Replying to Avatar once_aphysicist

Maybe my comment below will give you a more interesting aspect to think about 🤔

I find the obsession to push for a govt held Bitcoin reserve quite dangerous. We are early on in adoption that if a prominent state like the US starts building a reserve, they can get a significant portion of the 21M coins.

The difference with other holders is, the state continues to be the only one with an exclusive license to use violence.

Since the general trend for larger private entities is to custody their coins with a third party, this puts a significant portion of the supply under a 6102 style confiscation risk. Existence of a significant reserve gives the state motivation to go through with it.

I would rather see Bitcoin remain black market money forever instead of price appreciation by losing the freedom money features.
Avatar
lifeisjustreplication 10mo ago

Isn't the executive order 6102 risk there, regardless of whether people self custody or use custodians?

As long as there isn't very widespread adoption, with a relevant fraction of voters/lobbyists (say > 15 %) holding Bitcoin (custodially/non custodially), then a state, seeking to get a sound basis for the coming monetary paradigm by building a reserve, will just issue a 6102 order or make holdings unviable by imposing an astronomical unrealised capital gains tax.

Many people will comply, unwilling to leave the country. At least that's what I'd expect to happen.

Reply to this note

Please Login to reply.

Discussion

Avatar
once_aphysicist 10mo ago

If you custody with a 3rd party, the state can focus their efforts on the custodians, and since the custodians are businesses, they would have documentation showing exactly how much they hold. Whereas individuals holding self-custodially is different, since unlike gold, Bitcoin is a digital asset, and much simpler to hide.

When it comes to using, the individual can always exchange P2P. Granted, in that case buying a house with Bitcoin would be difficult, but buying a used car or other services would be simple enough.