Replying to Avatar Contra

You’re describing exactly why circular Bitcoin economies matter. If your thesis depends on converting back to dollars, you’ve already conceded the game.

Chokepoint control of fiat on-ramps is only a problem if you need their permission to transact. They can regulate exchanges and add KYC friction, but they cannot stop peer-to-peer transactions or prevent you from accepting Bitcoin for goods and services directly.

Your argument assumes everyone needs to touch regulated rails. Bitcoin adoption accelerates precisely where state monetary control fails. The containment strategy works in stable jurisdictions until it doesn’t.

Saying “they can make it hard to interface with their system” is not the same as “they can stop Bitcoin from functioning as money.” One is friction, the other is control. If they could actually stop it, they would have already.

Circular economies aren’t cope, they’re the end game. Stop measuring success by how easily you can exit back to fiat.
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ภ๏รtг๏ภคยt 2mo ago

Bitcoin adoption accelerates where state control fails, and that's true in unstable jurisdictions, but we are discussing the US government. They operate under the principle of what they can't control, they must contain.

​Circular Economy is Niche Friction, Not Systemic Control. How many goods and services can a person actually acquire using a peer-to-peer Bitcoin transfer without interacting with a KYC'd business or eventually cashing out to pay for a house, a car, or taxes? Your "end game" is a niche system that only services a fraction of the economy.

​The government does not need to stop peer-to-peer transfers; they only need to pass regulation that makes the recipient of a peer-to-peer transfer a de facto Money Services Business, subjecting them to massive regulatory overhead, fines, and jail time for not having KYC/AML procedures. That threat alone stops the circular economy from becoming an actual parallel system.

​You call it friction; I call it a regulatory cost barrier. When the cost of using Bitcoin to pay for common goods exceeds the utility, you are forced back to fiat. It's a quiet, bloodless form of control that is absolutely scalable.

​Saying "they can't stop it" is not the same as saying "they can't neuter it." The government is not trying to kill Bitcoin! They are trying to contain its utility so that it remains a speculative asset rather than a functional currency that challenges the dollar's monetary global monopoly. You are praising the friction while ignoring that the friction itself is the government's containment strategy working perfectly.

Your "circular economy" is a fantasy the government can afford to ignore until it's large enough to matter, at which point friction, becomes control.

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Contra 2mo ago

You’re assuming US regulatory power is permanent and enforceable globally. It’s neither.

Bitcoin is 16 years old. Judging its ceiling by current adoption is like dismissing the internet in 1995. Every monetary system starts niche.

Your MSB threat assumes perfect enforcement. They can prosecute visible operators, but they cannot police millions of peer to peer transactions at scale. Enforcement costs matter, and they don’t scale.

Containment works until the thing being contained becomes more useful than the system containing it. When fiat breaks down through inflation or capital controls, your regulatory friction collapses. Zimbabwe, Venezuela, Argentina, Lebanon, and Turkey already prove this.

Bitcoin includes jurisdictional arbitrage. They can make it annoying in the US. They cannot make it annoying everywhere simultaneously forever. Friction creates pressure until something breaks, and history shows it’s usually the container, not the pressure.

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ภ๏รtг๏ภคยt 2mo ago

The problem, is that you’re celebrating the government's need to use a sledgehammer, while ignoring they are building a better cage.

​You bring up Venezuela. When a fiat currency completely collapses, of course the regulatory friction breaks down. That's the exception that proves the rule. The US Government's goal is to prevent the dollar from ever reaching that point, and they are using containment to do it.

​The ultimate game theory move isn't to kill Bitcoin...

You praise "jurisdictional arbitrage." The US government, with its control over global banking (SWIFT, USD clearing), doesn't need to regulate everywhere simultaneously. They only need to declare any non-KYC peer-to-peer operator who touches the dollar system an OFAC risk or MSB violator. That threat turns every major global financial institution into a containment agent for the US.

Your circular economy of goods and services is entirely reliant on the stability of the container—the country itself. People switch to Bitcoin in Turkey because the state has already failed to provide a stable environment. In the US, the state is actively working to ensure the utility of fiat for everyday life remains overwhelmingly greater than the 'friction' of the Bitcoin economy. You can't pay your mortgage, your corporate taxes, or buy industrial goods with Bitcoin without hitting a massive regulatory wall.

They are not going to make it "annoying everywhere." They are going to make it expensive to use as money and easy to hold as a monitored asset (via ETFs, regulated custodians, etc). You end up with a high-friction digital gold that funds a few niche black markets, while the state maintains its monetary monopoly.

​The US government is not like Venezuela or those other places, and it will contain its threat before the pressure of fiat failure forces a collapse.

You are betting the cage will rust before the animal dies of starvation inside. I'm telling you they just added a new lock.