needs to expand and
soon. He is known to have said in an email that if core programmers did not increase the number of transactions
going through the network by July, he would begin looking for alternatives to expand the network.
East vs. West
The Chinese remain sensitive about
western impositions and they are
not likely to give in to standard
‘talking down’ approach of many western companies and governments.
At the same time, the concentration of Bitcoin mining in China is a hairy proposition considering what happened in
the neighbouring Russia with respect to the Bitcoin ban. With the Chinese economy going through a rough patch, it
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3. may reach a situation where an overeager government wanting to impose ever stricter capital controls may come
after Bitcoin.
It is in the interest of Bitcoin and everyone involved that the Chinese and the rest of the world find a new balance
where concerns of each other can be taken care of.
In the event this does not take place, rest assured it would be the Chinese that would be calling the shots this time
around.
Re-posted from www.cointelegraph.com by Shivdeep Dhaliwal July 14, 2016
In my opinion, Bitcoin still is a Libertarian’s dream. But other’s are finding out it can be their dream too.
How about you? Want to become in a home based Bitcoin business which uses part of the mining
proceeds to purchase hard assets such as gold and silver? The day of reckoning from all of the central
banks printing money is coming sooner or later. Better to be prepared for any currency collapses before
that happens. Click here for more information.
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