Topic: Will Bitcoin hasten the collapse of the US dollar? (Read 2925 times)

I've suggested this as well, better to use prison labor.  Also municipalities and gov's have free electricity and tech money (paid for by taxes and bonds and pension stealing) which will defeat common miners I guess.

China could do it even easier, since their employees cost nothing, and they are closer to Taiwan (chips)

What if they have a mining pool of some 1^16 terahashes per second?  Something outrageous?  I suppose once this happens, the blockchain will have correct data as to who and where is operating this 'killer mining force'?

Hmmm, another note here, since it seems that US Marshalls/Homesec/Treasury and local city cops/SWAT are going to eventually combine with the US military and arrest all county sheriffs and deputies in the US (at least the non-gun-grabbing sheriffs that is), maybe some counties will want to start paying their sheriffs and deputies in bitcoin?  Probably society will break down once the sheriffs feel pushed, and they might have to find other ways to be funded if the Treasury shuts down their payment avenues.

US could always start mining with some 'under the mountain' gear.

We also need to keep in mind that Bitcoin exchanges occur at an international level. So the USA makes it a black market currency, then they need every other country on board. Probably starting with Canada and the UK.

If a single country anywhere decided to adopt Bitcoin as their nations currency that means the USA would need to sanction that country to prevent legal trades from occuring. A sanction is an act of war and currently I can only think of 3 countries who they could do that to... Cuba, Iran and North Korea. In short that basically means Bitcoin needs some countries to sponsor it.

The USA can try all it wants to regulate purchases internally if it goes that far, but they can't shutdown international trade without collapsing themselves.

Point taken.

Anyway I'm not making predictions on how everything will play out because I don't know. It is going to be interesting though. My only point was that the two greatest powers of government are the power to tax and the power to counterfeit. Those in power are not going to see either of those undermined without a fight. Shut down the internet? Nope, I don't see that. There are other options though that I think will at least be tried. Will be interesting to see how the market responds. It is a struggle that is as old as mankind.

I would consider that a win for the powers that be if bitcoin were restricted to being a black market currency and private cash trade. It would mean the vast majority of the economy remains dominated by the currency they dictate and can control. Consider groceries, utility bills, mortgage payments, payroll, petrol, hospital bills, investments in stocks and bonds, etc all still largely being done in dollars while bitcoin is used for Craigslist transactions and buying weed over TOR. Yes, I'd call that a win for .gov if the goal is for bitcoin to supplant the dollar.

the dollar is fucking dead.

Of course there is alot of wishful thinking in the OP, as I said this is hypothetical only.


Here is something to consider though. The majority of Bitcoin transactions are currently to exchange illegal goods/services, most of which are totally untraceable because the websites are only available through the TOR network. A significant number of Bitcoin purchases are done through cash in person, and is actually still a very strong network.

The services which you are concerned the government may attack could only scratch the surface and likely remove the only investors who aren't participating in organized crime(Minus Counterfitting of course, lol). Drug dealers continue business as usual, but now you can't buy DVDs online with Bitcoins. I hope that isn't what qualifies as a win for the US government.

Everytime the government tries to suppress freedom it backfires. Decentralized websites already exist and perhaps that will be the future. They remain forever out of reach from authorities.

The final play the government could make would be shutting down the internet. How likely is that to happen?

The global economy would collapse along with the US dollar. China needs US consumers to buy what they are producing. China will keep on buying US treasury bills to make sure that the US can keep borrowing for the foreseeable future and make sure that China keeps growing.

What could be in the future and what is at the present time are not one and the same.

But then you gotta explain how you've come to this conclusion

I do not believe the US dollar will collapse any time soon.

-brutus

I'm not so sure..., The people could adopt it en masse and how is that not a threat? Just because there is a certain low total number of bitcoins to be 'minted' does not mean the economy of the world is not divisible by that number. Each bitcoin would just be worth a helluva lot and people would be buying houses and cars with fractional amounts of btc.

Gimpy I agree with you in principle but keep in mind that right now bitcoin is still a drop in the bucket that doesn't present any real threat to the current order. If that changes then it will be attacked. Most seem to be focused on network resiliency. But I don't see that as the attack point. What do you think would happen to the value of BTC if MtGox were to be shut down? And then go after every company within the system that accepts bitcoin? It's value would plummet. I don't see it being eliminated as a black market currency but gov could certainly go a long way toward driving it's use out of the on record business environment and into the black market. I won't make predictions as to how that would play out but I can tell you it wouldn't be as straight forward as the scenario in the OP.

Everytime the government places restrictions on us we work around it through innovation. The latest example being Bitcoin...

The government will intervene, however the government can only fight back as long as they have purchasing power. Even as we speak Bitcoin as slowly eating away at their power, and every dollar the Federal Reserve prints only sets them back further.

The Government isn't the threat though, it is the Banks. They are the trillionaires of the world and stand to lose most. The ones who choose to fight back against Bitcoin will be a great threat to us and you are right, however people are greedy so there will be the ones who try to invest in Bitcoin to hedge their losses. These investors have been and will be the ones that make Bitcoin successful.

The ones who are late to the party can spend all their trillions on Bitcoin and still only end up as middle class.

This is a war on the currency monopoly maintained by central banks. We've fought for freedoms in the past, and we need to do it again.

The problem with the OP is it assumes the gov will just stand by and watch this happen with no intervention.

The US was declared bankrupt in 1933 by President Roosevelt and are still paying off the debt

The dollar collapsed in 1971 when Nixon default on the gold standard and ended Bretton Woods.

All that happened is they created a new Dollar.

Are they teaching your kids foreign language in school (Spanish/French)?
Is there a free trade agreement (NAFTA)?
Are there designs for a new currency (Amero)?

All this stuff happened just before the Euro was created too.  

My question to these types of thought exercises is... when? Schiff said last year things would collapse the middle of this year. The bond market doesn't make sense. How much time do you think people have to make a move to something like Bitcoin, gold or silver?

Good OP though. Nice way to get out of noobie jail.

Good post OP.

I thought I would add this:  In the Jared Loughner shooting, imo, it was Judge John Roll who was the real target.  He adjudicated drug cases, and had ruled just days before on this one:


Here is the case: http://dockets.justia.com/docket/arizona/azdce/4:2010cv00703/568697/

So to expound on some of the very fine points in your post, indeed, the drug war can be said to be winning or losing, based on how much booty the agents of that war, collect.  Now, as to how bitcoin affects their end game of total US wealth confiscation, remains to be seen, but the very case they cite, FDR's gold grab, shows their intent.

And as you may know, in 2008, the only thing that kept the world economy afloat, was drug money.

So... Yeah.  In the end, confiscation is the final chess move that will alter the battlefield.  The Cyprus thing is that move, one could say that the US "wins this round" by having the EU (Germany and Rome) to have to make that first move, in the sense that each of the three blocs (US, UE and BRICs) is trying to force the other, to make their move first.  Like when a gunfighter says "draw"  ...Well, the EU has blinked first, and stole directly from one of their nations, and this will surely have results.  The only question is, at what time and place and under what code, will the US then make the same move.

I believe that any bank account in the US which has any bitcoin activity, places itself in the crosshairs for first-action for when the US decides to do the deposit "haircut" thing.  But Obama's handlers know that when they make this move, it will have serious consequences.  The body trail is growing behind this administration, and of course it relates to Bill and Hillary, who were drug runners out of Mena, AR and who have a huge body trail behind themselves as well.  So the top of the pyramid in the US is kinda showing their hand, but I doubt most Americans can see it.

One other point is that right before Obama won the nomination in 2008, it appears that Bill and Hillary tried to muscle him with (it is assumed) his legitimacy as to birth certificate and his history as a CIA asset.  This is evidenced from the fact that Democratic Party chairman Bill Gwatney was gunned down by a sleeper killer just a week or so before the nomination was given to Obama.  Gwatney was a long time friend of the Clintons, and so this was obviously a message from the Obama/Jarret/Ayres faction to the Whitewater/Mena faction that if they pushed Obama, more friends of the Clintons, would die.

So underneath all the day to day happenings, there is a subtle message of threats and death, which floats on the US trade of drugs.  The US is the largest consumer of drugs of course, and "freedom" demands that drugs remain available.  So the issues you raise, about drugs and bitcoin, are probably very true.  I am guessing that once Obama's handlers (Jarrett and Co.) make him drop the hammer and confiscate the bitcoin bank accounts and/or domains, shit will hit the fan quickly after that.

A further question would be, what banks are actually backing up sites like instawallet and blockchain?  They must have a bank behind them, don't they?  Or are these sites, which hold potentially millions of USD worth of BTC, are just databases, and have no banks behind them?  I think this subject is worth further discussion.