Topic: government version of bitcoin with inflation (Read 1175 times)

I am not sure if we use the same terms.

Money supply is simply money creation. There is no higher control over money supply than priniting the fiat money.

Everything else that would gvmnt make towards BTC system, that they have to clone and abuse (If I understand what you are saying), would also cause, that government would lose partly or fully control over money supply. And still the currency would not be so good as BTC. So the economical law that better currency is superior would apply here. It does not mean that such currency can not exist or that fiat money can not exist when BTC is around the world. That means that even when they CAN manipulate money supply, such manipulation has immediate effect on exchange rate to BTC and inflation. Therefore such manipulation would be useless or much less effective than today. Therefore government would not manipulate as much as today and would lose a huge part of its power.

I am not saying anything on surface. I am saying exactly and clearly. If BTC does not fail, it will destroy the system. If some people here think, that it is something better than Paypal bc they do not want to pay some fees, it is their stupidity. Money will always have transaction fees and competition can say how high. Indeed transaction fees now are probably too high, but it is only bc of effect of regulation (that causes monopoly on bank/ewallet market) that will vanish with BTC. But fees are only a minor issue and people should concern on core problem. The core problem and the nice and scary thing on this is: there will be no money supply in gvmnt hands.

It does not matter how many people will understand BTC. As it does not matter how many understand fiat money or computers. What matters is how many people will accept BTC. Indeed again - it would be nice if all know at least roughly what is going on, but we can not hope in it. People still want to consume, not to think about money.

So the outcome of spreading of BTC (if it happens and odds are really high still) will be destruction of economical system that we know. States will be weaker, there will be much more freedom and world will be even harder to live for most people. But for me it is not negative. Human race is too lazy.

"I would never use the government's version of bitcoins. I wouldn't trust it at all esp. with privacy and spying."

the government's version will be open source due to the original bitcoin being open source, so you could inspect the code and compile it yourself.

if the government issues the money to the people, then the government can see the financial activity of the people.  it's a trade off that people who choose to be governed must live with (in many countries, you are free to leave to find something you like better).

the goals of bitcoin are necessarily inconsistent with fiat currency based countries. i would be interested to see a country whose economy was based on bitcoin and how they would interact, but i don't think that the project should just try to take over the world all in one go. it really is an attack on these types of countries.

I would never use the government's version of bitcoins. I wouldn't trust it at all esp. with privacy and spying.

This would kill international Bitcoin trade. The Vietnamese would never use it, for instance, if it finances Uncle Sam's peace operations.

"If gvmnt wants currency as you describe it..they already have it! It is fiat money. Why would they do another currency only with some difficulty with money printing? Why would allow gvmnt miners to make profit from it when in system of fiat money gvmnt simply MINES 100% without effort? Makes no sense for me."

The government uses some of the tax money to print more money, having a digital form of cash reduces the amount of printing that needs to be done and so is cheaper for them. also digital money cannot be counterfeited, so it increases control over the money supply which is what they want.

"Even most BTC supporters here do not realize what would it mean if BTC spreads around the globe. Anarchy would not be strengthening of middle class."

you admit that bitcoin is a wolf in sheeps clothing.  on the surface you say "by using bitcoin, you're just skipping over paypal" but the wolf is that "by using it you are undoing fiat currency and you may be helping to bring down your country's system of government".  people should not be tricked into doing such a thing.

I agree with one of your points, that the government cannot educate the population about what bitcoin will do without explaining what fiat currency is, luckily for them they don't have to, they just have to make it against the law to get a head start.  many people are not smart enough to make an informed decision about the different systems today, but bitcoin is changing that and people will be forced to pick a side.

what do you think the outcome of btc spreading around the globe will be?

People around the world do not trust government, but they trust the lies that gvmnt releases. But it is NOT gvmnt fault. People want to believe in some nice fake reality. That is why I think systems like BTC will in the end surprise most of people how "unhuman and unsocial" it will be.

Even most BTC supporters here do not realize what would it mean if BTC spreads around the globe. Anarchy would not be strengthening of middle class.

You would be surprised how many people DON'T trust the Government, at least in the US, right now.....

This makes no sense for me.

It is just variation of fiat money. All money from USD to BTC is based on peoples belief that the money is money. The problem with fiat money is now because people stop thinking that the money is money, because they see gvmnts ability to CONTROL THE SUPPLY.

Controlling the supply is needed by government to impose extra inflation tax and manipulate business cycles. But this also kills the currency, which causes that BTC is attractive.

If gvmnt wants currency as you describe it..they already have it! It is fiat money. Why would they do another currency only with some difficulty with money printing? Why would allow gvmnt miners to make profit from it when in system of fiat money gvmnt simply MINES 100% without effort? Makes no sense for me.

the government makes it p2p for the same reason bitcoin is p2p.  if the government had a small number of miners they would be DoS'ed by every enemy of the nation.

they allow the citizens to mine for only the transaction fees which would be set to a constant (1-5 cents making it unprofitable to build a huge gpu rig).  this is just like the endgame of bitcoin, where the inflationary period ends and the network runs solely on transaction fees.

one thing that would become transparent from all this, however, is that the way the government is using money would be exposed to some extent (until cash is outlawed and not accepted anywhere anymore), so the government would become super-accountable for its spending.

But why would a government make this as a p2p? Their only advantage over bitcoins would be that they could do all the mining on a few servers, and thus would be immune to a 51% attack.

the solution allows the government to control the money supply

"a hard-coded government address that has no balance but is allowed to send any amount of money to a recipient (the digital equivalent of minting)."

If government starts chasing BTC it would be really nice. Free advertisement. After they notice BTC they will probably ignore it (as Gandhi said ignorance is stage 1 in battle). But there is hope that some stupid 2nd class politicians will try to make a case. It might help to BTC in the begining a lot.

Gov will never issue currency like that. They need to control money supply (to control money supply is something else than to control money flows). If they do such currency as you describe, it would be weak currency as fiat money is. Such currency loses in long term in competition.

the secret key need not be internet connected... you could send the keys electronically to a government office where they are copied to a flash disk that is robotically moved over to an offline machine which signs keys and then moved back and sent back to the post office.

you could have a whole room of them under armed guard.

Won't matter.  If we were trusting in the people to understand money or crytography, and how it's in their interests to drop govco and use Bitcoin; we'd be screwed.  The last guy to finally use bitcoin will be because everyone else does, not because he makes a rational, educated determination of which is the better monetary system.

No, encourage them.

If there is a secret key owned by the government, and a copy of it exists on one computer system in every post office in America, I'd give it two weeks before that key is on Wikileaks.  If, instead, the government chooses to not put it on the computer itself, but to use a VPN that is also connected to one computer in every post office in America; I'd give them 2 months before the key is on Wikileaks and Anon or LulSec is posting child porn on the VPN's main portal site.

Postal clerk is an entry level job.  Security that is dependent upon a large number of postal clerks is security theater.  If that security theater is actually there to protect something that needs real security, somewhere in America there is going to be a hacker group that draws straws to choose the smuck that has to actually get up each morning and go to a job at the post office.

you would be surprised how many people trust the government.  all they have to do is outlaw bitcoins and push their own version and bitcoin will suffer.

they will probably say "who is satoshi?  he could be anyone, do you trust him with your money?  he won't even show his face!"  (though i'm sure there are many many people looking for him)

i think bitcoin will encounter trouble here.

Please don't give them any ideas.......

The government should probably fork Bitcoin. They can modify the blockchain algorithm to remove the block reward but allow transaction fees, and add a tax.

You go to a government office and show ID and they sign 10000 of your privately generated addresses (associating them to a permanent record or not depending on your right to privacy). The algorithm requires the clients to only send money to addresses have been digitally signed by the government's key.

Finally set up a state-run exchange where paper is converted to national bitcoins pegged at 1:1. This will require a hard-coded government address that has no balance but is allowed to send any amount of money to a recipient (the digital equivalent of minting).

Other possibilities:

Signed blacklist block which causes all nodes to distrust a given set of nodes (freezing them out of the system). Easily abused, like the no fly list.

Attacks:

Same as bitcoin?

Conclusion:

Like bitcoin, the network is still peer-to-peer, there is still incentive to process transactions, it is not safe to use for contraband, the government can collect a new transaction tax.