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The risk of domestication of #Bitcoin

"If you can't beat them, join them"

If Bitcoin becomes part of the U.S. Strategic Reserve, this will give the U.S. government very powerful leverage over Bitcoin's future.

I see several risky scenarios with this.

For example, the government or the Senate could decide that Bitcoin must integrate KYC natively for it to be used legally by the US state, US financial institutions, businesses and individuals.

They could pay developers to create a fork, and force all these American people and entities to use it.

The rest of the community will then have to choose:

- Stay with the original version of Bitcoin, which will NOT be used by the U.S. government, ETFs, #Microstrategy, etc.

- Or use the version that all these American entities will use.

The problem is that it's the version used by US entities that should have the highest price per Bitcoin, creating an incentive for all other users to use the new fork.

What's your opinion on this scenario and the risk it represents?

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Discussion

Ajax 1y ago

I guess I disagree that the market would price the KYC bitcoin higher than BTC classic. In my view the original promise of the protocol was P2P, ie to take out the middle man and return financial self-sovereignty to the individual. The more friction you add to that the lesser its utility, hence the lower its value.

You’ll also have difficulty forcing miners onto the new fork (mining capacity will just relocate outside of the US), while forcing nodes to run the forked core will be literally impossible.

Chuck Langstrumpf 1y ago

IMO they dont need a fork, they just need to outlaw non KYC transactions. Its a fully transparent ledger, so its easy to connect it with a KYC database and force the usage on all businesses, exchanges etc.

BTC is seriously fucked already, it lost its properties as P2P money, lightning is mostly used with custodial solutions, which is just Paypal on Bitcoin and invites mandatory KYC.

I recommend reading "Hijacking Bitcoin", it will give you a new perspective on what happened during the Blocksize wars.

I was a big believer in Bitcoin and recommended it to many people - not anymore. Now the only thing i recommend for freedom and sovereignty is Monero.

MAHDOOD 1y ago

This scenario is exactly what I expect to happen but I don’t think the free market will choose the KYC bitcoin. If this was actually a threat, then Bitcoin will never succeed. But you don’t have to agree with me. You can just hold the original Bitcoin and the KYC bitcoin after the fork then wait and see what happens with the price.

d0708145... 1y ago

There is an exact dictat for this, the fork, that is, in the Blackrock ETF approval. Beware🤷🏻‍♂️.