BitBuzz Daily: Chinese Dump

Tuesday 17 December 2013

We start this edition with the big news of the day, which is that China's bank have banned the Country's third party payment companies from working with bitcoin exchanges. 

From Coindesk: 'A reputable source told CoinDesk that the People’s Bank of China (PBOC) met with most of the top third-party payment companies this morning. The source said the meeting topic was unrelated to bitcoin, but digital currency became an important part of the discussion.

“PBOC, in no uncertain terms, directed third-party payment companies not to do business with bitcoin exchanges in China,” they explained.

At the moment, these claims are still rumours, as neither the PBOC nor any payment company has issued a statement to confirm what was discussed and what the outcome was. However, our source revealed they got their information from various channels, including those people who were at the meeting.'

Read More Here

Predictably this news, since confirmed by multiple sources, has been followed by something the bitcoin sell-off that our analysis of yesterday predicted might be in the offing.  To read what we were saying ahead of the move go here.  As ever, Zero Hedge have been tracking the move closely...

'UPDATE: The earlier rumors have been confirmed: People’s Bank of China told more than 10 third-party payment service providers yesterday not to give clearing services to online Bitcoin exchanges, China Business News reports, citing a central bank meeting with the companies. This news is pressuring Bitcoin to $678 (on Mt.Gox) but more notably, BTC China rates imply a $588 equivalent price - down 57% from its highs. From a $100-plus premium, BTC China now trades $130 cheap to Mt.Gox as the 'arb' flips.'

Read More Here

Unsurprisingly, this event has generated a lot of hyperbole already, as hacks various predict bitcoin's imminent demise.  Our own analysis - which will be updated later in the day - indicates nothing more than a return to bitcoin's 'rising mean' at this point.  And while the market could, of course, continue to head South the relative lack of volume associated with this most recent correction suggests that here might actually be a very good point in price to pick up some bitcoin on the cheap.

Anyhow, let's brighten the tone with news that Kyle Drake has released his excellent Coinpunk Wallet.  Here's what Wired had to say about it:

'Kyle Drake calls himself a professional cyberpunk.  He spends his days on the net, writing computer code and trying to stick it to the man.  His latest target: the global banking industry.

But he's not aiming to take down the financial sector with some sort of illegal hack attack.  He wants to beat them at their own game with a little help from the world's most popular digital currency, BItcoin - a burgeoning system that runs on thousands of servers across the globe without answering to any central authority.

"I think bitcoin is the most important thing I'm going to work on in my life," Drake says.

His current project is Coinpunk, an open sopurce Bitcoin wallet that he believes will help free the world from both big banks and powerful payment processors like Mastercard and Visa.'

Read More Here.

At BitScan, we are so impressed with Kyle's work that we are actively exploring ways to integrate it within the BitScan App.

A further development that might have made more impact, had it not been for the 'Chinese Dump' is that the New York based appartment search marketplace, RentHop, has announced that it will now accept bitcoin from landlords and real estate brokers advertising appartments for rent - at a discount of 60% compared to USD pricing(...!)

For those of us who don't live in the Big Apple the instinctive reaction might be 'so what?', but RentHop are a well established entity who wouldn't be touching bitcoin if they felt it risked compromising their overall operation.

Anyway, here's the associated press release.

Finally, we thought we'd close by providing you with a link to a cracking bitcoin sketch by the comedian Michael Connell.  It's well worth a watch.

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