Buying up or mining a significant amount the coins would not necessarily cripple the Bitcoin economy.
People would simply use what is left in circulation.
We sort of already have that situation now with lots of the coins from the original miners being forgotten or lost.
I doubt the central banks *want* a crippled economy, what they want is not to lose their position as your lord and master!
What do you think the point of this game is? It isn't to make everybody love bitcoin
You seem to be prescribing motives to players that don't really match their actions - Do you not think the Gold and Silver markets are manipulated to keep the price from running away and causing a panic into the "safe haven"?
I think the gold/silver markets are likely manipulated, for no less a nefarious reason than the money being made on derivatives based on the market far outweighs the cost of moving the price.
However, this does not necessarily lead to that, bitcoin is not metal. It is not subject to the same laws that govern its control. I am not aware of any actions that have been taken by the central banks with regard to bitcoin. The only motives I assign to the bank is the betterment of its own position in the game.
As for the point of the game - I think we have different games in mind. I have the broader goal of how the central banks might serve their own best interests through the mechanism of bitcoin, whereas you seem to be specifically focused on how best to discredit bitcoin, based on the assumption that this *is* the optimum strategy.
I don't agree with the premise that discrediting BTC is the best action for the banks to take. I think we even agreed that you can't *kill* it you can only mess with it. If it can't be killed, then maybe it can be controlled.
The more I think on the more the 'own the network' plan seems to make sense for the banks. I'd be glad to hear counter arguments to that, as it has me a little worried. I'm really hoping they are stubborn/stupid enough not to.
Central banks can't serve their purpose through Bitcoin because Bitcoin cannot be created at will to accomplish policy goals. If CBs were going to support Bitcoin, they'd already be supporting gold as it provides many of the same balances. The problem with gold is it's opaque - you have to store it, and it's very valuable so you don't want to let everybody see it. This provides a way to, even on a gold standard, produce currency in excess to what your "backing" would allow, because nobody checks how much you actually have and lacking that information it's pretty much impossible to determine how much currency should be out there.
Bitcoin doesn't allow that - If a currency were to be backed by it, the reserve address would probably be printed on the money so that anyone who wanted to check what their dollar was backed by could just look up the bitcoin address and see how many BTC there are relative to the amount of the paper currency in circulation.
So again, please re-examine what purpose central banks actually serve - If you think it's to "keep inflation low" I suggest you re-examine your analysis.
It is to finance government. The way you finance government when you don't want to tax as much as you want to spend is by devaluing the currency. Bitcoin would make that impossible, and in being such good money demonstrate to the world what bad money all alternatives are.
Wow, neither have I said that I think think that, nor do I think it.
I made it quite clear that my view on central banks, and to be clear I mean the IMF, ECB, Federal Reserve etc is to retain and/or increase the power they have over their subjects using money as the proxy.
It's all about power. What you are explaining to me is economic theory. A theory that it suits the central banks for you to believe. They want you to believe the choice is "Buy and Spend vs Austerity" because it suits them for you to believe that. It is a form of divide and conquer.
You need to stop thinking that the way things are is the only way things can be. If you keep arguing based on those assumptions then your whole argument collapses the moment your assumption is proven invalid.
When you say "Central Banks can't serve their purpose because..." and then define their purpose as that which they would have you believe it is, then of course you will only draw the conclusions that can inevitably come from a basic flawed assumption.
When you say "If CB's were going to support bitcoin they would be supporting gold..." you have i) misunderstood what I have been saying. They dont want to 'support' bitcoin, they want to control it.
The key difference is that you saying support bitcoin implies some benefit to you (and the other serfs) just as supporting gold implies some benefit to you (and other serfs).
Think carefully about the implications of them 'owning' the network - in particular the endgame scenario, once the block reward dries up. They ream the transaction fees, they have better control over the transactions (remember miners choose what goes in what block - hello censorship).
Right now, who is to say they arent the ones pushing the price up, buying all the loose coin. This not only gets the necessary mindshare by making it appealing, but it also lets them offload all those soon to be worthless dollars.
But what about all the millionaires they are creating?? I refer you to the 'worthless dollars' clause...
So think bigger dont think about bitcoin in the context of everything that went before, think about how it is different and how those differences can be (ab)used to the ends of those nefarious enough to want to controll all of the money in the world.
In some ways its easier. There is a fixed amount, so they always know exactly how much they have, they have a significant control over the block chain (who is to say they couldn't effect a meta-minimum fee, or your transaction nver gets included in 'their' blocks, voila taxation!)
You are underestimating the ways in which the ideas of good man can be twisted by those with evil motives.
