undefined | Better HN

0 pointsmichaniskin4y ago0 comments

The point TFA is making is that the US government can force holders of bitcoin to sell their bitcoins to the government. And, importantly, they can do it via the Fed (which is nominally a private institution), thereby avoiding any politically messy legislation.

The Fed can do this by launching their own bitcoin exchange and then dominating the mining of blocks on the blockchain (AKA a 51% attack). They can then prevent any other miners from being able to mine blocks, and they can configure their own miners to only accept transactions which are depositing bitcoin into the own exchange's wallet.

At this point nobody can sell bitcoin to anyone other than the Fed's exchange, at any price, because the transaction will not be recorded in the blockchain. The Fed can now set the exchange rate to whatever they want, and they can pay for the bitcoin they exchange with whatever instrument they want. They can run the money printer to buy your bitcoin with USD, they can make you accept US treasuries at a certain price, whatever makes the most sense for their balance sheet. Your alternative is to HODL and never be able to sell your coins.

0 comments

mikeblackson4y ago

The network would be forked long before all of that could be setup. Millions of developers around the world working towards a goal generally move faster than governments.

michaniskinOP4y ago

The Fed is (nominally at least) a private institution. They are not hobbled by government bureaucracy. Just look at all the things they did in 2020 that everyone would have imagined would have been impossible. All they need is the green light to do it, and the Fed can swoop in ninja style and get stuff done, as they do. There is no oversight, there are no constraints.

mikeblackson4y ago

I have seen no evidence that central banks are as agile as you claim. Changing a number on a central database is not impressive and doesn't prove they can execute a much more technical attack on a well defended network.

Central banks are more fragile than the Bitcoin network and they definitely don't have the support of the masses. I expect they would lose a lot more than just money in this attack.

Bitcoiners would love to pull these institutions out of the shadows and I don't think central banks survive when exposed to sunlight. Just a small community of coders caught wind of how CBs operate and constructed powerful platforms to carry out large scale speculative attacks on them. Imagine what happens when a few billion people understand how CBs operate... their days are numbered.

1 more reply

j / k navigate · click thread line to collapse

0 pointsmichaniskin4y ago0 comments

0 comments

mikeblackson4y ago

The network would be forked long before all of that could be setup. Millions of developers around the world working towards a goal generally move faster than governments.

michaniskinOP4y ago

mikeblackson4y ago

Central banks are more fragile than the Bitcoin network and they definitely don't have the support of the masses. I expect they would lose a lot more than just money in this attack.

1 more reply

j / k navigate · click thread line to collapse