Post
Topic
Board Bitcoin Discussion
Merits 5 from 1 user
Re: I don't like the idea of governments holding millions of Bitcoins.
by
Satofan44
on 14/07/2025, 16:36:10 UTC
⭐ Merited by d5000 (5)
I'll try to dissect this in parts, thanks for the great reply.

(I also disagree a bit with your figures about a possible Bitcoin market cap if BTC is used as a widespread reserve currency. I think it would be more aligned with current gold's valuation, not 5-10 times higher. Gold is already a major reserve asset, and in addition has industrial and decorative use. I think a "gold flippening" -- BTC market cap > value of all gold in the world --- can happen but gold would then probably crash.)
Comparing Bitcoin to any metal including Gold when considering potential long term price and market capitalization is very wrong. Actually, it is most likely that Bitcoin will be much more valuable than Gold if it does become a reserve asset of a similar weight. This is primarily because the market dynamics behind them are entirely different. Gold's supply is not constrained by availability of gold, but by its price and only by its price! Every constants that you can think of will boil down to the price in the end if you think about it deeply. I'll give some examples for this argument. Firstly, we have no idea what the real amount of gold available underground is. Estimates come and go, but as technology improves we are more likely to discover more gold. Secondly, if the price of gold increases some smaller finds that are currently unprofitable will become profitable and they will be mined. Thirdly, generally with metals as the price increases more players try to compete to both discover and mine more. Everything from machines to logistics to survey is only constrained by the price of gold. I think this was also one of the arguments in favor of Bitcoin in the book Hard Money if I remember correctly. Bitcoin works completely different to this.

If Bitcoin price increases by a factor of 1000x today nothing would change. You can't mine more of it and you can't mine it faster (excluding the temporary faster than expected block mining time until the difficulty adjusts). If the price of gold were to increase by 1000x today, you'd probably see many companies attempt to mine gold in space using even today's crude and expensive technology. The increased supply will always act as a dampener for potential further price increase of gold. This does not factor in the problems caused by "paper gold", "fake gold" and so on of which are many. With Bitcoin nothing you do will create more supply. It is quite beautiful, isn't it?  Smiley While there is no way to provide a good estimate for the price of Bitcoin in such a scenario given its novelty and radical difference, contrary to what some pseudo academics claim, I think that we will be surprised if not shocked at the developments were it to become a real reserve asset for most or all countries.

Ethereum is a centralized protocol with centralized governance, the fork idea worked because Vitalik got involved and made it happen.
Vitalik indeed had incidence, and you're correct that Ethereum is more centralized than Bitcoin. However, for me that is only a gradual difference in this case. The power of someone to change the algorithm in a fork situation is higher if this person has also "social power" like in the case of Vitalik, but an entitiy without that influence with even more money could achieve the same result. The question is how much more money you'd need to equal that "social power".

In addition, we're witnessing already now that nation-states try to frame Bitcoin as an investment asset downplaying crucial features like censorship resistance and privacy. This means that the group listening to this framing and agreeing could have some social influence too.
In terms of using money to gain "social power" in Bitcoin, it is probably one of the worst trade deals that you can ever make. It is arguably the place where you can buy the least amount of influence for money. My analysis from observing various crypto channels is that there are 2 groups that are definitely growing in numbers, consistently and steadily. It is Bitcoin HODLers and Bitcoin maxis. Essentially with each cycle we have new individuals who have been red pilled, and those that have been hurt in various ways by the lies and greed of the altcoin world. I have never seen a case of a single maxi returning to fiat or abandoning key principles of Bitcoin under any normal conditions. With this I just want to say that while the majority of silent users may be individuals who don't care about these things, the number of "radicals" who would sacrifice everything for these features continues to grow too. They are very important.

In terms of your second part of this quote, it is correct but I do not worry about this. It is just a repeat of the Bitcoin scammer Roger Ver situation, just under different conditions and a different subject. It is essentially yet another test of who really has power in Bitcoin, and whether the principles and ideas that Bitcoin is built upon stand or not. If the people with money are able to control Bitcoin in this way especially people who have come late to Bitcoin, then Bitcoin deserve to die. It was a nice experiment that has failed. Who has real power is a very difficult question because there is no correct single answer, it is a balance of many different entities involved with different kinds of "power". I may not be silent here anymore, but I am sure that there are many other "radicals" like me who would fight such a thing to the end even if it means losing all the fake USD value of my Bitcoin.  Smiley

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.
The "national reserve" managers are also Bitcoin users. And if they own more Bitcoins than retailers, then they probably will have also more power. Take into account that big corporations' coins (Saylor and Cia.) will probably not fight for privacy. They will align with the likely winner.

Still, the "retailer's UASF" could win -- if, and only if, the retailers are overwhelmingly in the pro privacy camp. If they're divided (40:60 would not be enough, I think) then it becomes complicated.
I never meant to argue that any kind of serious attempt at such an attack of Bitcoin would be survived easily. I think it will be a complicated mess but that in the end the real users would win yet again. If they don't, as I said in the previous paragraph then Bitcoin has failed and it is good to move on.

I would normally be still optimistic. But what's a bit scary to me is that I'm seeing more and more posts which question privacy measures for Bitcoin, like CoinJoins. See this thread as a recent example. Of course, the thread didn't get any merits, and was fiercely criticised, but I see such posts much more often now than a couple of years ago when only trolls complained about "criminals using Bitcoin". And on platforms like X, where people like ZachXBT have actively criticised privacy-preserving crypto services, and where most retailers are, the "privacy doesn't matter" camp is probably much bigger.
While in a way it is worrying, I also see this as a natural involvement of the community in a negative way. You can use general discourse in this forum and other avenues of Bitcoin for comparison too. As more and more average Joe's get involved, the quality of discourse continues to worsen significantly. Further, social media incentivizes people to write about anything including things they don't know anything about. You can easily run a psyops to convince a fair amount of people that coinjoins are directly responsible for murdering many children and many people would buy it and advocate for a ban. Sadly, I am not even exaggerating  Undecided. That said, this should be seen as a mild and persistent concern to which pro active educational measures must always be employed. As long as maxis are never silent and encourage each other to continue to educate, there will always be an unpaid army that is working on this problem. In the long run, it would be wise to start a more organized and collective effort for this.

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.
I interpret that you mean that even the nation states would not risk losing the value of their reserves for that conflict and would thus not actively interfere in the fork debate. This depends largely how controversial a change is, and if a value loss has to be feared. If there's for example a 50:50 situation among "retail" users, then the chance for the pro-FATF camp to win the conflict without major losses are quite good, just because retailers are the least powerful users, unfortunately.
I think you underestimate the impact of market chaos, the beliefs of maxis and the value that they hold. In terms of market chaos, it is harder to have a join camp the more people and entities are involved. While you may want to risk this, many people may not. I mean Bitcoin maximalism is a very mixed group but for better or worse a fair percentage of maxis are individuals with cult-like beliefs. A 50:50 situation would cause the most damage. Everyone who is competing with Bitcoin in one way or another or hates it would be inclined to invest in media FUD to make it worse. Everyone from gold bugs to altcoiners, which is not something that is the case for a small and obscure asset with many doubting its realness anyway. Further, even Bitcoin maxis would be financially incentivized to FUD this situation as much as possible. As economically irrational as it sounds, there is an incentive to hurt their own net worth for the sake of long-term survival. We are trained for unrealized losses and patience, and in the scenario that we are talking about even -90% losses would be meaningless for very old maxis. We would be talking about a 90% reduction down to a price that is higher than today.  Cool

I know that in any case, I and all my contacts would sell without looking back if a pro-FATF camp comes even close to having a chance of winning. I assume you'd do the same.

My personal conclusion of this debate here until now is that it is possible that Bitcoin can repel a "FATF cartel attack", but for this, the users must be concientized about it's core values. If these values persist, then even big strategic reserves will perhaps not be that scary. But for the current landscape, where the censorship resistance aspect is downplayed and criticised not only by nation-states but also by some retail users groups, I'm not so optimistic.
We conclude the same. I mean not to argue that it would be easy. Perhaps I am just more optimistic that we will repel it and a bit more accepting that if we don't repel it that Bitcoin has run its course and that would be okay.