You can however buy computers and power using INR quite easily. The government won't know what you are doing with your computers and power.

What do you mean? To whom are you showing a paper trail? Do you have to account for cash withdrawals from a bank?

Do you have to show a paper trail if you take out some money from the bank, and use it to buy a motorcycle, or twenty barrels of grain, or ten iPhones?

Bitcoin is irrelevant, compared to still-tolerated and massively-more voluminous alternatives, for capital controls. This is a red herring.

Bitcoin was fine until ICO promoters started pilfering from the masses. In any case, China is currently loosening its capital controls [1].

This isn’t a problem that can be constrained to China. China is just reacting first. The rebranding of this action away from fraud and towards capital controls is dishonest.

[1] http://www.reuters.com/article/us-china-economy-capital-cont...

Disclaimer: I am not a lawyer. This is not legal nor financial advice. Do not launder money.

At one point all crypto had reached $160B in market cap. Not small at all and risked getting much larger.

Lesson #1: if China wants something done they will do it. No courts, no public discussion, nothing.

Don't be surprised if these execs end up in jail.

I'll remind you of how refreshing it is when I drag your family off the gulag without warrant. Its not "refreshing", its scary.

same is as true for N. Korea

Once you really consider that idea a bit more you may realize it's actually the exact opposite - it's refreshing when a powerful country can't move quickly, can't get anything done fast, and has tons of gridlock due to differing opinions combined with strongly institutionalized laws and procedures. Human beings are terribly whimsical creatures, and institutions that prevent us from acting on our whims and instead force us to go through a thoroughly deliberative process are one of mankind's greatest inventions.

Despite the horrors history will offer up, we as a species continue to fail to comprehend the danger of a government unrestrained by its populace. We somehow think that we will create a government that can "move fast" but not abuse its capability to do so while we are proven wrong time and time again. Thus, limited governments ever suspect by their populace are necessary to ensure opinions as illustrated above do not come to bear...

You can also invoice hundreds of millions in fake orders. This is how the bulk of exfiltration occurs.

Addressing the rounding error before the bulk means other concerns are at work. I am ignoring, in this argument, that recent policy—preceding these orders—calls for more capital export, to keep down the yuan.

I honestly don't know what setup it takes to be reasonably certain to be the winning miner these days - does anyone have stats on how many miners and how often one might be expected to "win"?

Not that it really matters! It's not like I have a few mil hanging around looking for something to do...

It seems like either you're accusing `Animats of arguing in bad faith or you worded that rather poorly. Or my reading comprehension is on the blink.

I think it is a little bit of 1. China understanding the risks posed by bitcoin capital flight and 2. bitcoin turning from a small community to $100bn+ market thing.

Needless to say this is about all crypto and not just bitcoin.

Cash on hand + Money people owe the bank >= Cash bank owes its customers.

If an exchange is operating in such a manner, this means that:

Cash + BTC on hand < Cash + BTC exchange owes its customers.

We don't call that a fractional reserve. We call it insolvency (And knowingly accepting new deposits in such an exchange is called 'Fraud.')

The executives of the exchanges were told not to try to leave China. Somebody foresaw this problem.

[1] http://fortune.com/2017/09/15/china-shutting-down-beijing-bi...

I predict that future startups will probably have a small ICO that is covered under Reg CF, and then a bigger token sale under Reg A.

A technical white paper that doesn't bs with buzzwords, or a business plan filled with marketing fluff?

Think about it. You could spend hours working on a business plan that nobody will ever read. With the ICO route, you can reach an audience like never before.

If you are serious about your endeavour, you should ideally do both.

If you proofed the technical side of your idea, it's good, but if you didn't try to see if their was a possibility to make it profitable, then you are not starting a business.

Who would invest in a business if the people responsible for it are not serious about it ?

> With the ICO route, you can reach an audience like never before.

An audience who can understand your whitepaper and what an ICO is is definitly not an audience "like never before".

You mean like this? http://infolab.stanford.edu/~backrub/google.html

I hope this shows you that I am very serious about the "idea".

But is there even a mechanism here?

---------------------------------

My issue with ICO's is that there is neither a mechanism (in fact it's explicitly barred by law) or even an expectation for a company that executes and becomes profitable, to "repay" the people who bought into the ICO, by repurchasing at a multiple.

In other words, if you raise $1 million on coins, the expectation is that if you use it to become a profitable company, you will not rebuy any of those coins.

In financial terms here is what is going on when you raise money for a white paper using an ICO.

You're in two markets: you're in the market of selling collectible, limited-edition playing cards with cool branding. Theoretically you don't really care about the market for them, because selling playing cards isn't the business you're "really" in. The cards don't represent shares in your company. They just happened to be called Virtual Shares Collectible Playing Cards. And you sell them because you're trying to raise money. The "cooler" your white paper, the cooler the cards. The "real" business is just branding for the collectible cards. But what happens later to the cards has no relation to your white paper / real business. They're separate entities.

Separately, you use whatever funds raised, to fund whatever you wrote about in your white paper. There is no promised or expected flow back from the second to the first thing.

It is literally illegal to do an ICO and say that if you become a profitable business, you will repurchase the coins at a 4x multiple to their ICO price. That is illegal.

So while selling collectible playing cards by branding them with a really cool white paper might be a great way to raise money -- and who knows, the market for them might stay strong for a long time -- it really has nothing to do with the financials of the business you use those funds for.

someone correct me if I'm wrong. where is the flow back from a successful business to the coins? They don't represent ownership. The business isn't rebuying them.

What does the success of the business have to do with the coins they're branding? Nothing, right?

My open source project is now receiving funding/sponsorship from a cryptocurrency company.

I had applied to Y Combinator and various incubators in my country many times over the years but was consistently rejected because VCs didn't understand what I was doing - The founders of many of these cryptocurrencies (especially the more popular ones) actually understand technology very profoundly and so I am having much more luck there. I think that some cryptocurrencies are literally 'smart money'.

Whenever big corporations drain resources from the masses and keeps them enslaved by essentially brainwashing them; somehow that's OK. But when something comes along which offers the masses a chance for a quick (obviously high-risk) escape from slavery, that's a scam?

I don't agree with how bureaucrats spin this; as though people need to be protected from themselves. Maybe the government should ban entrepreneurship too - that's very high risk and very random/unpredictable too.

What's a good resource on this?

[0] https://en.wikipedia.org/wiki/Impossible_trinity

you can find friendly shop abroad willing to charge your card fake sale for commission and bank fees, until recently this was petty much unlimited by those 50K USD yearly limit per person, but I think they put there already some limit

there is also 100K RMB per bank card yearly withdrawal limit, so there is that

personally I just maxxed limits of my wife through years to get money outside China even without involving extended family, my own account in China stands on 130RMB now :))

There is a separate provision[1] that requires the reporting of foreign accounts but I think it's specific to bank and financial accounts. I don't think direct ownership of real estate in a foreign country is required to be reported (as opposed to ownership through a REIT).

[1]: https://www.irs.gov/businesses/small-businesses-self-employe...