China squashes Bitcoin

I suppose I had better note that:

Chinese authorities banned a type of fundraising using cryptocurrencies like bitcoin, dealing a blow to start-ups and other businesses that seized on the relatively new method of raising capital.

China’s central bank, cyberspace administration and banking, securities and other regulators have declared what are known as initial coin offerings illegal and ordered fundraising activities to “cease immediately.”

The ban wasn’t a surprise for the industry, coming after a financial technology industry association last month called for more stringent regulation of initial coin offerings, or ICOs. In recent days, authorities ordered inspections of ICO platforms, according to a document reviewed by The Wall Street Journal, and a handful of those platforms said they would stop providing services for the offerings.

Other governments will do the same in due course.

It looks like “fuck” was the top, at least for now:

Nobody knows when the madness will end for certain.


  1. Why is any specific ICO is different from any other ICO?

    Like, at a structural level, what is the difference between two ‘average’ ICO’s. Like Bitcoin vs Etherum, or like DogeCoin vs FUCK. Also, why/why not would it be a stupid question to ask how Ethreum is different from DogeCoin. Insights most appreciated.

    • ICO’s are released with different intended purposes ( or profit making scams), just as most block chains have different use cases. In some cases, the ICO is essentially a crowd sale with the token simply acting as a voucher for future redemption (just like contributing to a crowd sale for a product on kick starter). One example of this would be Filecoin in which the token can be redeemed for storage.
      Where they can differ is that other ICO’s intended use could be as a security i.e the token which pays dividends based on the profits from arbitrage and market making.
      I use the above two examples as they obviously have two different utilities, one clearly being a security and the other having a genuine use case, both went down different fund raising paths, Filecoin raising funds via “institutional accredited only investors”, which required full verification. Rialto send btc, eth to …… address

      For anyone following this space, it was a no brainer and this was bound to happen at some point. Statements had previously been made by the SEC, China, S Korea ect.
      Regulation is really starting to accelerate within the space (about time) with different nations taking different paths, take for instance Japan and its relationship with Ripple where a consortium of 60+ Japanese banks are working with the government and regulators. This is where the wheat will start getting separated from the chaff, my feeling is 80 % of these coins will be worth next to nothing soon whilst 20% of these “coins” that are willing to work within a proper regulatory frame work will be worth a hell of allot.

      • so if I said, ICO’s are not that different from corporate scrip, would that be correct or incorrect? I am trying to use an analogy I understand, hence example of corporate scrip, to make sure I get what you are saying. Appreciate info.

        re corporate scrip above, i mean like a mining company with its own scrip redeemable at the company store, not as a share cert of the corporate, though that is an interesting idea also.

    • “Everytime a child says ‘I don’t believe in fairies’ there is a a little fairy somewhere that falls down dead.”. from Peter Pan

      Most, if not all, of the ICO in China are outright scams.

  2. I heard a rumour that a lot of recent BitCoin mining was located inside China, and that if they reach 50% (or some other threshold) they could force structural changes from within. Is there any truth to this?

  3. HnH bought a bunch of fuckcoin I’m sure of it, probably should have bought asscoin instead, it’s an unappreciated bodypart-based-crypto-token.

    How regulators aren’t cracking down on the bootleg equity offers going on here boggles the mind.

  4. Luddites. They’re only crippling their own Devs. This means that the best and smartest Devs are going to end up in the most open regulatory environments such as Switzerland, Singapore, Thailand, London, Iceland, Panama etc etc

  5. I would be grateful if you guys would listen to the below podcast featuring Nick Szabo (strongly rumoured to be Satoshi Nakamoto) and Naval Ravikant (CEO and co-founder of AngelList). It provides a good commentary on what Bitcoin actually is:

    The value of Bitcoin is that transactions are censorless.

    • The issue is that bitcoin and bitcoin equivalents are limitless in supply, and have zero creation cost

      There is no scarcity and nothing to support valuations

      • That is not even remotely true. Bitcoin has a capped supply of 21 million coins. The creation cost (proof of work) is the cost of mining (i.e. computing power and electricity costs).

        The argument that bitcoin has no value because of potential clones is like saying facebook has no value, because one could easily create a social media platform.

        I really do recommend you listen to the podcast. If you’re getting your view of Bitcoin from Macrobusiness (who has been wrong on bitcoin since before 2013), you’re going to miss out.

      • That is not even remotely true

        Apparently there are 866 cryptocurrencies listed on “CoinMarketCap”, at least 10 of them have a market cap over $1B. So yeah, it is true. Once you mine enough Bitcoin, the transaction costs go up a lot. You now pay ~$1-2 in order to make a $4-5 bitcoin transaction – how is that a useful currency? Visa transaction fees for merchants are usually only 1-2%. This is what forces people to go “down the chain” to another cryptocurrency. This is of course ignoring that fact that Governments are not simply going to let this go on without any control.

        It’s just tulips for the information age.

    • I was conscious that my comment of “missing out” could be taken to mean “miss out on a financial gain”. Your feedback is fair.

      What I should have said is that, cryptocurrency represents a real opportunity to free society from central bank control, via a mathematically provable, decentralised network. It also can’t be censored by government, except at the conversion to fiat level or, perhaps, by a government decree that transacting in cryptocurrency is illegal. Even then, the actual network and transactions can’t be stopped, short of the whole internet going dead.

      So, if you listen to Macrobusiness on Bitcoin, feel free to be on the wrong side of history.

      • +1 I love the debate as an economist said “we’re all dead in the long run” so I appreciate your insight and both sides of the dialogue. Than k you for the pertinent clarification. I am a simple man.

      • What I should have said is that, cryptocurrency represents a real opportunity to free society from central bank control, via a mathematically provable, decentralised network.

        And instead put it under the control of the people who have all the BitCoin ?