Quote from: Odusko on Today at 11:11:06 PM

Quote from: Fivestar4everMVP on Today at 07:00:19 PM

Quote from: d5000 on Today at 06:31:52 PM

Some Bitcoiners seem to be enthusiastic about plans by politicians to buy or hold big amounts of Bitcoin as part of a "strategic reserve". In particular, Kennedy's announcement that in the (extremely unlikely) case he wins the US election he could buy up to four million Bitcoins as a strategic reserve.

I don't like this idea for the following reason:

States holding such a big amount could interfere too much into Bitcoin's power equilibrium.

Let's see the following hypothetical scenario:

- 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).
- 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.
- 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.

A similar scenario was already discussed for ETFs. But ETFs would never hold so many coins as some are desiring for states/governments to hold, and also their customers could react, so for ETFs I don't see this danger. Up to 1 million, even 2 millions of BTC hold be states/governments/central banks would still not be something to be worried about. But if all bigger states try to buy millions, then it could become really dangerous.

I don't think Bitcoin would "die" in such a scenario, but I think it could lose a lot of value and confidence. And the scenario is not that unlikely to be ignored.

What do you think? I added a poll also with an intermediate scenario like the one announced by Trump, which would lead to a couple of hundred thousands of BTC hold by states, but not millions.

Well, you are seeing this from one angle and failing to see it from another angle, the dangers you talked about are there just as you have described it, but did you even bother a bit to ask yourself, what it will take to buy up to 2 million or more bitcoin from the open market? Even buying 50,000 bitcoin can drive the price of bitcoin up high to the roof, not to talk of buying up to 1 or 2 million bitcoins, buying up to this mentioned about of bitcoin, I can tell you will drive the price of bitcoin to nothing less than a million Dollar, now think about what will happen when one have to spend up to a million dollars just to own 1 bitcoin, and you need like 1 million bitcoins, and remember the more you buying, the more expensive it gets.

This is why I think it's not really all that easy for any individual or governments to own up to 2 million bitcoins without them emptying their reserve or treasury.

At this point we take every speech as poitical strategy and ways to gain bitcoinairs trust and support, because the real game will start when they eventually win the election, because buying such huge amount of bitcoin with tax payers money will raise alot controversies because this is public funds we are talking about, but if say it about individual buying, that can be understood, but spending such huge amount in buying bitcoin from the state coffers will not work, at least not as easy as he make it sound, take for example the case with El Salvador bitcoin adoption and holding, when the president spent some money in buying bitcoin as a reserve for the government, it citizens and section of the country kicked against, and that slowed down the rate at which the president could buy bitcoin for state reserved.
So for sure no matter what be the political candidates interest and motivation towards bitcoin when it comes to state own reserved in bitcoin, it will go through alot of regulations and debate before such huge amount of bitcoin buying can be approved and executed by the president, so the president does not have the unilateral right to make decisions as he seem fit not in volitile topics like bitcoin investment.

Speaking of tax money, Im curious how strong of a push for retirement funds and IRAs with BTC investment or people asking their brokers to buy up bitcoin for them to help turn a profit. I know that happens already, but that's going to be even a bigger impact if strong support for BTC arrives.

However I am also like OP where I do not 100% trust governments touching this tech. They have access to many ways to control our use of it (such as limited or cutting off the internet). We already saw goverments try to control things like gold with gold buybacks and clipping. But at least it was harder back then for them to confiscate. BTC is even harder, but it's not very difficult to obstruct its use or leverage.

mrmacintosh

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