I've just noticed this thread linked in another reply that I was reading. I think it is much better than most topics in this board, and as such I'd like to revive it and participate in it.
The people who voted that they should sell are ridiculous. Irrespective of whether Bitcoin can succeed as P2P cash, i.e., a medium of exchange, its strong feature is that it functions as a store of value. A store of value that still is volatile, but it is an emerging asset class without any resemblance to anything and is thus without precedents. We try to find all sorts of correlations to explain its market behavior precisely because nobody knows. The volatility is natural and is improving.
Why would you want the government to sell the new gold? Because you are afraid? Many posters are not old enough in the Bitcoin world to know that
people were afraid of all kinds of things at every point of Bitcoin's history, and not a single fear has really materialized. The game theory and social impact of Bitcoin is so deep and complex that it is impossible to fully grasp it at each possible level and at each interaction.
- The US buys 1-2 million BTC, other states/central banks like the ECB, China and India follow, and together they hold let's say 5-7 million (about 25%-35% of all existing Bitcoins).
The game theory behind such a scenario would indicate a Bitcoin price of many millions probably much more than $10M. Marketcap of $200+ trillion. They can't really secretly do this. If they start announcing their intention to acquire such massive amounts of Bitcoin, then anyone can front run them and they will have to pay up extra for this.
- Now the FATF sets up a new "recommendation" that a blacklist for "sanctioned" Bitcoin addresses (like those already implemented in Tether and other stablecoins) would be desirable.
Plausible.
- As almost all states obey the FATF's guidelines, together they pressure Bitcoin Core team to implement a blacklist for "sanctioned" Bitcoin addresses which miners have to obey, or alternatively build an own Bitcoin client with a modified protocol.
- This would of course need a hard fork. But they have a lot of coins, so they can increase pressure by threatening to sell all Bitcoins on the chain which does not follow the hard fork. This has a precedent: it's what Ethereum did when they pressured for the hard fork rewinding the TheDAO hack in 2016.
Ethereum is a centralized protocol with centralized governance, the fork idea worked because Vitalik got involved and made it happen. Apples and oranges. In terms of precedence in Bitcoin land, even when we were at our most divided, the UASF has shown that you can't win against Bitcoin's user. How much damage would a blacklist as proposed by FATF do, something that is so controversial and radically contrary to Bitcoin's nature? Who would risk a $200 trillion asset by considering this? The losses could be devastating to the point that they would make history, and that is the primary reason why I think that it stands no chance of happening.
Overall it should be remembered that time is always on Bitcoin's side. The longer it survives, the stronger it gets. To cross refer to the topic of quantum computers. If the USA owned 1 - 2 million BTC, does someone seriously believe that they would let anyone in the world break Bitcoin with quantum computers? They would stop it one way or another, whether it be with targeted "suicides" or even by starting a whole war. This is the game theory behind Bitcoin's economics. The bigger it gets, the more parties are interested in keeping it alive and the stronger are the financial interests for doing so. While there may be good interests for pushing forward such a FATF rule, those interest will be severely weakened if it is going to cause many trillions in market cap losses.