Thursday, 09 February 2017 14:10

Chinese Bitcoin Exchanges Suspend Client Withdrawals. I Warned You About Heteronomous Wallets! Featured

Bitcoin.com reports "Chinese Exchanges Suspend Withdrawals for One Month": The two largest Chinese Bitcoin exchanges have suspended Bitcoin and Litecoin withdrawals for one month. The news follows China’s central bank inspections at nine smaller Bitcoin exchanges this week.

China Will Play A Leading Role In Bitcoins Future 640x480

 In an effort to stem the flow againt China's capital controls, the PBOC is inspecting various onshore bitcoin exchanges - 11 all told, including the largest - OkCoin and Huobi (the smaller exchanges include Chbtc, Haobtc, Btctrade, Yunbi, BTC100, Dahonghuo, Jubi, Bitbay, and Yuanbao). While this caused some fluctuation in BTCUSD prices, it regained its ~$1,070 price farily quickly. This morning, EST, it quickly dropped $100 (~10%) as news came out that "exchanges Okcoin and Huobi announced they would suspend BTC and LTC withdrawals for one month"

The apparent reason is that the PBOC (Chinese Cenral Bank) is strictly enforcing KYC/AML rules. Rules that the Chinese exchanges do not seem to have the infrastructure to implment or enforce. Thus, a major systems upgrade is in order. As quoted from Bitcoin.com:

Both companies have stated their exchanges will be “upgrading” in order to comply with “anti-money laundering efforts, foreign exchange management and other financial laws and regulations.” The pausing of withdrawals and the upgrades are expected to last one month but “may also be substantially ahead of the development process,” says Huobi’s announcement. This “in order to avoid possible illegal transactions that may continue before the system upgrade is complete,” Huobi’s announcement concludes.

In the BoomBustBlog post "Those Who Say Bitcoin Has No Intrinsic Value Need to Imbibe the Gospel of True Education" I warned about, and reviewed the folly of, keeping your "b"itcoin on heteronomous (someone else's) wallets versus your own (autonomous) wallet, using "B"itcoin. Confused? You see, if you were using Veritaseum, or any other autonomous system, you would never be subject to someones else exercising said control over your assets. It's a matter of heteronomy vs. autonomy. As excerpted and to wit:

What is the significance of differentiating between "b"itcoin and "B"itcoin?

You see, the network that "b"itcoin travels on, "B"itcoin, adds significant and material value. It allows bitcoin to be used on a fully automomous basis.

autonomous vs heteronomous

In addition to full autonomy, you can program bitcoins - so much so that you can cause a simple bitcoin transaction to behave as an equity/public stock sale or an interest rate swap or any swap-style transaction using any of over 30k active tickers found on Bloomberg, tracking the underlying basis point by basis point - all without counterparty or credit risk.

Here's a screenshot of our smart contract-enabled bitcoin wallet that is sitting on the same tablet that I'm using to type this article...

VE screen

In case your wondering... Yes, Bitcoin can replace the prime brokerage function of an investment bank - without the balance sheet exposure. Here's a video of a simple Apple equity exposure trade.

Wow! I didn't know it could do all that? So, why isn't everybody using it?

Well, the FIRE (finance, insurance and real estate) industries are really trying to use it, but they are confused and compromised. They are confused because the word bitcoin has become anathema among the financial elite. Why? Well, because they believe what they read in the pop media and the pop media has attached bitcoin to drug dealing, child porn and all other sorts of underworld murky things (the same things that the USD and the EUR are used for more than any other currency). So, instead of doing their own independent investigation, they jumped to inaccurate conclusions.

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Last modified on Friday, 10 February 2017 09:17

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