Topic: I don't like the idea of governments holding millions of Bitcoins. - page 3. (Read 1507 times)

Tell me when for the last time all governments in the world cooperated in order to achieve a single goal? You are talking as if there was either only one government or as if it was possible that all governments work towards one goal. There is competition among governments. It is not going to happen that there will be one international law, one international anthem, one international language or one international of anything. Global harmonization of any issue is NOT possible. You can go through all the possible examples. Climate change counter measures same thing.

A singular universal currency would have been the last thing on earth that all countries in the world, all governments in the world would have agreed to. One government can try to shut down a lot of things in regards to Bitcoin even though as mentioned before, China couldn't do it, India couldn't do it, nobody could do it.

Governments are just finding out that Bitcoin is a decentralized truth engendering protocol coordinating who owns what based on the UTXO model. There is nothing they can do about it. The US knows if they call out a ban tomorrow, 50 other countries will say "here we go, we are Bitcoin friendly". BRICS will go for it. Whoever.

It is naive to believe that


would ever become true. Why would some Asian wallet provider listen to what the US has to say or vice versa? Bitcoin is truly fostering competition. There is no stopping it in a local or regional or national sense. That's the problem everyone in the world by now understood. And since there is also never going to be a global joint effort against a decentralized system, what do you think how this will play out?

It's software. Changed by human beings. Human beings who can be influenced by the threat of imprisonment or harm.

Bitcoin does not magically make one immune to violence or the threat therein. If the major mining companies for Bitcoin, along with every publicly-known broker, along with every publicly known wallet software, along with every known vendor on the internet, were all ordered to do something today, they would follow those orders. If the previous fork was deemed illegal and punishable by prison if anybody would use it, then nobody would use it save a few dozen now-criminals who would now be playing around with an illegal alt-coin at that point.

You really don't seem to understand the power governments have over people. If you've lived your life feeling that, then that's great for you because it means you worry about a lot less than the rest of us do .

Well you have two topics going. Should gvt hold seized btc and should gvt buy btc.

I don't want any gvt getting drunk on seizing citizens monies. It's a slippery slope.

I think it's a good idea for any gvt so own a smattering of instruments. Like gold, silver, bonds and notes. Cash of course. I am more worried about spending than saving.

I don't understand why some people think it's okay for the government to hold bitcoin. I don't see anything normal about it, because the amount of speculation and pressure will increase exponentially.

Bitcoin was never meant to belong in the hands of one entity. So obviously them holding millions of Bitcoin makes me unhappy, as well. And especially wary of any pro-POS devs. But it could be worse. I still do not believe that any government of this world can sufficiently influence Bitcoin to the point of quasi de-decentralization.

I would generally agree with you, but Bitcoin is an entirely different thing. It is an ecosystem outside the existing global ecosystem. It is not quite inside so to say. There are some very relevant differences from all the other asset classes known to us as of now. That's why I have some issues when people apply the logic they have gathered knowledge for in the past.

The geopolitical relevance of Bitcoin is unprecedented due to its immense capital mobility. For an American, it doesn't matter whether the Russians have a need for Bitcoin or the US government sees a need for Bitcoin, the American investor (just an example here, could be any nationality) simply knows that there is a need for this thing in one way or another.

But what if the US government cracks down on Bitcoin? Nobody cares in the long run. Other countries will be glad to take over a leading role. And we know how well crackdowns work, see India or China. New technology will be built, decentralized trading will be advanced, anonymization will be advanced, etc. Most of the countries in the world understood by now that they either play this decentralized currency game or they can watch from the sidelines. The mistake to not own any Bitcoin could come potentially at a much larger cost than the missing budget money used to buy Bitcoin could ever cause.

I have no proof of course, but I am very sure that the Russian government has been accumulating for a very long time. They are the ones dominating the cyberspace, seriously, if not them, who else would come up early with the idea to snap some very cheap Bitcoin over all those years.

Generations change in regards to their desires. If you ask grandpa John whether the government should get some Bitcoin, he'll say know, but the taxpayers' desire to play a role in the strategic global digital realm will only grow from here year by year. Most banks are running Bitcoin funds, the US included. Lobbyism for Bitcoin has started long ago, but was relatively quiet. Now the voices are becoming louder and clearer. The number of policymakers pro Bitcoin is gradually increasing.

It will go in waves for sure, but I think most players understand that doing nothing is most likely the wrong choice.

Last but not least, do you think that less than 20% or more than 20% of global policymakers are significantly affected by Bitcoin's performance either through holding Bitcoin themselves or through one of their closest relatives, sons, daughters, whatever? The fundamental economic principles where everyone acts in their best own interest will be at work and this won't be any different for policymakers.

Edit: I forgot something. I know this is just a kind of proposal and nothing of relevance yet, but I am sure that this won't be the last Bitcoin Reserve Bill in the US Congress (or maybe it will be).

The problem with budget money is that it is almost always insufficient, there are only a few countries in the world that do not have external debts and most countries have debts in the billions of dollars, which means that governments do not have enough taxpayers' money even to cover the basic needs of the country. And in this case, spending money from the budget to buy bitcoin, which will be used as a reserve (or investment) does not make any sense, because in order to buy bitcoin, you will have to cut some budget item, which can lead to additional problems and possibly a drop in the government's rating. So in theory this can happen, but in practice I do not expect that states will start buying bitcoin, besides, it is too volatile for them.

You both don't know how changes are introduced in Bitcoin, and it shows.

Yep. And what if Trump said that, unless they make certain changes to the Bitcoin core (e.g. to allow US surveillance to stop payments for now-illegal abortions), then they will sell off the reserve and crash the price of Bitcoin?

What happens? With defacto control over what the Bitcoin community cares about (Bitcoin's price), they... do what Trump says.

Making the US federal government buy Bitcoin is effectively putting the future of Bitcoin up for a popular vote among the American people. There's no chance you can benefit from billions of dollars of US taxpayer money without taxpayers wanting something in return.

I voted for the first option — "No, everything they seize should be sold".

Prior to 2024, I was a huge fan of governments acquiring Bitcoin after seeing the success of El Salvador Bitcoin investment/reserve turned out to be. Heck, I was even gunning for my country's government to follow a similar path. Now, I see that we all got too optimistic and excited because the last couple of days have just just how much damage government reserves could do to Bitcoin's market value as whether as they dominance they would have on the network itself if they successfully acquire enough to make critical network decisions.

What if governments that acquire Bitcoin collude to break the network or introduce absurd changes?

BTC will be the next global reserve currency for 100 years at least:



What's so hard to understand about it? History repeats itself.

I never said Bitcoin is going to last "forever", not even planet earth or the universe itself will last forever!

I won't be here in 100 years to see what will replace BTC. Chances are we might not even need money at all by then (due to AI advancements leading to a post-scarcity economy).

Good point and indeed my wording could have been more precise here. I get the angle where you are coming from. "Their own money" is indeed misleading. Money obtained through tax collection. You may call it seizure, but I am sure there are semantic nuances depending on who you ask for a good word for the process of tax collection. But it doesn't really change my take here as ultimately the government would have skin in the game, at least in democratic countries where they could be voted out, which is probably against their interest. It wouldn't be very smart to amass a Bitcoin reserve with tax money to then undermine Bitcoin's core principles and push its value towards zero. Thanks for pointing it out though, "their own money" is indeed wrong!

Your distinction with the phrase "their own money" implies that the government is an entity which produces goods and services through peaceful use of reason and energy. Whereas the truth is that the government provides services only through coercive means (i.e., taxes). Therefore, it is misleading to differentiate between the government using seized assets to create services and using "their own money" to do so, as the government obtains its money solely through seizure.

First and foremost it was a clarification for myself because I am working on my post, which is going to be pretty long and detailed and will be about skin in the game and how that impacts a government's behavior towards Bitcoin (Nash equilibrium etc.).

I see a HUGE difference in both strategies. If a government says they are going to actively build a reserve with their own national currency, then their stance on the matter is fundamentally different and also, just imagine what kind of ill-considered incentive there would be for authorities if they say they seize their way to their own substantial reserve? It would actually be bad news for the Bitcoin community as that would certainly imply a more hostile stance on Bitcoin, imposing more restrictions on how to use Bitcoin and for what purposes and so on and so forth, creating more space to justify seizures. If a government steps forward and says they are going to take their national currency in order to build a Bitcoin reserve, the chance that they are going to harm the network by passing laws that undermine the core principles of Bitcoin is far less likely.

From a game theoretical perspective, the two scenarios "seizing" vs. "buying" couldn't be more diametrically opposed, not to mention the countless complex implications both scenarios would entail for all Bitcoin stakeholders.

As for Trump saying he aims at only holding seized coins, the dude is so messed up in his brain that I doubt he'll take action concerning Bitcoin based on what he said a few months or even a few weeks ago. He has no clue. The geopolitical relevance of Bitcoin is likely to grow and if Trump can't see it, some of his staff might see it. Things could change quickly, Elon Musk just changed his mind about Bitcoin again and said it has merit after he said it's crap and he is going to support DOGE.
Trump is erratic and if Musk shows up as an advisor and tells Trump to further look into Bitcoin, then Trump presents it as an excuse and says something like "my tech guru friend Elon told me to have a closer eye on Bitcoin and since he is a genius, I will do it". (could literally be a post on X/Twitter).

Oh and last but not least: to get back to the beginning of your post and the poll, well, it is not about being scientific when it's about adding the option whether it would be desirable if a government decides to buy tons of Bitcoin. I would actually advocate it. If a government with true intentions decides to convert national currency into large amounts of Bitcoin, then yes, go for it. If a government is only building their holdings through seizures, then my answer would be no, not good. It's simply a fundamentally different consideration if you ask me.

I will explain in my announced post why I think governments holding purchased (and rightfully seized) Bitcoin can clearly be a good thing. 

Well, two things:

First, I don't really understand your problem with the poll. It's three different options: two with a government only keeping seized coins, and one with the government actively buying coins. The "holding seized coins" is more likely in countries without an extreme pro-Bitcoin strategy (say El Salvador) -- even Trump's proposal is "only" hold seized coins, not to buy actively. Maybe you mean that I should have included an option with the government actively buying, but only a limited amount, so the poll is more complete? (Yep, if this was a scientific study, I probably would have designed the poll with that option ... but for a forum post I think it's better to simplify sometimes.)

Second, I don't see such a large difference between both strategies. Not selling seized coins is basically accruing opportunity cost, because if you auctioned the coins (like the LKA Saxony did) you would have an income in fiat, but holding them means renounce to that income. Basically it's the same thing like buying coins actively for the same amount.

The only real difference in my opinion is predictability. The amount of seized coins is difficult to predict. However, for example the first El Salvador buys were also not really systematic - Bukele wrote always he "bought the dip", but the dip went deeper and deeper in 2021/22 ...

El Salvador shows also other options for a country to get the coins, like BTC income from taxes and fees, like in the case of El Salvador's residency and investment programmes.

Your post seems to imply that you've not too many problems with these countries holding Bitcoins, but what if their policy changes? Even if it's not an aggressive anti-crypto stance or a "intervention" like I posted in the OP, there are scenarios where governments could change to another asset in the future. One idea could be some kind of "AI managed resource-based currency" (=not the current AI altcoins, most are probably scams). The possibility is always there.

Or is your post meaning that governments could disappear, or at least reducing their importance? That would be a more interesting scenario (perhaps worthy another thread)

it's possible you're not following up on what's happening with regards the global Bitcoin adoption at all but even at that, El Salvador has been on the news for a very long time and have been talked about countless number of times on the forum for you to have known that government and private institutions hold far more Bitcoin than the regular person. Which single person has the ability to accumulate the amount of Bitcoin el Salvador has accumilated so far and can still continue to keep up with the pace they are still going? If the US adopt Bitcoin as her strategic reserve after the election and due to its influence other world powers keys into the trend, it's going to be that thier decision would have a great effect with what becomes of Bitcoin price cause if for any reason they decide to pull out or sell part of her holding at certain point in time, it's going to affect Bitcoin price negatively to a very large extent and continues buying of Bitcoin by these big whales will mean that the price of Bitcoin will shoot up too high and become deficult for a common man to lay hold of thereby almost removing the aspect of Bitcoin that serves as a medium of making international transaction at ease since people would mostly look at it as only an asset and not a decentralized currency.

I know very well that If government is start holding Bitcoin to boost their economy in their country that will make the price of Bitcoin to increase but I've not seen any country that accepted the Bitcoin as a legal tender based on that note I believe that the government cannot hold a Bitcoin it is only the individuals who seems bitcoin as a way of investment that can be able to hold a Bitcoin for their own betterment not to the betterment of anyone so from my own understanding Bitcoin will be valued when every government across the nations keep on holding this one as a one of economic control in their country

There's no notion of "users" in the Haypenny system, nor is there a notion of a "balance sheet". Haypenny currencies are currencies that obtain their value by virtue of one's physical possession of them, like any currency.

And the Haypenny architecture is decentralized, writing every transaction, in real-time, and then near-real-time, simultaneously to several geographical locations and storage mechanisms, including permanent and undeletable WORM storage. This makes it just as impossible to lose a transaction as it would be with a major crypto like Bitcoin, and far, far safer than lesser-cryptos e.g. besides BTC, ETH and maybe a few others.

As to whether Haypenny is "unique", well, there is no other system like this on the internet today, so that makes it unique. As to whether you think it is technically "cool" or not is your own opinion of course.

If the future of ubiquitous everyday money transfer by every person on earth is digital, then Haypenny has the only viable architecture for that speed and scale.

There is nothing particularly "unique" about using a centralized database to manage users' balance sheets.

BTC is definitely not a memecoin (like DOGE).

You certainly don't understand BTC if you think it's a memecoin.

It's the next global reserve currency. Feel free to bookmark my post for future reference.

So it's a centralized payment system?

No, thanks. We already have fiat for that. Nothing innovative.