That said, this move -- if enacted into law -- will be an incredibly foolish act on the Indian government's part and will act as a catalyst in driving away the next generation of bright young Indian innovators and engineers from the country.
> will act as a catalyst in driving away the next generation of bright young Indian innovators and engineers from the country.
Somehow I doubt there's much of an intersection between "the next generation of bright young Indian innovators and engineers" and crypto miners who care enough or run an operation large enough to justify leaving the country over this.
I have asked this previously, asking again, believing bitcoin will become digital gold is believing -
* US will let go of the petrodollar / reserve currency status.
* China will allow a democratic process to control their currency / economy.
* Other developing countries like India will give up the ability to control inflation etc of their own economy.
Do you sincerely believe these are possible ?
Also, if most of mining & hardware required for it is controlled by China and we are buying this digital gold via real currency, isn't a significant global wealth transfer happening to China ?
I don't know if India's decision is right or wrong, we do have a history of taking incredibly stupid "shooting oneself in the foot" decisions, but questions above do bother me.
In 1933, Roosevelt banned holding gold and silver. In 1934, the Gold Reserve Act allowed the government to set a fixed price for gold and buy out all domestic gold holdings for cash. This remained in effect until 1961 when the laws were relaxed. Then in 1971, the US jumped off the gold standard. Prior to that point, gold was the global reserve currency.
BTC is far less widely owned and far less legitimate than gold was in the 1930s (it actually was the global reserve currency then). The political friction is low for heavy regulation or an outright ban across even developed markets.
My bet is that the green argument will be the first attempt to neuter BTC.
Disclaimer: BTC neutral. I own a small amount, and treat it like an option on a speculative asset.
These restrictions will be more common among developing countries. This is legitimate financial regulation and has nothing to do with bombastic statements by some media accusing the Indian govt of overreach
Most developing countries are at a high risk of capital flight by the rich and hence they regulate foreign exchange with Capital controls.
India already has a cap of USD 250k limit on capital flight by individuals.
Nowadays bitcoin is a common method to escape capital controls.
This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally
The fact that it functions as an effective funnel for capital inflows is probably why the West keeps it legal.
If it was instead used to suck wealth out of the US it would be criminalized yesterday.
There was a mirrored double standard with tariffs. The US wanted them eliminated until China started reaching and surpassing technological parity at which point it couldn't put them up fast enough.
This law if intended for capital preservation is solely aimed at the middle class, the rich already have means of moving their money out. Panama papers and Swiss Bank fiascos proved that well.
India's iron handed squeeze of the middle class via insane policies is already causing a massive brain drain, the government seems either too stupid or willfully ignorant in recognizing the insidiousness of this issue.
Bitcoin allows you to effectively arbitrage electricity price differences between the West and the developing world.
Which previously would require some kind of capital intense activity like Aluminium Smelting - which at least would promote development of local infrastructure, industrial capacity, and skills.
Bitcoin mining does none of that - local efforts to make electricity more affordable for local usage and business (ie. subsidies) are basically monetised.
In addition many countries like India have problems with illegal electricity usage. The shortage of GPUs and general computer chips (how much of TSMC output goes towards mining machines?) is also negatively impacting supply chains, particularly for countries at the very end of them.
Crypto mining is hugely disruptive and harmful to developing countries, and these bans are completely justified.
I understand that the US and other Western fiat currencies are being run into the ground to fund pension obligations - but you can just buy Apple or other blue-chip stocks if you want a long-term asset.
> These restrictions will be more common among developing countries
If BTC ever becomes a threat, developed countries will not hesitate to make moves.
In 1934, the Gold Reserve Act prevented Americans from holding gold which was the global reserve currency at the time and universally considered hard money.
I have a feeling BTC will be a little easier to regulate.
I think its more likely to prevent capital flight by the middle classes than the rich. The rich always can and always will circumvent legislation anyway and dont need bitcoin
I really don't think these types of restrictions will succeed in western countries when you have people like Elon Musk and Jack Dorsey heavily involved.
If crypto only had the underground attention it had 5 years ago, maybe.
>>Most developing countries are at a high risk of capital flight by the rich and hence they regulate foreign exchange with Capital controls. India already has a cap of USD 250k limit on capital flight by individuals.
Anybody who owns a legitimate business in India has no reason to do this.
The only people in India who could do this are bribe makers, and the ecosystem around that. And those people already have means to not just park that money some where(many times outside India), but also whiten it at will.
The bribe makers already park money in gold, lands(in the names of relatives). In cities lots of Ola/Uber cars are owned by bribe makers and then they get some one from native places and get them to drive it for a share in profit. You will be surprised how that money is invested. Building a hospital/hotel? Put a word out, people invest in as little as a hotel/hospital room in return for some rent. There are even stories of people buying Green Cards for their siblings, relatives etc.
This is illegal collection. The legalised corruption goes really really deep. There's reason most government housing colony plots are generally owned by people who are in civil services or in some way connected to them.
Coming to capital flight. There was recently a number of ponzi schemes in Bangalore, in the name of Islamic Sharia investments. A number of firms came down, and investor money in literally thousands of crores was laundered. A famous one was called the 'IMA Scam'. The owner has luxury palaces in UAE, and apparently has gold in underground warehouse vaults outside India. He was arrested but is out on bail for medical reasons :)
When people say there is some $250K limit on these things I burst out of laughter. $250k, which around 2 crores is likely a single day bribe collection of a sub registrar office in anywhere in Bangalore.
>>This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally
'The Rich' don't even get their money to India. The big businesses, including the big IT services firms, only get as much money to India as much as they need to run operations here. This is why every time the dollar gets stronger IT services firms get richer. So do the investors. Most of the business is run on rented campuses, and apart from the core businesses you contract most of your work to local companies. So it's not like the big businesses hoard a lot of money in INR.
Nobody is actually that stupid to legally bring their billions into a country from which they can only take $250K back.
Lastly the only reason I see, and I don't think its malice. But I think it's 'new tech phobia'. The established order of society doesn't like disruptive stuff. That's pretty much it. In 1980s there was once a Bharat Bandh called in India when Rajiv Gandhi introduced computers.
these kind of government overreach is one of the reasons why capital(regardless of its size) has an insensitive to leave those countries, it's just that expenses to leave are more or less fixed, so its easier for rich people to afford it
"Even China, which has banned mining and trading, does not penalise possession."
I wasn't aware that China had banned mining. Whenever mining crypto is brought up, often people say that most miners are in China using hydroelectric power.
The trading ban is honestly good for India, crypto so far doesn't generate any profits, only losses. Any individual profit must come at the expense of someone else's losses + mining on top ensures it's a giant loss-making ponzi. Early adopters are overwhelmingly Westerners, Indians buying in now would create a net transfer wealth from India, and India can't afford it. Stated differently, crypto has a negative expected value - it destroys wealth.
Once that changes and (some) crypto starts to generate genuine profits reversing the ban would make sense, but until then, let Westerners with more money than they know what to do with play ponzi games with each other. In the West even losing everything is an inconvenience in the grand scheme of things - there's ample food, jobs and welfare. Being poor in India can mean you actually starve to death [1]
Regulating the Indian economy is like squeezing a water balloon - whichever direction you squeeze from, you only make some other part fatter. If this ban went into effect, average people might comply and divest from crypto, but wealthy opportunists will always find a way to subvert government regulation through bribery and political connections.
Look at demonetization - people with large amounts of illicit funds would bribe bank managers to create thousands of new accounts in their name, to overcome the reporting/exchange limits. The aam aadmi (Hindi for common man) ended up with the short end of the stick, as the cash supply dwindled and people had to spend hours waiting at the ATM.
I am not sure that the mention to China is accurate, see [0].
Perhaps they're confusing the whole China with one of its regions, Inner Mongolia? [1]
Edit: by the way, it seems to me that this is the key part in the article:
> The measure is in line with a January government agenda that called for banning private virtual currencies such as bitcoin while building a framework for an official digital currency.
I'd read this as India trying to pave the way for a huge adoption of its local digital currency, and therefore banning other crypto might be seen (by govt officials) as the way to go.
On one hand I can understand and relate why a government would implement such a ban. On the other I am really curious in which legal frame you can justify “doing math calculations on your computer is illegal” without destroying personal freedom and liberty. Bitcoin is a real curveball
Everything you do digitally can be reduced down to "doing calculations" and some of those things are already illegal (and with good reason). There might be some good arguments in Bitcoin's defence but this isn't one of them.
Not saying that’s good, but that’s already done since a while with encryption key (https://en.wikipedia.org/wiki/Illegal_number) and encryption systems (the US restricts export of cryptography). A legal system doesn’t care that much about all the technical details when they can deal with the abstraction directly.
This will be an interesting case study in what happens when a government goes head on against cryptocurrencies. This will lead to some interesting innovation in the space. There are too many cryptocurrency users and believers in India at this point.
We will see some interesting P2P exchange platforms where anonymity becomes paramount.
To "propose", as said by a "senior government official". So basically this is a great way to crash the market a bit, buy the dip, and then nothing will ever come of it. Just like the first few times they did this. Clever. The media will, of course, report it, the market will, of course, crash, and these government officials will make some nice money.
Imagine the day we have to explain to the next generation that they live in a climate hellscape because the world decided to burn fossil fuels to collect digital beanie babies, instead of saving the world.
That's two people very angry at crypto energy consumption I see in the same week.
I find the emotion quite surprising.. I don't see the same amount toward other forms of pollution. Consumerism is also a bit absurd these days and global trade is a large producer of CO2 too.
Now I find the crypto world a bit absurd and surely if they could kill the energy requirements then good.. but climate change is certainly not a consequence of btc miners.
How much energy does watching porn consume? Playing video games? Watching a movie? Browsing Facebook? Using a ski chair? Visiting an amusement park? Going in vacation? Cooking your favorite type of food? Making ice cream? Driving to your friends? Listening to music? Concerts? Having a party? Banking? Casinos?
As a species we use energy to meet our goals. Those goals may be situated anywhere in our hierarchy of needs. Some are essential, some could be considered trivial. But they are all important for their consumers.
Bitcoin is now considered by some important for our future finance system. While not everybody agrees, this may be more important than countless other ways we use energy, for much more trivial reasons.
Being judgmental about how others use energy they pay for reeks of hypocrisy, virtue signaling and holier-than-thou attitude.
The worst thing is that it’s not even “the world deciding”, so far the Bitcoin community has been quite small. Just a small group of hyper enthusiasts seem to be enough to create disastrous effects.
You can have a very small (in relative numbers) community deciding for the rest of the world that dedicating all our energy to making them rich is the future and so far we don’t seem to be able to say “no”.
Proof of Work has been a horrible poisoned gift to the world.
Better yet, imagine explaining to them how a couple politicians used to control money supply based on their whims and how the gov kept bailing out endless speculation losses on wall st.
Absolutely. But I just want to remind the group that not all crypto relies on mining! And not all crypto is about chasing fads like NFTs. I believe the world (some parts more than others) will need a decentralized means of exchange in the future. I personally am betting on Nano, but others are also promising.
"Instead, the bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied, said the official, who asked not to be named as the contents of the bill are not public. " - Its better to wait for an official statement than these speculative journalism
Just wish they would get on with a complete ban or whatever instead of sending rumours in news every couple of months. What competent government takes this long to do something that they already have declared multiple times through news channels?
It's almost like they are just setting up honeypots in the interim for later on surprise raids.
[+] [-] abhiminator|5 years ago|reply
Here's the link to the post made earlier: https://news.ycombinator.com/item?id=26460907
That said, this move -- if enacted into law -- will be an incredibly foolish act on the Indian government's part and will act as a catalyst in driving away the next generation of bright young Indian innovators and engineers from the country.
[+] [-] lakecresva|5 years ago|reply
Somehow I doubt there's much of an intersection between "the next generation of bright young Indian innovators and engineers" and crypto miners who care enough or run an operation large enough to justify leaving the country over this.
[+] [-] JdeBP|5 years ago|reply
The URLs merely differ in "us" versus "uk".
[+] [-] teatree|5 years ago|reply
Do you sincerely believe these are possible ?
Also, if most of mining & hardware required for it is controlled by China and we are buying this digital gold via real currency, isn't a significant global wealth transfer happening to China ?
I don't know if India's decision is right or wrong, we do have a history of taking incredibly stupid "shooting oneself in the foot" decisions, but questions above do bother me.
[+] [-] fny|5 years ago|reply
BTC is far less widely owned and far less legitimate than gold was in the 1930s (it actually was the global reserve currency then). The political friction is low for heavy regulation or an outright ban across even developed markets.
My bet is that the green argument will be the first attempt to neuter BTC.
Disclaimer: BTC neutral. I own a small amount, and treat it like an option on a speculative asset.
[+] [-] whatever1|5 years ago|reply
121 TWh/y for bitcoin (just bitcoin, not crypto), 205TWh/y for the Internet data centers.
Just pause for a second and think about the magnitude of the waste.
[1] https://energyinnovation.org/2020/03/17/how-much-energy-do-d...
[2] https://www.bbc.com/news/technology-56012952
[+] [-] draklor40|5 years ago|reply
Source : https://www.msn.com/en-in/news/other/india-today-conclave-no...
[+] [-] spikengineer|5 years ago|reply
Most developing countries are at a high risk of capital flight by the rich and hence they regulate foreign exchange with Capital controls. India already has a cap of USD 250k limit on capital flight by individuals.
Nowadays bitcoin is a common method to escape capital controls.
This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally
[+] [-] pydry|5 years ago|reply
If it was instead used to suck wealth out of the US it would be criminalized yesterday.
There was a mirrored double standard with tariffs. The US wanted them eliminated until China started reaching and surpassing technological parity at which point it couldn't put them up fast enough.
[+] [-] teatree|5 years ago|reply
India's iron handed squeeze of the middle class via insane policies is already causing a massive brain drain, the government seems either too stupid or willfully ignorant in recognizing the insidiousness of this issue.
[+] [-] ArkanExplorer|5 years ago|reply
Which previously would require some kind of capital intense activity like Aluminium Smelting - which at least would promote development of local infrastructure, industrial capacity, and skills.
Bitcoin mining does none of that - local efforts to make electricity more affordable for local usage and business (ie. subsidies) are basically monetised.
In addition many countries like India have problems with illegal electricity usage. The shortage of GPUs and general computer chips (how much of TSMC output goes towards mining machines?) is also negatively impacting supply chains, particularly for countries at the very end of them.
Crypto mining is hugely disruptive and harmful to developing countries, and these bans are completely justified.
I understand that the US and other Western fiat currencies are being run into the ground to fund pension obligations - but you can just buy Apple or other blue-chip stocks if you want a long-term asset.
[+] [-] fny|5 years ago|reply
If BTC ever becomes a threat, developed countries will not hesitate to make moves.
In 1934, the Gold Reserve Act prevented Americans from holding gold which was the global reserve currency at the time and universally considered hard money.
I have a feeling BTC will be a little easier to regulate.
[+] [-] fiftyacorn|5 years ago|reply
[+] [-] spikengineer|5 years ago|reply
[+] [-] Ariez|5 years ago|reply
If crypto only had the underground attention it had 5 years ago, maybe.
[+] [-] literallycancer|5 years ago|reply
[+] [-] kamaal|5 years ago|reply
Anybody who owns a legitimate business in India has no reason to do this.
The only people in India who could do this are bribe makers, and the ecosystem around that. And those people already have means to not just park that money some where(many times outside India), but also whiten it at will.
The bribe makers already park money in gold, lands(in the names of relatives). In cities lots of Ola/Uber cars are owned by bribe makers and then they get some one from native places and get them to drive it for a share in profit. You will be surprised how that money is invested. Building a hospital/hotel? Put a word out, people invest in as little as a hotel/hospital room in return for some rent. There are even stories of people buying Green Cards for their siblings, relatives etc.
This is illegal collection. The legalised corruption goes really really deep. There's reason most government housing colony plots are generally owned by people who are in civil services or in some way connected to them.
Coming to capital flight. There was recently a number of ponzi schemes in Bangalore, in the name of Islamic Sharia investments. A number of firms came down, and investor money in literally thousands of crores was laundered. A famous one was called the 'IMA Scam'. The owner has luxury palaces in UAE, and apparently has gold in underground warehouse vaults outside India. He was arrested but is out on bail for medical reasons :)
When people say there is some $250K limit on these things I burst out of laughter. $250k, which around 2 crores is likely a single day bribe collection of a sub registrar office in anywhere in Bangalore.
>>This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally
'The Rich' don't even get their money to India. The big businesses, including the big IT services firms, only get as much money to India as much as they need to run operations here. This is why every time the dollar gets stronger IT services firms get richer. So do the investors. Most of the business is run on rented campuses, and apart from the core businesses you contract most of your work to local companies. So it's not like the big businesses hoard a lot of money in INR.
Nobody is actually that stupid to legally bring their billions into a country from which they can only take $250K back.
Lastly the only reason I see, and I don't think its malice. But I think it's 'new tech phobia'. The established order of society doesn't like disruptive stuff. That's pretty much it. In 1980s there was once a Bharat Bandh called in India when Rajiv Gandhi introduced computers.
[+] [-] WanderPanda|5 years ago|reply
[deleted]
[+] [-] seniorivn|5 years ago|reply
[+] [-] Jonnax|5 years ago|reply
I wasn't aware that China had banned mining. Whenever mining crypto is brought up, often people say that most miners are in China using hydroelectric power.
[+] [-] nootropicat|5 years ago|reply
Once that changes and (some) crypto starts to generate genuine profits reversing the ban would make sense, but until then, let Westerners with more money than they know what to do with play ponzi games with each other. In the West even losing everything is an inconvenience in the grand scheme of things - there's ample food, jobs and welfare. Being poor in India can mean you actually starve to death [1]
There's no reason to ban mining however.
[1] https://www.telegraph.co.uk/global-health/science-and-diseas...
[+] [-] primitivesuave|5 years ago|reply
Look at demonetization - people with large amounts of illicit funds would bribe bank managers to create thousands of new accounts in their name, to overcome the reporting/exchange limits. The aam aadmi (Hindi for common man) ended up with the short end of the stick, as the cash supply dwindled and people had to spend hours waiting at the ATM.
[+] [-] simonebrunozzi|5 years ago|reply
Perhaps they're confusing the whole China with one of its regions, Inner Mongolia? [1]
Edit: by the way, it seems to me that this is the key part in the article:
> The measure is in line with a January government agenda that called for banning private virtual currencies such as bitcoin while building a framework for an official digital currency.
I'd read this as India trying to pave the way for a huge adoption of its local digital currency, and therefore banning other crypto might be seen (by govt officials) as the way to go.
[0]: https://www.loc.gov/law/help/cryptocurrency/china.php
[1]: https://finance.yahoo.com/news/chinas-inner-mongolia-end-cry...
[+] [-] ACAVJW4H|5 years ago|reply
[+] [-] exclipy|5 years ago|reply
[+] [-] beforeolives|5 years ago|reply
[+] [-] dgellow|5 years ago|reply
[+] [-] vaylian|5 years ago|reply
(And no, I don't like this)
[+] [-] lxgr|5 years ago|reply
Isn't that true for all computing?
[+] [-] jagger27|5 years ago|reply
[+] [-] bitreality|5 years ago|reply
We will see some interesting P2P exchange platforms where anonymity becomes paramount.
[+] [-] newsclues|5 years ago|reply
Electronic p2p and a network of gold dealers that exchange electric for physical gold.
[+] [-] shepardrtc|5 years ago|reply
[+] [-] quelsolaar|5 years ago|reply
I say ban mining, the sooner the better.
[+] [-] agumonkey|5 years ago|reply
I find the emotion quite surprising.. I don't see the same amount toward other forms of pollution. Consumerism is also a bit absurd these days and global trade is a large producer of CO2 too.
Now I find the crypto world a bit absurd and surely if they could kill the energy requirements then good.. but climate change is certainly not a consequence of btc miners.
[+] [-] Erlich_Bachman|5 years ago|reply
Bitcoin is now considered by some important for our future finance system. While not everybody agrees, this may be more important than countless other ways we use energy, for much more trivial reasons.
Being judgmental about how others use energy they pay for reeks of hypocrisy, virtue signaling and holier-than-thou attitude.
[+] [-] dgellow|5 years ago|reply
You can have a very small (in relative numbers) community deciding for the rest of the world that dedicating all our energy to making them rich is the future and so far we don’t seem to be able to say “no”.
Proof of Work has been a horrible poisoned gift to the world.
[+] [-] qertoip|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] vimy|5 years ago|reply
[+] [-] WrtCdEvrydy|5 years ago|reply
[+] [-] rawtxapp|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] tifadg1|5 years ago|reply
[+] [-] gnrlst|5 years ago|reply
Absolutely. But I just want to remind the group that not all crypto relies on mining! And not all crypto is about chasing fads like NFTs. I believe the world (some parts more than others) will need a decentralized means of exchange in the future. I personally am betting on Nano, but others are also promising.
[+] [-] flixic|5 years ago|reply
[+] [-] anandrm|5 years ago|reply
[+] [-] TtEdN7jwT|5 years ago|reply
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] option_greek|5 years ago|reply
It's almost like they are just setting up honeypots in the interim for later on surprise raids.