This one statement from the article makes the whole thing worth reading. It's HILARIOUS.
'India’s central bank objected to Bitcoin’s volatility and its lack of “backing assets.” '
Although, 'Paul Krugman thinks they’re evil.' is pretty good too!
In case anyone here doesn't know, the rupee has no "backing assets." Neither does the dollar. Or the yen. Or any of the other fiat currencies used throughout the world. Fiat money is money that has value "by decree." It's not backed. I don't know if there is a currency in the world that's got more than miniscule backing to it.
But "backing assets" are the chief problem India has with the bitcoin? LOL! I'll tell you India's problem with the bitcoin: India doesn't CONTROL the bitcoin. India's government can't print and spend infinite bitcoins the way it can with rupees. Bitcoins may not be debaseable and, if they can be, that ability sure doesn't lie with India.
And THAT is the problem governments have with bitcoins. Whatever their pros or cons might be, their use does not empower politicians in the least. They do, however, greatly empower the nameless individuals who invented the bitcoin and who, doubtless, pocketed several million for themselves back when mining them was essentially FREE. (Each new bitcoin becomes increasingly more difficult to create, with a mathematical limit established at about 20 million coins, ever.)
At this point, and assuming he hasn't yet cashed in his holdings, I bet that bitcoin's inventor is a billionaire. If the coin really catches on, he will become the wealthiest man on the planet. And tax free!
Jan. 1, 2014, 7:02 a.m. EST
What a Bitcoin is really worth in India and China
Commentary: Depending on where you are, the virtual currency is not what it seems
The Bitcoin saga took an unpleasant turn this December when China’s central bank banned financial institutions from dealing in the virtual currency. Bitcoin was enjoying a surge of popularity in the country; by the end of November, Chinese exchanges were responsible for almost two-thirds of worldwide traffic. The central bank’s decision sent the currency tumbling.
Last week, Indian regulators joined the fray. Preferring ominous warnings to outright prohibition, the Reserve Bank of India issued a public advisory on the dangers of Bitcoin. The meaning was clear enough. India’s largest exchange was promptly shut down, and its operator raided by local authorities.
Why the crackdown? The People’s Bank of China explained that Bitcoin isn’t a currency “in the real meaning of the word,” and cited the risk of money laundering. India’s central bank objected to Bitcoin’s volatility and its lack of “backing assets.”
The larger problem, though, may be Bitcoin’s mobility. Virtual currencies are borderless. They can be acquired in one country and exchanged immediately in another. Since they’re not “real” money, they can get around foreign-exchange laws. And since they’re not backed by assets, there’s no easy way for governments to control them.
Consider that Chinese citizens are forbidden from taking more than $50,000 out of their country in any given year. This policy yields strange results, such as the fact that, in 2012, 17 million Chinese made the pilgrimage to Macau. It wasn’t gambling that attracted them but rather gambling chips, which can be converted to foreign currency and then sent abroad. Capital flight has remained a problem for China in 2013, with the country’s new premier leading a campaign against corruption and the Fed’s taper creating weakness throughout the developing world. For wealthy Chinese, Bitcoin was a way of avoiding the expense — and the raised eyebrows — of a trip to Macau.
In India, Bitcoin was an alternative to smuggling gold. The rupee’s terrible performance this year has led many Indians to run for the exits. India’s government responded by locking the doors. In August, gold imports were slapped with heavy restrictions and capital controls were tightened, preventing money from being sent or invested abroad.
Perhaps this explains Bitcoin’s appeal, and why it’s seen as a threat, in China and India. Neither government has much recourse, but while China can prevent Bitcoin from being used commercially — Alibaba and Baidu /quotes/zigman/97715/delayed/quotes/nls/bidu BIDU +0.29% were forced to stop accepting it as payment — and India can shut down the exchanges, neither country can do anything about the “mining” of Bitcoins. This activity requires only computer hardware and a web connection. Once mined, Bitcoins are utterly beyond the reach of regulators.
The virtual currency might be many things. It might be in a bubble, as Alan Greenspan told Bloomberg in early December. (It might also be the next evolution of Paypal, as Bank of America argued the very next day.) Holding Bitcoins can be dangerous, with the price swinging by as much as 40% in a month. Paul Krugman thinks they’re evil. But in some parts of the world, Bitcoin can be a way out; and if we’re going to make sense of the crazy ride that it’s been on this year, that’s a good thing to remember.
http://www.marketwatch.com/story/what-a-bitcoin-is-really-worth-in-india-and-china-2014-01-01
My posts are for CONSERVATIVE PATRIOTS ONLY. If you are a liberal, socialist, communist, democrat, media parrot or sympathizer with the above, then your opinions are neither welcome nor worthy.
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