Topic: What if the US Govt. buys circulating Bitcoin Supply and $ is backed by $BTC ? (Read 296 times)

Something else (re)occurred to me [...]

So if they start using Bitcoin, they'll create their own internal accounting system, and there's nothing stopping them from turning it into fractional reserve Bitcoin.

People who put their money into some yield farming smart contracts need to convince themselves and others that they made a smart choice, so they keep telling everyone that DeFi the future. It's the same story as with ICO, people were telling that IPO and other funding methods are now obsolete and everyone will be launching an ICO. Fast forward, ICO is synonymous with "scam" today. I'm sure a similar fate awaits DeFi, with all the hacks and rugpulls that happen all the time.

Something else (re)occurred to me: let's say government wants to use Bitcoin, and let's say Central Banks get involved. What's stopping a large government to create 100 million Bitcoin in debt? They first abandoned the gold standard and then abandoned paper money. They don't even bother printing the banknotes anymore.
So if they start using Bitcoin, they'll create their own internal accounting system, and there's nothing stopping them from turning it into fractional reserve Bitcoin. No more on-chain settlements, no more physical ownership, it will just be like "paper gold". And in a way it's started already (by private corporations): "Wrapped Bitcoin" has nothing to do with Bitcoin, and yet people use it. It's not that hard to imagine they'll sell more Wrapped Bitcoin than the Bitcoin they hold, just like Tether sells more than the dollars they own.
The current government debts will never be paid back, and as long as they do the same with their 100 million "Bitcoin" debt, most people will just accept it.

Just like El Salvador, US could also try and capture the entire BTC circulating supply.

We never had "One Currency" through out the world.

The company of the richest person on earth has more than a billion in Bitcoin. Some people on Wall Street have accumulated Bitcoin.

The thing about Peer to Peer networks is that nobody can do anything to them.

Personally I think the USG actually allowed Bitcoin to grow for their own selfish reasons and the moment Bitcoin becomes a threat, they will put Bitcoin in its place.

My point is we could see major Govt. could rush in and buy as much BTC as possible if it becomes mainstream. Major institutions are already starting to use BTC as a hedge. Only a matter of times before the really Big Boys will step in. This way the US could actually control the Global Financial System.

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Deflation Creates Higher Rates of Unemployment
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Debt Increases Relative to Household Budgets
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Deflationary Periods Are Dangerous for the Economy
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I can't understand if you disagree with me

Hillary Clinton is alarmed by the rise of BTC.

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So, the US Govt. can easily print out $1 Trillion Dollars which is not really all that much when you compare it to gold and then capture the entire circulating supply and use it as a reserve.

Then they can pretty much make dollar reign in supreme again by backing $BTC to the dollar just like how they backed it to the gold standard in the past.

My point is we could see major Govt. could rush in and buy as much BTC as possible if it becomes mainstream. Major institutions are already starting to use BTC as a hedge. Only a matter of times before the really Big Boys will step in. This way the US could actually control the Global Financial System.

Why would anyone work for $8 per hour if someone else can just create ten billion times that amount by pressing a button?

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

And do you know what's the tricky part of fiat money? That what you said is an illusion in the short term.

Yes, in the long term you can't “print” value as the new money will enter the circulation and prices will rise due to supply & demand, but until they enter the market (which is the short term), they are regular, non-changed-in-value money. So, if they printed/added another billion dollars in their bank balance, they could accumulate more BTC which would obviously rise the price.

Do you know what's the beauty of fiat money printing? Value doesn't come from a printer (unless you're selling books), so no matter how much they print, the total value can't go up!

Hah! Yeah, every time someone talks about defi and finance detaching itself from traditional finance I just wonder which world they live in. Do people on defi forget newcomers still need a way to buy crypto to use defi, or that they also still need a link to traditional finance to realise their gains?

Never mind that the products and services of defi aren't even able to substitute traditional finance, let alone displace it... Defi people largely ignore the fact that those most in need of finance are less able to access defi services than traditional ones. Be it due to a lack of tools or even the technological infrastructure. Makes my eyes roll up every time someone says defi is for the people and the masses and the unbanked when clearly the only ones able to use defi are crypto able and those most benefiting are the wealthy.

As somebody very well said, it's a person who can't even get her e-mails right.

My point is we could see major Govt. could rush in and buy as much BTC as possible if it becomes mainstream.

Hillary Clinton is alarmed by the rise of BTC.

Crypto was looked upon as some kind of a weird speculative currency/asset in the past. BTC is getting more and more mainstream now.

With the rise of Defi's crypto is pretty much detaching itself from the Govt. and it looks like it cannot be stopped. If the govt knew about crypto and its implications years ago they could have stamped it out. Now, it is too late for them.

The US Govt has a right to be concerned because BTC is acquiring "trust" among the masses.

Just like El Salvador, US could also try and capture the entire BTC circulating supply. And, if the US Govt. doesn't then Kremlin or other countries might. We never had "One Currency" through out the world. In US $BTC = 1 Canadian $BTC = 1 Nigerian $BTC.

So, the US Govt. can easily print out $1 Trillion Dollars which is not really all that much when you compare it to gold and then capture the entire circulating supply and use it as a reserve.

Then they can pretty much make dollar reign in supreme again by backing $BTC to the dollar just like how they backed it to the gold standard in the past.

My point is we could see major Govt. could rush in and buy as much BTC as possible if it becomes mainstream. Major institutions are already starting to use BTC as a hedge. Only a matter of times before the really Big Boys will step in. This way the US could actually control the Global Financial System.

The idea of Russia buying Bitcoins is beyond my wild imagination.