Topic: If the Governments Planned to Keep the Limited 21 Millions BTC in Their Custody (Read 479 times)

I was scrolling through my posts history and I saw this and I like to make comment on it. And not for any other reason. Yes I agree with you, government can't buy all the 21 millions bitcoin because the amount they will use is big. But can they influence the market? Because since they can't fight bitcoin directly now, they have channel their grievances the to the centralized exchanges. And recently we saw that in my country. The government almost banned all the international centralized exchanges that were operating in the country and some of the exchange staff were arrested by my country government and the intervention of 16 lawmakers from USA douse the situation in the country and now kucoin made an announcement that they are coming back again but with serious tax collection from the users.

It is bitcoin that is decentralized but what about the participants of bitcoin?

How may government accumulate total supply if sellers don't sell? Government can't force anyone to sell and people aren't stupid to leave Bitcoin when the government starts to accumulate. Have you thought about what will be the price to accumulate the total supply of Bitcoin? What they will do by investing such a big amount where there will no users in case they accumulate all the Bitcoin. Instead of that, they might launch a new coin. So this won't happen ever where Bitcoin is a decentralized currency.

Ok I think you're new to Bitcoin and economics, lets go through some things.

First off, there are not currently 21m Bitcoin, there are about 19.1m or so. In about 120 years there will be 21m Bitcoin and there will never be any more.

Ok so if govts decided they wanted to 'destroy' Bitcoin by buying it all up so nobody can use it. Well the price of anything is a function of supply and demand. Bitcoin's supply is limited to 21m, and if governments decided to buy every Bitcoin in existence, that means demand would skyrocket exponentially. Because the government would have to convince every single owner of Bitcoin to sell ALL of their Bitcoin. And the only way to convince them would be to offer higher and higher prices for that Bitcoin.

Let's pretend that all 21m Bitcoin were in circulation now (instead of taking more than a century from now for that to happen) so that no new Bitcoin will be mined after the government tries to get them all. Well there's also probably 2 million or so Bitcoin that are lost so really the government would have to only buy maybe 19m even if all 21m were already in circulation. So the current price is $20,000. What would happen is that governments would have to bid the price up into the millions of dollars. This would cost governments likely tens of trillions of dollars. And at all times they would have to outbid all the other buyers in the market at all times. So when other people buy Bitcoin the government would then have to offer them even more money for those people to then sell their Bitcoin for a profit. The governments of the world don't have tens of trillions of dollars, and certainly not tens of trillions of dollars to spend on something that has nothing at all to do with the operation of their nations.

Secondly there would likely be people who would refuse to sell, seeing as how the government just keeps raising the price of Bitcoin in their attempt to buy it all. And there would be no way for the government to know whether some of the older bitcoin that hasn't moved in many years is lost or is just owned by people who won't sell it. But let's just say the government does manage to buy all the Bitcoin in circulation, and they've had to massively inflate their own national currencies in order to print enough money to do this, of course raising the price of Bitcoin even further at the same time they are doing this because their national currencies are being devalued. Given the devaluing of their currencies, maybe they end up spending hundred of trillions of dollars to complete this, they've crashed the value of all national currencies so that massive economic pain hits all countries in the world and the only people that still have enough dollars to be well off are those who were already very wealthy or those who had a decent amount of Bitcoin that they sold to the government. Everyone else in the world is in financial ruin. Economies collapse everywhere. These very governments that did this are then overthrown all around the world because they completely collapsed their economies and they can't even afford to fund their militaries and police forces and other security forces. The world is thrown into a lawless, anarchy with an economic collapse that makes the great depression look like a nice time.....and all so the governments could buy up all the Bitcoin that are now completely worthless because they are the only owner and their whole plan was to be the only Bitcoin owners so there is no one to transact with and they don't want to sell it to anyone. Great job governments, you just destroyed all of society simply to try to stop Bitcoin.

That's what it would take and roughly what would happen.

The far easier way for governments to try to stop Bitcoin would be to make it illegal or make the regulations around it so cumbersome that it is hard for people to get their hands on and hard for companies in the space to operate. But of course all governments aren't going to do this at once. So you'd end up having some governments implement this monetary tyranny on their people while other nations would see this as a once in a lifetime opportunity for their nation and they'd open up their country and laws for Bitcoiners from other countries to come live and work in these places. So you'd get tens of millions of people (some of them very rich) moving from monetarily oppressive nations to the nations that saw this opportunity, thus hurting the nations that tried to stop Bitcoin while greatly growing the economies of the nations that welcomed Bitcoin in response to the monetary oppression elsewhere.

It is never profitable in the long run for governments to try to restrict freedom in oppressive ways. Bitcoin represents the greatest monetary freedom in the world. For every government that tries to put a stop to it that will just lead people to other countries where it flourishes, hurting the places that restricted Bitcoin and helping those that opened up to it.

No government will show interest to accumulate the entire volume of available bitcoin. Even if a government takes effort it isn't possible to achieve the same. People around will surely have the trust over bitcoin and will continue holding it amidst the plan of acquiring by the government. No need to worry about entire bitcoin volume under the control of a government.

At some point if such situation happens, then this is going to be a big blow for the entire users who depend on cryptocurrencies for their lives.

Bitcoin is a decentralised currency which derive it's value from its valuation. The more it is spread amongst people the more the Bitcoin blockchain will thrive. Coz it's value is ascribed by its user base at first place. Its our fund which we all all decided to store in Bitcoin ledger in form of decentralised currency. If government forcefully buy it than once the invested money has been cashed out. Noone will get back to governments for coins, they might build something like new Bitcoin. May be more advanced.

This is practically impossible because Bitcoin is not just an investment asset that a state government could just buy all and keep without its constant turn-around as a means of payment for transactions within different parties all around the world because that's how Bitcoin works, it's the price is always influence due to the law of demand and supply. The higher the demand for Bitcoin, the more its price increases due to its limited supply, and the lower its demand the more its value decreases, which is what can happen if all 19million available Bitcoins is left to be dormant just a single day

You got the point right. I was carefully reading through all the comments to see if anywhere will make this point I'm happy you did,  I don't really think such an attack on bitcoin will everly happen. If the government decides to buy the 21 million bitcoins, first there are some die-hard hodlers holding bitcoin, even satoshi is hodling an appreciable percentage of bitcoin. If the  government is buying the price will be skyrocketing and it will be eventually not realistic for government to buy all available bitcoins because it will run in billions of dollars. So it is not worth the efforts. I can even say that 51% attack is possible than buying off all the available bitcoins, though it was a sharp thought by Op.

I have once though about this issue of Bitcoin having this limited amount of supply when the market is becoming bigger and bigger the day. The government can still hijack Bitcoin if they like but I think they don't have to do that which might finally affect the supply and also the numbers of people holding it. There is no way the supply can be increased and if what you have said finally happens one day then it will make Bitcoin become more scarce and the value to increase more.

I think really I understand why you choose to drop those links because it only refers to other people opinion about the same topic you have written about. Whether Bitcoin had a total circulation of 21 million or not the government still have the plan to control the Bitcoin since they can't fight against it, the only option they have now is to join it.

Not sure if you're disagreeing with me, if so, you misunderstood. I absolutely was saying in my response that if you were to look up your own country's budget (never mind the debt), then you can easily see how quite a number of countries would on their own be able to afford the staggering sum required.

It's not all about cash in hand either. States take up debt running over decades of repayment.

Let me show you an interesting quote to answer your question, I hope you can understand it well.


I don't think the government would take such a big risk to buy all the bitcoin just to centralize and control it. After all if the government wants to do it then I'm sure the prices will go up very fast which will eventually make them fail. So don't expect this to happen to bitcoin unless the government really wants to burn huge amounts of money.

It is impossible not because of limited cash but because some bitcoins are already lost and out of circulation it's either the owner of those coins are dead already or they miss typed their address and send the bitcoins to an unknown address resulting for the coins to get lost forever. I am not only sure tho if burning process occurs here in bitcoin like in other coins but that's another way for some of the supply to lessen.

Btc is volatile and its value can drop very low, if that happens then it will now be easier for them to buy more bitcoins but I still don't think they will do that because they are known to be anti bitcoin and they even built their own version of bitcoin.

Which "governments" do you mean? It's going to be fun if 200 different governments are all outbidding each other to buy Bitcoin. They can buy a few percent, and if the price they pay is ten times higher they'll probably even get a few dozen percent. But then what? Many people just HODL, and the price increase won't bother them. On the contrary!

I think this is an imaginary think, and that will never could be possible. Because Bitcoin is held by many people all over the world. Now I don't think that everyone around the world will sell their bitcoins to any government at once. And even if it does happen, I don't think Bitcoin will continue to reign as it is now. And there's no need to think about it because it's never possible, it's just imaginary thinking and we are commenting like our own minds.

I beg to disagree- the funds of the government are absolutely high than you think. The debt of my country is around trillions of dollars at this point, in which it is possible for a country to store and receive all the circulating BTCs in the market. But the question is, why would the government do this? There is no economic benefit especially in the long-run if they do this. In fact, they just bring more harm than good to their economy if they decide to do this move.

In addition, it somehow defeats the purpose of decentralization if the government were to acquire majority or all of the BTCs in the market (which is nearly impossible to happen).

Why would governments that are against BTC buy that much BTC? It would be much much cheaper to just pass some laws and that should do it. I f they wouldn't srll them afterwards to make money, than just buying them so that anyone else dosen't have it would be thr most useless and expensive move ever! And that's just BTC, what about other crypto?

I don't think this is a very likely scenario. First of all, which country should do this USA, China or the European Union? Or maybe all of them together? It's not really realistic that all the big countries in the world would unite against bitcoins. And even if that happen, how would they ever gain access to all the 21m bitcoins? Right now the BTC price is at 24,500 USD, it would already cost a fortune for a country to start buying bitcoins. But as soon as the word spreads that there is a big buyer in the market the price would rise sharply. Eventually the country would have to pay so much for all the bitcoins that it cannot afford it anymore. Also the other option of taking away the bitcoins from people is also not feasible. How could a big country force all the people around the world to turn in their bitcoins for free? There is no way this would happen, I am not worried about such a scenario.

it won't and will never happen. first, it is extremely stupid to do that, second, if the government did that(IF they can), they will just waste billions of dollars for nothing. also, the "poor bitcoiners" will end up with a lot of money since the government would have to buy their bitcoin.

Countries have economic homework that needs to be done rather than trying to collapse an entity that is not as big a threat as bitcoin. What is clear is that it drains the state treasury and has not yet received protests from the public if the poverty rate in the country is relatively high.

Collecting all the bitcoin supplies in one place is an impossibility. Even though it will happen, there are many surprises that governments will not be able to predict from decentralized communities around the world.

1. What if a group of dumb leaders will decide to buy all the bitcoins to kill it?
2. What if this group of dumb leaders will sacrifice their countries' funds and economies in order to gather $500 billion for the huge buyout?
3. What if this group of dumb leaders realized that their heavy bitcoin buyouts are pumping its price and $500 billion is not enough?
4. What if this group of dumb leaders sees that there are no 21 million bitcoin in circulation?

Are we just going to create a thread or posts without knowing even a little? I am not techy but pretty sure coingecko or coinmarketcap or whatever similar sites are basic when someone starts getting interested in bitcoin.

Wouldn't that lead to a vast increase in price in the long run? Especially if it was discovered by people, that a group was buying out the entire circulating supply, not to mention that not all Bitcoin owners are actually actively selling them. With that, the government can't buy everything out in one buy out, so they have to bide their time which could exponentially increase the price. And they won't even get anything back, they would have just wasted that entire funding to buy out which may not even be the complete supply of Bitcoin to kill it out.

Just keep calm it won't happen I'm sure about that since they can't just buy those Bitcoin in USD as if they owned the money just to buy a very volatile crypto currency. It's like giving what the people want by investing the crypto and again who would be the person in-charge of controlling the key of the wallet? Is it the President itself? The technical team? I highly doubt someone would risk to spend all of their capital budget just to stop us from using Bitcoin and besides they can't own all of it because it takes hundred years before whole Bitcoin will be mined plus considering the missing or shall we say the Bitcoin wallet that's just got lost already.

I don't think there's even a plan for that, it already escalated worldwide and I don't think all government in the world would ever keep it on them. If they can take it, it will surely by force, the thing is they should have to buy it instead of using it in force, I wonder if they wouldn't see a protest if this happen.

That’s not gonna happen mate. Take note that some BTCs have been lost forever like that guy who threw his hard drive in a garbage dump cointaining the Bitcoins that he have bought several years ago. They might seize or confiscating BTCs and choose to keep them, but not all because of the lost BTCs by other users who doesn’t remember their keys to the kingdom anymore.

Well, Bitcoin won't be fully mined for the next 100+ years so thats not a problem we have to care about all that much. And even if the government decides to tackle Bitcoin buy buying it all up, thats fine. The "free" Bitcoin which is not in the governments hands will be worth a lot more. So if the government wants to help us, thats a great plan.

And what are the governments going to do about the altcoins? We seem to have quite a lot of those. Has the government thought of a plan for them yet?

I think nobody has the power to control or restrict Bitcoin in any way except at the end-node. Like a business which accepts payment in Bitcoin, for example. You can ban that business from accepting Bitcoin. Because that business is centralised and they know who owns it.

At such situation there won't be any difference between the digital form of fiat and bitcoin. Just the difference, bitcoin have got limited supply of 21 million whereas the digital fiat will be printed according to the need. Even if some country have plans of acquiring the entire 21 million, it won't happen for various reasons. The major one being the wallet with lost private keys which goes unrecoverable.

It's impossible in reality. Also if a particular government buys all 21 million supply from the market, then the price of the bitcoin will turn back to zero because there will be no seller in the market. So the market will be straight away crashed to zero. One basic parameter of bitcoin is its decentralization, once it's gone, the foundation of bitcoin will be destroyed. So no government would try to do such a highly costly adventure which will eventually turn back to zero.

Bitcoin's price is based on demand. So if there's no seller in the market, buyers will eventually move out of the market and will look for an alternative. So probably a new coin will rise to fame if bitcoin is purchased by government and kept under safe custody. Overall, it is an imaginary situation which will never ever happen. At least not in our lifetime!

But in reality it is not possible, they cannot buy all the bitcoins because if they need to buy all the bitcoin then they need infinite amount of cash so infinite is unachievable so acquiring 21 million bitcoin is also not possible even by all the governments combined together.

It's not possible for the government to buy all the 21 Million Bitcoin.
1) The governments already have enough on their plate and the world economy is in mess. I believe the best thing a sensible government will focus on is how to fix their backyard issue not the accumulation of all 21 Million BTC.
2) We have the early and long-term holders of BTC who are not planning to sell any portion of their bag until the total 21 Million coins are mine.

It is good you understand this, which show that it is impossible for the governments to have all the 21 Million BTC and the number of at least 1BTC holder was said to have increased lately.

The correct statement is "there cannot be more than 21 million bitcoins in cicrulation". Otherwise right now there is 19,118,390 bitcoin in circulation according to block explorers and some of it is lost.

It can but it won't because it requires a major change in the protocol which nobody would agree to.

When one entity starts buying something and removing that from the market it creates supply shortage. That will lead to increased price. In simple terms if a government started buying up bitcoins they would run out of fiat and paper to print more fiat way before they reach 21 million coins. 1 satoshi could be worth $1 million!

You should ask who would even sell their bitcoins to the government in first place. I have some bitcoins, do you think I'm gonna sell it all to the government?!

More accurately, please!

There are only ~ 21 millions of bitcoin in total supply. Not all of them will be used by people on Earth. Many of them received from mining from block rewards and lost forever (by losing private keys in early years of Bitcoin network).

It can be done by a consensus in protocol but it won't happen. I strongly believe that it won't happen because the current total supply creates value for Bitcoin. The Bitcoin community don't have reasons to vote and increase total supply of Bitcoin.

• How is the 21 Million Bitcoin Cap Defined and Enforced?

There are many Bitcoin forks but they are not real Bitcoin. There is a unique Bitcoin, the original one with ~ 21 millions in total.

• How Many Bitcoin Forks Are There? You will be surprised!!!

To buy, they must buy it from sellers. Do you think governments can be sure that they actually buy all bitcoin from non-governmental holders?

This is impossible if this will happen sure the price will skyrocket and it will become different. Another question is if the demand will start to become extremely high, do you think some Bitcoin holders will sell? I don't think so. It's possible for me I can't imagine how it will go.
It's also a tough decision for the governments or other entities to put too many funds to try to buy all supplies, for me, it is not how it works.

Man can you at least read the first page of replies and see how quickly you'll find sweeping statements like this to be wrong.

Even if all coins were already in circulation and in a single wallet, the total value isn't the figure you think it is.

Might want to look up your country's budget and see what they're spending on, say, if I'm guessing right where you're from, religion.

The government doesn't have enough funds to hold all 21 million pieces of Bitcoin, no country can afford to do that and not all government parliaments approve such a proposal, if there is one.

Every country has an incoming and outgoing budget every month and year, you have to consider that, every government has its own rules in determining the budget.

I don't think there would be swings, I think it would be a continued climb. If the government(s) were not telling people they were doing it, just buying and holding it then as the price REALLY started to go up due to the lower amount of coins being circulated people would REALLY have FOMO and the price would just keep going up.

Right till the very hard crash at the end.

But I can't see any government bothering to do it, or being able to keep it a secret as they spent that much money doing it.

-Dave

If any entity tried to corner the Bitcoin market, it would just increase the price of coins and prevent them from buying the rest of supply. Even if we imagine that someone managed to buy all coins, Bitcoiners could just agree to print more BTC or start a new blockchain with the same code. This is one of the most expensive and unrealistic attacks on Bitcoin that can be imagined. It's better to just spin millions of fake nodes and disrupt the communication between nodes, launch an information campaign against Bitcoin, cut it off from traditional finance and so on. But why would a government do it? Bitcoin is not a threat to fiat.

A couple questions to your theory OP.

I hold a part of that 21 million. How would the goverment buy my coins? There's many bitcoiners around the world who wouldn't sell if they saw aggressive buying from a party, in this case a government.
It's the same kind of situation as if you owned a piece of land worth $100k and all of a sudden somebody came and offered $300k to buy it. You'd think they know something. Maybe there's oil or some other natural resource? Maybe there's a plan for a shopping center to be built and they want to flip the land for even more than they're offering you?  

What about people who have millions and don't need fiat now? If someone came and gave them 50k USD for a bitcoin they wouldn't sell and if the same party came a month later offering 100k they also wouldn't sell. Holding money that's safe from inflation and surveillance maybe more important to them, since they already have 10 million in real estate and another 10 in stocks.

There's no single entity like a government or a company that would be able to buy bitcoin at this point. All they'd do is buy what's available on exchanges and drive up price to insane levels like a million USD because if you'd reduce coins on exchanges by 80 or 90% you'd introduce insane volatility. You'd have bitcoin swing to 100k and back to 50k daily.

Exactly $453,666,662,279 as we speak, that's $453 billion, and if compare with for example US's military annual budget of 800 billion or the $5 trillion spent on the code stimulus in quits being such a huge amount. Of course, this is excluding the increased value as those coins get bought up but a government could easily get slow this down of this by claiming to ban bitcoin completely or starting seizing some large exchanges and their wallets at the same time but still.

But, coming back to OP's main question, why would a government do this? What is the economic reason to grab all the coins?
Grab them and burn them, they will act just like Satoshi coins, and even if 100 coins will not be owned by the government their value will be sky high and we will be dealing with microsatoshi if not nanosatoshi.


I fail to understand how this is a bad thing.

There are 19,118,068 bitcoins in circulation. 21 million is the total supply when all bitcoin have been successfully mined, the time this would take is estimated to be till 2140.

There would be no poor bitcoiners. They would have all sold to the state government.
The possibility of this happening is low. State governments is not a Global entity, and buying out all bitcoins for the name of bitcoin to die off seems pointless.

They would also need majority to be willing to sell, including Satoshi.

- Jay -

I doubt this, after the said numbers have been mined, miners will now deoend on transaction fees to earn their incentives, mining all the blocks stipulated doesn't mean that's the end of it all, rather the show continues, and it does not affect the volatile nature of bitcoin nor will it got pegged or cease from circulation, but then the price will be more unpredictable and the value will rise higher the more.


This cannot happen, do you know the worth amount of the said 21m in USD? that's very huge and they cannot afford to vested on a volatile coin one sidedly when other areas of the economy needed attention with finding as well, they wouldn't want to risk that, besides governments are anti bitcoin except for the ones that adopted it.

as it is said, there are 21 millions bicoin in circulation in the whole world to use. And I dont know if another ones can be produced to add to the already existing ones. But as for the moment there 21m. So if the state governments planned against bitcoin and buy all the 21 millions to among themselves, what do you think will happened to the poor bitcoiners? or the government apparatus joined with the business tycoons to stored all the Bitcoins in their custody so that the name of bitcoin will die off since no ordinary man has enough to disturb the market. Although few people might have it but it will not even up to 2 or 3 BTC. Therefore, at that stage what will you do?
https://bitcointalksearch.org/topic/satoshi-set-the-total-supply-of-bitcoins-to-21-million-is-nonsense-5337252
https://bitcointalksearch.org/topic/why-did-satoshi-nakamoto-choose-21m-as-bitcoins-maximum-supply-5206704
https://bitcointalksearch.org/topic/why-is-the-bitcoin-limited-to-21-million-23624
https://bitcointalksearch.org/topic/how-will-bitcoin-survive-after-all-21m-coins-have-been-mined-5128657
All the above links are talking about the limited bitcoin. As for me, government cannot store btc in their treasury to suffer bitcoiners because the money most be use to do something either for developmental project or security issue etc