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At a certain point bitcoin becomes US currency (with zero yield…)

Maybe, not if the government can prevent it I think, money printing is just too useful, but I don't really care about yield, I'm interested in hard money that allows me to store value without having to go gamble on the stock market. And the question remains, what does the government do with a large pile of bitcoin? Create paper notes representing certain amounts of sats, swearing that it will pay them out to whoever presents the note at the treasury while building up debt in those new notes, decreasing their value, before outlawing private ownership of bitcoin in favour of their notes and then suspending payment in specie to foreign actors as well?

Every last one of those steps the US government has enacted with gold, the original offline bitcoin which was way easier to hide from the feds but people still played along. Oh and that final suspension of payment in specie I mentioned was the one in 1971, starting the miserable fiat era that makes us all poorer every day.

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Discussion

Ben Ewing 4mo ago 💬 1

Most of the hash pools are US domiciled. Executive order plus a few ICE raids and that hash power could be at the whim of the US Govt.

Then they could print bitcoin.

Tommy "The Purchase" 4mo ago 💬 1

If I'm not mistaken, controlling most miners would give them de facto control over which transactions would go through, right? They could modify the ones they control to check with Palantir whether or not a transaction is allowed. Then regular people would have to hope to catch a "free" node outside the US (and probably outside Europe or NATO as well).

Printing on the other hand, i.e. inflating the supply of bitcoin to more than 21*10⁶ would mean a hard fork and probably a substantial rewrite. But if almost all the nodes are centrally controlled, there probably wouldn't be much opposition and said fork would be adopted, leaving the non-western "free nodes" with the old code.

Might as well just launch a CDBC and plain outlaw bitcoin altogether.

Well, there's more than one way to slice it but either way, the people with the most guns win I suppose. Lovely.

Ben Ewing 4mo ago

Yeah I think you’re kinda right. I was more thinking about haspower capture, but node capture might also work. One option might be for the US to hard fork with their hashpower, and legislate that commercial miners, US pools and custodians/ exchanges only point hash/ transactions to their fork. These centralised entities would likely have to comply, but foreign ones probably wouldn’t. So there is a ‘US approved’ fork and a non-us approved fork. So then which would be the ‘real’ bitcoin, well that might depend on where the hashpower went. If the US was able to command that, I think it could arguably maintain a narrative that the US bitcoin is the ‘true’ bitcoin.